She's not some random girl, she's your friends sister, you need to clue him in.. Pull the "you're like a little sister to me" card if you have to.
I'm in love with my best friend's younger sister. I've known her since I've known my best friend and always been attracted to her but never done
If you're serious about wanting a relationship with her then: 1) Ask Kyle if he's cool with you dating his sister 2) Tell her you want a relationship with her