NCCPL will provide centralized KYC services to the brokerage and mutual fund industry

In order to provide maximum facilitation to investors and to bring more transparency and accuracy to the KYC (Know Your Client) process, the SECP has taken the initiative of establishing a Centralized KYC Organization (CKO) and has designated the National Clearing Company of Pakistan Limited (NCCPL) to function as the CKO.

The CKO shall develop a centralized web-based system named KYC Information System and maintain separate and exclusive database for the storage of KYC information entered by the market intermediaries.

At present, all entities in the capital market are performing registration/account opening process for their clients separately, which leads to duplication of effort and waste of resources. At the same time investors desirous of opening accounts with different intermediaries for the purpose of trading/investing/dealing in the capital market have to repeatedly undergo the KYC process.

The CKO shall develop a centralized web-based system named KYC Information System and maintain separate and exclusive database for the storage of KYC information entered by the market intermediaries. All authorized intermediaries will be given access to it through a dedicated user ID and password. Afterwards an investor who fulfills the KYC requirements through an authorized market intermediary shall be able to open accounts with other intermediaries without repeating the process of submitting KYC documents and the CKO shall provide the relevant information on demand to other intermediaries.

In the first phase the NCCPL will provide centralized KYC services to the brokerage and mutual fund industry and in the second phase the same will be extended to the investors of commodity market and insurance sector.

The CKO concept was introduced in India in 2011, where it has gained widespread appreciation and support among investors and market intermediaries. The CKO’s launch in Pakistan will be another major step in investor facilitation and providing the local capital market with internationally recognized support infrastructure.

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