Mandatory In-Person Verification (IPV) for Demat Account Opening

It is mandatory for all Depository Participants (DPs) to carry out ‘In-Person Verification’ (IPV) of their clients. At the time of opening Demat accounts, the DP must establish the identity of the applicant(s) (including the guardian in the case of a minor account) by verifying the photograph(s) affixed in the KYC Application Form as well as the proof of identity document(s) with the person concerned. Additionally, in the case of joint accounts, IPV needs to be conducted for all account holders. DPs may use a ‘web camera’ for carrying out IPV for the opening of depository accounts, subject to compliance with other SEBI guidelines and circulars related to depository account opening, including document verification. 

Procedure for IPV During Account Opening

Upon submission of the KYC Application Form, account opening form, proof of identity and address documents, and PAN details by the applicant(s), the DP should follow the steps below:

I. Verify the identity of the applicant(s):

The DP must verify the identity of the applicant(s) as clarified above.

II. Record details after verification:

After due verification, the DP must ensure the following details are recorded on the KYC Application Form at the time of IPV:

1. Name of the person conducting IPV

2. Designation of the person conducting IPV

3. Name of the organization

4. Signature of the person conducting IPV

5. Date of IPV

III. Manner of recording IPV details:

The DP may affix a stamp, print the IPV details, or manually write the information on the KYC Application Form. If IPV is conducted using a web camera, the phrase “IPV through webcam” should also be mentioned.

IV. Placement of IPV details on the KYC Application Form:

DPs may record IPV details at any appropriate place on the KYC Application Form, ensuring other details remain legible. For non-individuals (e.g., unregistered trusts) where the depository account is opened in the name of an individual (e.g., trustee), the IPV details may be recorded in the annexure to the KYC Application Form where the details of the karta, trustee, etc., are mentioned, if deemed appropriate by the DP.

V. Restrictions on recording IPV details:

Recording IPV details on a separate sheet attached to the KYC Application Form or affixing stickers for this purpose is not permitted.

IPV by Other SEBI-Registered Intermediaries

IPV conducted by one SEBI-registered intermediary can be relied upon by another intermediary. For stockbrokers, their sub-brokers or Authorized Persons (appointed by the stockbroker with approval from the relevant Stock Exchanges as per SEBI Circular No. MIRSD/DR-1/Cir-16/09 dated November 06, 2009) can perform IPV.  

For Mutual Funds, Asset Management Companies (AMCs) and distributors complying with the certification process of the National Institute of Securities Market (NISM) or Association of Mutual Funds (AMFI), and who have undergone the ‘Know Your Distributor (KYD)’ process, can perform IPV. For applications received directly by mutual funds from clients (not through any distributor), mutual funds may rely on IPV performed by scheduled commercial banks.

Special Provisions for NRIs/Foreign Nationals

For NRIs or foreign nationals where IPV is not feasible, photocopies of KYC documents must be attested by entities such as a Notary Public, Court, Magistrate, Judge, Local Banker, or Indian Embassy/Consulate General in the client’s country of residence. The attestation must confirm that the copies have been verified with the originals.

Additional Requirements for Joint Accounts and Minor Accounts

For joint accounts, a separate KYC Application Form must be submitted for each holder (first, second, and third holders). In cases where the sole account holder is a minor, a separate KYC Application Form must be submitted for the guardian.

A Demat account can have a maximum of three holders. Proof of identity must be obtained for all account holders.