Know Your Client Deadline for creation of Demat and Trading Accounts (key) – compliance has been extended for another three months. Securities and Exchange Board of India (Self) has extended the deadline for making demat and trading accounts KYC-compliant from September 30, 2021 to December 31, 2021.

According to a circular issued by the National Securities Depository Limited (NSDL) dated September 28, 2021, “On the basis of representations received from the participants and as per discussions held with other MIIs and SEBI, it is necessary to extend the above time limit for existing accounts.” The decision has been taken for the next three months i.e. till December 31, 2021.”

The original deadline was July 31, 2021, which was extended to September 30, 2021 due to the COVID-19 pandemic. This is the second time the deadline has been extended.

Updating KYC Details

As per the circular issued by SEBI in April 2021, the depositories, i.e. NSDL and Central Depository Services Ltd., are required to ensure that the six important KYC features are updated in the existing demat, trading accounts.

A demat, trading account holder is required to update the following KYC features:

a name

b) address

c) pan

d) Valid mobile number

e) Valid email id

f) Income Limit

In addition, the above mentioned six KYC features are mandatory for new accounts opened on or after August 1, 2021.

If the deadline had not been extended and KYC features were not followed, the account would have become inactive. Also, a person will not be able to trade in the stock market. Even if a person bought shares of a particular company, these shares could not be transferred to his account unless the KYC features were updated and verified.

Many stockbrokers are sending communication to their clients to update the required KYC features to avoid deactivation of their accounts. Now with an extended deadline, account holders who have not updated their KYC details yet have an additional three months to protect their demat and trading accounts from becoming inactive.

demat account Holders should note that mobile number and email id have to be verified for KYC compliance. Until the mobile number and email id are verified, the demat account will remain under ‘Pending for Activation’. Stock brokers will not activate the demat account until the mobile number and email id are verified. This is done to ensure that timely communication is sent to the investor.