SEBI opens overseas digital KYC from 3 December, but sets a strict live-video control test

India's securities regulator has removed a geographical obstacle to digital account opening for some overseas individuals. Under a nine-page circular issued on 4 November, SEBI will from 3 December permit a broker or other registered intermediary to accept digital know-your-client submissions from qualifying Persons Resident Outside India (PROI), without requiring them to be physically in India during onboarding. Eligible individuals include non-resident Indians, Overseas Citizen of India cardholders and foreign nationals located in Financial Action Task Force-compliant countries. This is a change in the identity-verification process, not blanket permission for any overseas applicant to trade every Indian security.[1][2]

The distinction follows directly from the existing rule. SEBI says its 2023 KYC master circular required a client undergoing digital KYC to be in India, effectively limiting the remote route for people overseas. The new circular makes country of residence, not a temporary visit to India, the relevant condition for the relaxed process. For people living in FATF non-compliant countries, the previous process continues. Foreign nationals seeking Foreign Portfolio Investor registration also remain subject to the separate FPI framework.[1][2]

Digital does not mean unsupervised. If physical in-person verification is not feasible, the intermediary must conduct Video In Person Verification. A named authorised official has to be present, and the process must undergo concurrent audit. The circular calls for an uninterrupted, time-stamped video with live geolocation, a matching IP location, anti-VPN and anti-spoofing controls, encrypted transmission and face-liveness checks that do not exclude people with special needs. Client consent must be auditable, and the official's identity and the verification time recorded.[1][2]

What the operational details mean

A second change concerns the re-use of verified data. SEBI directs KYC Registration Agencies to tag individual customer attributes as validated when they have been checked against an official or source database. Records remain portable between intermediaries even where every attribute is not validated. An intermediary can retrieve existing records from a KRA or the Central KYC Records Registry and request additional data where documents have expired, information has changed, the retrieved record is incomplete or risk-based enhanced due diligence is necessary. Portability is therefore not an exemption from the receiving firm's ultimate responsibility for its own client checks.[1][2]

Operational details matter. Intermediaries are to verify PAN against the income-tax database, collect passports and applicable OCI documents, check overseas addresses and accept appropriate certified documents where original verification is unavailable. Documents must be in English, or translated into English and attested by a certifying authority. After completing a PROI client's KYC, the intermediary must transmit that information to a KRA within three working days. That timing is measured from completion of KYC, rather than from the first customer inquiry.[1][2]

The change can reduce the need for overseas customers to travel or use paper-based onboarding, but it imposes specific technology and evidence-retention obligations on brokers, KYC vendors and platform providers. A firm operating only a generic video-call identity check would need to establish that its systems also capture the location, anti-spoofing, liveness and audit evidence required by SEBI. As of 7 November the effective date remains in the future; the circular does not establish how many overseas accounts will be opened, how much new trading activity will follow or whether every intermediary's system is already ready.[1][2]

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