Guidelines in pursuance of amendment to SEBI KYC (Know Your client) Registration Agency (KRA) Regulations, 2011

Multi Commodity Exchange of India Limited (MCX), vide Circular No. MCX/S&I/406/2026 dated 14 July 2026, has announced an important update regarding guidelines pursuant to the amendment to the SEBI KYC (Know Your Client) Registration Agency (KRA) Regulations, 2011.

Key Details of the Update –
• MCX has informed members that clients whose KYC records remain "On Hold" with the KYC Registration Agencies (KRAs), for any reason (both Aadhaar-based and Non-Aadhaar Officially Valid Document (OVD) based KYC), will be subject to trading restrictions.

• Applicability: Applicable to all MCX members and clients whose KYC records uploaded to KRAs during the period 01 June 2026 to 30 June 2026 are not validated by the KRAs.

• Clients with KYC status marked as "On Hold" will not be permitted to trade on the Exchange and will not be allowed to square up their open positions until they comply with the KRA validation requirements.

• Existing open positions of such clients will continue only until the respective contract expiry and will naturally expire on the contract expiry date.

• The Exchange will provide members with the list of non-validated clients through their designated email IDs.

• PANs that subsequently become KRA compliant will be permitted to trade on a T+1 basis, based on information received by the Exchange from the KRA.

• Effective Date: The trading restrictions shall become effective from 27 July 2026.

• Key Changes: Introduces trading restrictions for clients whose KYC validation remains pending with KRAs for records uploaded during 01 June 2026 to 30 June 2026, while allowing trading to resume on T+1 after KRA compliance.

• Penalty/Consequence: Non-validated clients will not be permitted to trade or square up open positions until KRA validation is completed. Their existing positions will remain until contract expiry and will expire naturally.

Actions if Any –
• Ensure that clients whose KYC status remains "On Hold" with the KRA are not permitted to trade on the Exchange.
• Monitor open positions of such clients and take appropriate measures to ensure compliance with the Exchange requirements.
• Review the list of non-validated clients provided by the Exchange and facilitate KRA validation to restore trading eligibility.

Compliance Deadline –
• Trading restrictions for clients whose KYC remains unvalidated by KRAs (for KYC records uploaded between 01 June 2026 and 30 June 2026) shall be implemented with effect from 27 July 2026.