SEBI’s Digital Leap: ‘e-KYC Setu’ Opens Fast Lane for Securities Market Onboarding

In a major move towards streamlining and digitizing the Know Your Client (KYC) process, the Securities and Exchange Board of India (SEBI) has permitted all securities market registered intermediaries the use of the National Payments Corporation of India's ('e-KYC Setu System') Aadhaar-based digital KYC verification. The notification, issued on June 30, 2025, provides another, alternative avenue to intermediaries, as an add-on to the already available e-KYC facilities by the Unique Identification Authority of India (UIDAI).

 

Key Highlights:

 

Other KYC Alternatives

Registered intermediaries can now opt to utilize NPCI's 'e-KYC Setu System' over UIDAI's e-KYC services for electronic client onboarding in the securities market.

 

Enhanced Ease of Doing Business:

The effort is designed to streamline and accelerate the KYC process, making it easier and faster for the investors and the intermediaries to undergo obligatory identity verification on the internet.

 

Privacy and Security:

The 'e-KYC Setu System' enables Aadhaar-based authentication without sharing the Aadhaar number with the reporting entity, thus enhancing data privacy and reducing the risk of operations.

 

Seamless Integration:

The system was developed by UIDAI and NPCI to facilitate digital onboarding of customers. The system offers end-to-end digital onboarding for entities on a single-window platform, thus streamlining operations and allowing flexibility to technology.

 

Regulatory Compliance

The new system is Aadhaar Act and SEBI compliant, meaning intermediaries are committed to all statutory requirements while taking advantage of the latest technology to authenticate clients. This project is set to further digitize and secure the capital market environment that will support the objective of the government in having a paperless and efficient financial industry. 

 

Source: The Economic Times, Rediff Money, Business Standard, Moneycontrol, Economic Times Legal