To make it easier for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and foreign nationals to invest in Indian securities markets, the Securities and Exchange Board of India (SEBI) has relaxed the Know Your Customer (KYC) requirements, allowing eligible overseas individuals to complete the onboarding process digitally without being physically present in India.Under the revised framework, individuals residing in countries compliant with the Financial Action Task Force (FATF) can submit their KYC information and supporting documents digitally to SEBI-registered intermediaries from overseas. The earlier requirement that a client must be physically present in India during digital KYC had effectively restricted overseas investors from completing the process remotely.The decision is expected to ease access to Indian equity and securities markets for the large Indian diaspora and overseas investors, while reducing procedural hurdles and documentation requirements.SEBI’s revised framework follows representations from market participants seeking a simplification of the existing KYC process. The regulator has also sought to make KYC records more portable, enabling investors to avoid repeatedly undergoing the entire verification process when shifting between financial intermediaries.A key change is that KYC Registration Agencies (KRAs) will tag individual attributes in a client’s KYC record as “validated” if they have been verified against official or source databases.Importantly, all KYC records will be portable and can be shared with another intermediary, irrespective of whether every individual attribute has been validated.The regulator has also permitted intermediaries to rely on KYC undertaken by another SEBI-registered intermediary or an entity regulated by another financial sector regulator, based on records obtained from a KRA or the Central KYC Records Registry (CKYCRR).Story continues below this adThis is expected to reduce duplication of documentation and verification, particularly for investors maintaining accounts with multiple brokers, depositories and other market intermediaries.Under the revised provisions, intermediaries will first seek the investor’s Permanent Account Number (PAN) and Central KYC ID, if available, and retrieve the existing records from KRAs and the CKYCRR. Additional information will be sought only if the existing records are incomplete, outdated, inconsistent with regulatory requirements or require enhanced due diligence.For identity verification, intermediaries will have to collect a copy of the investor’s passport and, wherever applicable, the OCI card.Foreign nationals whose officially valid documents do not contain address details can submit documents issued by a government department in the foreign jurisdiction or a letter from a foreign embassy or mission in India as proof of address.Story continues below this adSEBI has also prescribed alternative mechanisms for verification where investors cannot physically produce original documents. These include equivalent electronic documents available through DigiLocker, verifiable electronic documents issued by the relevant authority, Aadhaar-based authentication through OTP, biometrics or face authentication, and copies attested by authorised certifying authorities.However, the relaxation does not mean that verification requirements have been diluted. The intermediary must continue to establish the identity and address of the client and understand the purpose and intended nature of the business relationship.The regulator has also tightened oversight of video-based verification. An authorised official of the intermediary must be present during Video In-Person Verification (VIPV), and the process will be subject to concurrent audit.The changes seek to strike a balance between easing the onboarding of overseas investors and maintaining safeguards against money laundering, impersonation and other financial crimes.Story continues below this adWith digital access, interoperable KYC records and reduced duplication of verification, SEBI’s move could make participation in Indian capital markets considerably less cumbersome for overseas individuals, while strengthening the framework for risk-based customer due diligence.