Digital KYC will be implemented in the capital market from tomorrow, investors will have to fill KYC once
Centralized digital KYC will be implemented in the capital market from 1st July i.e. Monday. CDS and Clearing Limited (CDSC) has started implementing centralized digital KYC in the capital market from tomorrow.
CDSC spokesperson Suresh Newpan said that centralized digital KYC will be convenient for investors. CDSC had already allowed its members to test the digital KYC system. After everyone has tested the system, it is going to be fully implemented from July.
After the implementation of centralized digital KYC, the hassle of having to submit KYC time and again after going to broker company, merchant banking and opening demat and broker accounts will end.
Currently, when opening demat account, broker account, there is a provision to go to the respective office and fill separate KYC forms. However, a centralized digital KYC system will remove this hassle.
Neupane says that centralized digital KYC will be of particular benefit to investors. “Now we have to go to different places and fill the KYC form again and again,” he said, “but this problem will disappear after the implementation of digital KYC.” By giving a digital KYC ID, they will be able to take all the services of the capital market.’
Once an investor joins Digital KYC, they will get a unique ID. Unique ID can be used when opening demat or broker account.
After that, they will not have to fill their three-book details repeatedly when opening a new demat account or broker account. It will be reached only by providing the unique ID.
In the first phase, digital KYC will be implemented when opening a new demat account or opening a broker account, he said. The previous KYC has also been kept digital.
If the investor who has already opened demat wants to go for digital KYC, he can contact the relevant service provider. After that, the respective service provider will update the customer’s KYC and give a unique KYC ID.
However, once you take the digital KYC service, you get a KYC ID. You can use that ID while availing services in the capital market. You don’t have to fill all the details, KYC ID is enough.
The service provider will have access to the digital KYC system. Customers who take digital KYC can enter their details directly in the system. Then the details will come to the server of CDSC.
Due to this, the service provider does not have to keep the KYC details in the system every time. It will be reached only by keeping the KYC ID.
Neupane informed that in the future, a system has been prepared so that investors can fill their KYC form online. After filling the KYC online, you will have to go to the relevant service provider once for verification.
He says that the plan is not to charge digital KYC from investors at the beginning. ‘Now we are discussing the modality of the fee,’ Neupane says, ‘In the beginning, we insist on not taking money from investors as much as possible. But a certain fee can be charged from the service provider.’
CDSC started working on KYC system from 2076. At that time, the Nepal Securities Board had issued a centralized electronic customer identification (KYC) directory.
But in the year 2077, guidelines were brought to operate the centralized electronic customer identification details (KYC) service.
He said that the system was ready after 3 years of minutes when the system was revised again after the provision that the system should be centralized in the board’s guidelines.
The centralized digital KYC system is made by Nepali vendors. The centralized digital KYC data is kept in the government data center GIDC.
Neupane said that the system has been prepared according to safety standards. We have prepared the system keeping cyber security in mind. We have taken space in the government data center for data storage,’ he said.
CDSC has kept a backup of the data at the Disaster Recovery Center in Hetauda as well as at its central office.
Currently, many organizations are raising the issue of digital KYC but have not created a system. Can the digital KYC system made by CDSC be used in areas other than the capital market? He says that it cannot be solved immediately.
The guidelines issued by Sebon only cover the stock market. Therefore, it cannot be used in other sectors now,’ he told ICT, ‘but if there is such a policy arrangement, this KYC can be used by other sectors as a digital KYC.’
Now, to get a SIM card, to open a bank account or to open a demat, you have to fill in your personal details everywhere. KYC is the same everywhere. Therefore, it will be easy if digital KYC system is implemented in other areas as well.
Until some time ago, my share created by CDSC had a problem that the system would go down when many users came at the same time. In recent times, such a problem has disappeared.
He claims that digital KYC system will not face such problems. Neupane continues, ‘We are working to provide continuous service. We have collected the experience of being down from my share. It has been stable recently. We have advanced the work to operate at the same level.’
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