SEBI mandates inclusive digital KYC for PwDs; Here's all you need to know
The circular, issued recently by the market regulator, mandates that stockbrokers, mutual funds, portfolio managers and other SEBI-registered entities must update their digital infrastructure and customer support mechanisms to comply with accessibility standards.
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The Securities and Exchange Board of India (SEBI) has directed all market intermediaries to make their digital Know Your Customer (KYC) processes fully accessible to persons with disabilities (PwDs). This directive comes on the heels of an April 30 Supreme Court ruling that underscored the constitutional right to equal access to financial services for all citizens, including those with disabilities.
The circular, issued recently by the market regulator, mandates that stockbrokers, mutual funds, portfolio managers and other SEBI-registered entities must update their digital infrastructure and customer support mechanisms to comply with accessibility standards. SEBI has also revised its FAQs on account opening for PwDs, now available on its website, offering clear guidance on how these changes are to be implemented.
As per the circular, adults with disabilities who are of sound mind and legally eligible to contract can now independently open and operate financial accounts. For those who require guardianship due to legal or physical limitations, accounts may be opened in the guardian's name with a valid certificate.
KYC compliance remains mandatory, but SEBI has introduced several adaptive measures:
- Independent Account Ownership: Adults with disabilities who are of sound mind and legally eligible to contract can now open and manage financial accounts in their own name—reinforcing autonomy and inclusion.
- Support Through Guardianship: In cases where a person with disability is unable to sign or is legally required to have a guardian, accounts may be opened and operated by the guardian, provided a valid guardianship certificate is submitted.
- Mandatory KYC for All: Both the individual with disability and the guardian (if applicable) must fulfill all standard Know Your Customer (KYC) requirements, ensuring regulatory compliance remains intact.
- Accessible Digital KYC: All intermediaries must adhere to accessibility norms for digital KYC processes. Upon request, live assistance must be offered to make video-based verification smoother and more inclusive.
- Flexible ‘Liveliness’ Verification: Recognizing varied physical abilities, intermediaries can use alternate cues—such as nodding, facial expressions, on-screen OTP display, or showing documents in real-time—when standard blinking or eye movement checks aren't feasible.
- Thumb Impressions as E-signatures: Online KYC now accommodates thumb impressions, which can be scanned or digitally signed and uploaded, just like conventional signatures.
- Optional Capture of Disability Details: Intermediaries may record details such as the type and percentage of disability during the KYC process, supporting better service design—though this remains optional and privacy-compliant.
- Manual Review of KYC Rejections: If a KYC application is flagged due to accessibility-related issues, it must undergo a manual review by the intermediary’s Principal Officer to ensure fairness and prevent unjust exclusion.
SEBI has also clarified that intermediaries may retrieve KYC data from the Central KYC Registry with the client's consent—streamlining onboarding, especially for PwDs who may face additional documentation challenges.
