On November 4, 2026, India's SEBI issued circular HO/38/30/12(3)2026-MIRSD-POD2/I/25175/2026 on the Know Your Client process for an individual person resident outside India, and published it on the SEBI circular page. Paragraph 7 brings the circular into effect on December 3, 2026 for every individual PROI client except a client in a FATF non-compliant country.
Indian stock brokers, depository participants, SEBI-registered portfolio managers, KYC Registration Agencies, recognised stock exchanges and clearing corporations, and depositories that onboard individual NRI, OCI and foreign-national clients must, by December 3, 2026, rewrite the digital KYC process so an individual PROI client in a FATF-compliant country can submit KYC from abroad, run video in-person verification with the stated controls, and upload the record to the KRA within three working days of completion, or an intermediary that keeps the India-presence rule for digital KYC, or skips the new verification and KRA upload duties, is in breach of a circular issued under section 11(1) of the SEBI Act and remains exposed to SEBI supervisory action; the circular names no fine amount.
What does circular HO/38/30/12(3)2026 change in digital KYC?
Person resident outside India (PROI) means a person who is not resident in India, under section 2(w) of the Foreign Exchange Management Act, 1999. Paragraph 3 applies that term to a non-resident Indian, an Overseas Citizen of India cardholder, or a foreign national.
The KYC Master Circular of October 12, 2023 (SEBI/HO/MIRSD/SECFATF/P/CIR/2023/169) requires the client to be physically in India during digital KYC. Paragraph 4.1 drops that condition for an individual PROI client in a FATF-compliant country. A KRA marks an attribute "validated" only after an official-database check, and the record stays portable anyway (paragraph 4.2). Reliance on another SEBI intermediary's KRA record, or on an RBI, IRDAI, PFRDA or IFSCA record via CKYCRR, does not shift ultimate responsibility (paragraphs 5.6.1 to 5.6.3). An authorised official must attend VIPV, under concurrent audit (paragraph 4.4).
Who must apply the new PROI process, and who stays on the old one?
The circular is addressed to section 12 intermediaries, recognised exchanges, clearing corporations and depositories. A client in a FATF non-compliant country stays on the extant process (paragraphs 7 and 8.4). An individual foreign national registering as a foreign portfolio investor stays under Master Circular SEBI/HO/AFD/AFD-PoD-2/P/CIR/2024/70 of May 30, 2024 (paragraph 6). KYC finished before December 3, 2026 stays on the old provisions (paragraph 8.5). Obsidian tracks 7 regulatory texts (in force, amended or in preparation) for the Financial Services & Crypto-Assets industry in India, as of November 2026.
What must intermediaries have in place by December 3, 2026?
By December 3, 2026 the intermediary must run paragraph 5 for a new individual PROI client in a FATF-compliant country and for re-KYC of that client: identify the client, record the purpose of the relationship, collect PAN and any CKYC identifier, and pull the KRA and CKYCRR record.
PAN is checked on the Income Tax database without the original. The file holds a passport copy and, where it applies, the OCI card. A digital signature is repeated wet during VIPV and matched. The current address is an overseas officially valid document, and papers must be in English or translated and attested (paragraph 5.9). If the original is not produced, paragraph 5.5.6 allows an e-document, Aadhaar e-KYC, or attestation by a notary, a qualifying bank official, a court, or an Indian embassy or consulate.
VIPV under paragraph 5.5.8 must be live: tamper-proof GPS and time, a block on VPNs and proxies, an IP country of India or a FATF-compliant country matching the form, an authorised official present, and concurrent audit. The record goes to the KRA within three working days (paragraph 5.7).
What is the exposure if the India-presence rule stays in place?
Paragraph 9 issues the circular under section 11(1) of the SEBI Act, 1992. From December 3, 2026, keeping the India-presence rule for a PROI client in a FATF-compliant country, or skipping the VIPV controls or the three-working-day KRA upload, puts the intermediary outside the circular. No fine amount is stated. The exposure is SEBI supervisory action.
Paragraph 8 supersedes, where they conflict, the October 12, 2023 KYC Master Circular and circular CIR/MIRSD/16/2011 of August 22, 2011. Drop the India-presence rule and the December 10, 2025 geo-tagging relaxation for clients this circular covers. Leave the FATF non-compliant country process, KYC completed before December 3, 2026, and the May 30, 2024 FPI master circular as they stand. Continuous, per-jurisdiction monitoring on Obsidian surfaces a SEBI circular of this kind the moment it is published.
Before December 3, 2026, confirm the firm onboards individual NRI, OCI or foreign-national clients, limit the new path to FATF-compliant countries, rebuild VIPV to paragraph 5.5.8, and test the three-working-day KRA upload. Keep the extant file for every client the circular leaves on the old process.
