SEC sends proposal to CB on changes in KYC digitisation
In an attempt to seamlessly discharge the stock market’s digitisation process, Sri Lanka’s capital market regulator has submitted a detailed proposal to the Central Bank (CB) for changes proposed to KYC (Know Your Customer) rules when opening share trading accounts online.
“We will respond to this within a month,” a CB official said in response to a query by the Business Times on Thursday.
The digitisation of the Colombo Stock Exchange (CSE) calls for electronic account opening and as it is the KYC guidelines require manual documentation, which is prohibitive to the process. The manual procedure is quite complex, time-consuming and requires significant manpower. “The bank already has KYC and CDD (Customer Due Diligence) in place when opening accounts. We proposed that the CSE relies on those account details of an investor’s bank account on KYC for CDS (Central Depository systems) account opening,” Viraj Dayaratne, Chairman SEC told the Business Times earlier.
On Tuesday, the CB signed agreements with three parties to develop a Blockchain Technology based shareable KYC for banks. Another CB official told the Business Times that the SEC can explore this technology as well.
Late last month, the SEC approved amendments to the stockbroker rules, CDS rules and public listing rules as part of the market digitalisation initiative to ensure electronic clearing and settlement at the CSE.
Initiated by a SEC – CSE joint committee, the rules will allow the stock market to transition from a paper-based to an electronic- based environment helping investors to open CDS accounts, start trading and make settlements online eliminating visits to stockbrokers.