Capital markets regulator Sebi on Wednesday issued directives for sub-KYC user agencies to provide Aadhaar authentication services to their clients for the purpose of know your customer (KYC).

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This comes after the government last week notified 155 entities as sub-KUAs (KYC user agencies) to use Aadhaar authentication services of the UIDAI (Unique Identification Authority of India).

In a circular, the Securities and Exchange Board of India (Sebi) said that these entities are required to enter into an agreement with a KUA and get themselves registered with UIDAI as sub-KUAs. The agreement in this regard will be as prescribed by the UIDAI.

Further, the sub-KUAs need to follow the process as may be prescribed by the UIDAI from time to time.

"The KUAs shall facilitate the onboarding of these entities as sub-KUAs to provide the services of Aadhaar authentication with respect to KYC," the regulator said.

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In May 2020, the regulator listed the entities that can undertake e-KYC Aadhaar authentication. Sebi registered intermediaries and mutual fund distributors, who want to undertake Aadhaar authentication services through KUAs, are required to enter into an agreement with KUA and get themselves registered with UIDAI as sub-KUAs.