Centralized Know Your Customer “KYC” Innovative Centralized Know Your Customer “KYC” Know Your Customer Awareness Session for Securities Broker Connect Growth

Summary Background CKO & Customer Relationship Form (CRF) Benefits How CKO and CRF will facilitate Market Participants Process Flow of KYC information How KYC Information will be gathered Authorized Intermediaries Who can become Authorized Intermediary (AI) Phase wise Implementation Implementation of KYC in two phases

Background Centralized Know Your Customer (KYC) Organization Rules, 2017 promulgated by the Federal Government under the Securities Act, 2015 NCCPL to be licensed as a Centralized KYC Organization (CKO) under the Rules and frame its Regulations and specify KYC Form PSX and CDC to merge the Trading Account Opening Form and Sub-Account Opening Form into a Customer Relationship Form

Benefits KYC process of each customer shall be performed only once. E.g. customer of broker A would not need to fill the KYC Form with broker B. Updation of information would be required with only one broker. CKO shall independently verify information of customers. Trading Account Opening Form and Sub-Account Opening Form will be merged into a standardized and simplified Customer Relationship Form (CRF). KYC Form and CRF shall have no duplication. Requirement of bank verification deleted.

Process Flow of KYC Registration for New Client BCM-AI will register new client code in NCSS with their UIN an CDS Account as per the existing mechanism and submit on-line Application Form (AF) in KIS by next working day. After submission of AF electronically in KIS, AI will be required to submit hard copy of AF and Supporting Documents to NCCPL within 5 working days. NCCPL will initiate necessary verification processing and complete its verification process within 7 working days from the date of receipt of AF & documents. On Successful verification, NCCPL will approve KYC-AF, accordingly, UKN will automatically be generated in KIS. However, in case of any discrepancy, further 5 working days will be given to AI for removal of discrepancy. After issuance of UKN, NCCPL will obtain written confirmation from the client for the issuance of UKN within 7 working days from local individuals and within 15-working days from local/foreign corporate and foreigner individual. In case where KYC Requirements as mentioned above steps are not fulfilled in KIS, trading of such client shall be restricted to square-up open position and all pending trades/transactions of such Applicant will be settled in NCSS.

Process Flow of KYC Registration for Client Already Having UKN BCM-AI will register new client code in NCSS with their UIN an CDS Account as per the existing mechanism and required to generate UKN Tagging Request in KIS by next working day After submission of Tagging Request in KIS, AI will be required to submit authority letter duly signed by a client to NCCPL within 5 working days NCCPL will initiate necessary verification within 7 working days from the date of receipt of the authorization letter. On Successful verification, NCCPL will approve such tagging request and UKN will automatically be tagged with such AI in KIS. However, in case of any discrepancy, further 5 working days will be given to AI for removal of discrepancy. After issuance of UKN, NCCPL will obtain written confirmation from the client for the issuance of UKN within 7 working days from local individuals and within 15-working days from local/foreign corporate and foreigner individual. In case where KYC Requirements as mentioned above are not fulfilled in KIS, trading of such client shall be restricted to square-up open position and all pending trades/transactions of such Applicant will be settled in NCSS.

Process Flow of Change in KYC Information If a client desirous to update his KYC Information, such client will inform concerned AI to initiate changes electronically Hard copy of KYC Change Request Form, supporting documents and authorization of change(s) from client will also be provided physically by AI to NCCPL within 3 working days from the date of submission of electronic request In case of incomplete supporting documents, AI shall be required to remove such shortcomings within 3 working days CKO within 3 working days after receipt of complete documents, will send a confirmation letter to the Customer After issuance of UKN, NCCPL will obtain written confirmation from the client for the issuance of UKN within 7 working days from local individuals and within 15-working days from local/foreign corporate and foreigner individual.

Authorized Intermediaries “AIs” Following are the persons who will be eligible for registration as Authorized Intermediary (AI) with NCCPL: TREC Holders Non- Broker Clearing Members Custodian Clearing Members Non-Banking Finance Companies registered with SECP CDC (for investor account holders) and Any other entity approved by NCCPL Board

Phase wise Implementation of KYC TREC Holders CDC Asset Management Companies and their Funds Non-Broker Clearing Members Custodian Clearing Members Non-Banking Finance Companies Phase 1 Phase 2

Already Registered Customers Phase wise Implementation of KYC - New and Already Registered Customers For All New Customers Already Registered Customers Phase 1 Phase 2

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