Master Circular for Depositories
Summary
This section of the SEBI Master Circular establishes the requirements for opening Beneficial Owner accounts, specifically mandating Proof of Identity and Address. It outlines exemptions from the mandatory PAN requirement for specific entities such as government bodies, Sikkim residents, and UN agencies. The text further details verification procedures for institutional clients and lists eligible entity types subject to these regulations. This section mandates the collection of PAN details for various entity types and outlines procedures for handling name mismatches or NRI/PIO documentation. It prohibits specific charges for account opening, custody, credit of securities, closure, and inter-depository transfers while requiring Depository Participants to publish their tariff structures annually. Additionally, it establishes a one-day deadline for clearing members to transfer funds and securities from pool accounts to client BO accounts, imposing penalties for delays. This section outlines grievance redressal channels for investors regarding stock exchanges, company affairs, and RBI matters. It details exemptions for Depository Participants from providing hard copies of transaction st
Text
With effect from July 02, 2007, PAN is the sole identification number for all transactions in the securities market, irrespective of the amount of transaction. A copy of the PAN card with photograph may be accepted as Proof of Identity.
Intermediaries shall put necessary systems in place so that the databases of the clients and their transactions are linked to the PAN details of the client. They must build infrastructure to enable accessibility and query based on PAN and cross-check details with the Income Tax Department website.
For individuals falling under the category exempted from the mandatory requirement of PAN, a copy of any one of the following may be accepted as Proof of Identity: Passport, Voter ID Card, Driving license, PAN card with photograph, or identity cards issued by Government, Statutory Authorities, Banks, etc.
A copy of any one of the following documents may be accepted as proof of address: Ration Card, Passport, Voter ID Card, Driving license, Bank Passbook, verified utility bills, lease agreements, or self-declaration by High Court and Supreme Court judges.
DP shall ensure that all documents pertaining to proof of identity and proof of address are collected from all the account holders. DPs must verify the copy of the aforementioned documents with the original before accepting the same as valid. While opening a BO Account, DPs shall exercise due diligence while establishing the identity of the person.
PAN card may not be insisted upon in case of transactions undertaken on behalf of Central Government and/or State Government and where transactions are conducted by officials appointed by Courts e.g. Official liquidator, Court receiver etc.
However DPs, before implementing the above exemption, shall verify the veracity of the claim of the organizations by collecting sufficient documentary evidence in support of their claim for such an exemption.
Investors residing in the state of Sikkim are exempted from the mandatory requirement of furnishing PAN card details for their demat accounts.
DPs shall verify the veracity of the claim of the investors that they are residents of Sikkim, by collecting sufficient documentary evidence in support of their address.
UN entities/ multilateral agencies exempt from paying taxes/filing tax returns in India are also exempt from the mandatory requirement of submitting their PAN card details, subject to the DPs collecting documentary evidence in support of such claims.
Custodians shall verify the PAN card details of institutional clients with the original PAN card and provide duly certified copies of such verified PAN details to the brokers. This requirement is applicable in respect of institutional clients, namely, FIIs, MFs, VCFs, FVCIs, Scheduled Commercial Banks, etc.
The BO account shall be in the name of natural persons, PAN card details of the respective HUF, AoP, Partnership Firm, Unregistered Trust, etc shall be obtained. The PAN number of Registered Trust, Corporate Bodies and minors shall be obtained when accounts are opened in their respective names.
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Source: SecMarx — Master Circular for Depositories. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.