MASTER CIRCULAR FOR DEPOSITORIES
Summary
This section establishes the Permanent Account Number (PAN) as the sole identification number for all securities market transactions effective July 2, 2007. It mandates intermediaries to implement systems linking client databases to PAN details and maintain verified copies of PAN cards. The text further lists admissible documents for Proof of Identity, including Aadhaar, passports, and government-issued IDs. This section outlines acceptable documents for Proof of Address and validates e-KYC services from UIDAI for identity and address verification. It details the voluntary Aadhaar-based e-KYC process, specifying data requirements, authentication methods, and record-keeping obligations for intermediaries. Additionally, it introduces a simplified SARAL Account Opening Form for resident individuals with relaxed proof of address requirements. This section provides clarifications on KYC requirements for eligible Foreign Investors, including FIIs, Sub Accounts, and QFIs. It establishes a risk-based classification system for investors under the Portfolio Investment Scheme (PIS) route. The text details specific exemptions and alternative documentation procedures for various KYC forms throu
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Permanent Account Number (PAN) to be the sole identification number for all transactions in the securities market. 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.
Put necessary systems in place so that the databases of the clients and their transactions are linked to the PAN details of the client.
Build necessary infrastructure to enable accessibility and query based on PAN thereby enabling retrieval of all the details of the clients.
Collect copies of PAN cards issued to the existing as well as new clients by the Income Tax Department and maintain the same in their record after verifying with the original.
Cross-check the aforesaid details collected from their clients with the details on the website of the Income Tax Department.
List of documents admissible as Proof of Identity: Unique Identification Number (UID) (Aadhaar)/ Passport/ Voter ID card/ Driving license; PAN card with photograph; Identity card/document with applicant’s Photo issued by Central/State Government, Statutory/Regulatory Authorities, PSUs, Banks, etc.
List of documents admissible as Proof of Address includes Passport, Voter ID, Ration Card, Registered Lease/Sale Agreement, Driving License, Flat Maintenance bill, Insurance Copy, Utility bills (not more than 3 months old), Bank Account Statement/Passbook (not more than 3 months old), Self-declaration by High Court and Supreme Court judges, Proof of address issued by specified authorities, Identity card/document with address from specified entities, Power of Attorney for FII/sub-account, spouse's proof of address, Aadhaar Letter, and e-KYC service information.
DP shall ensure that all documents pertaining to proof of identity and proof of address are collected from all the account holders. Submission of the aforesaid documents is the minimum requirement for opening a BO Account. 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 to ensure the safety and integrity of the depository system.
SEBI has enabled Aadhaar based e-KYC service offered by UIDAI for KYC verification. Intermediaries who utilize the services of KYC Service Agencies (KSAs) would be registered as KYC User Agencies (KUA) with UIDAI on voluntary basis for accessing client identification and authentication details.
For entering into account based relationship, the client may provide the following information to the intermediary: Name, Aadhaar number, Permanent Account Number (PAN). The above information can be provided by the client electronically including through any web enabled device.
The intermediary shall perform verification of the client with UIDAI through biometric authentication (fingerprint or iris scanning). Mutual Funds can also perform verification of the client with UIDAI through One Time password (OTP) received on client’s mobile number or on e-mail address registered with UIDAI provided, the amount invested by the client does not exceed Rs. 50,000 per financial year per Mutual Fund and payment for the same is made through electronic transfer from the client’s bank account registered with that Mutual Fund.
PAN of such client is to be verified from the income tax website. After due validation of Aadhaar number provided by the client, the intermediary (acting as KUA) shall receive the KYC information about the client from UIDAI through KSA. The information downloaded from UIDAI shall be considered as sufficient information for the purpose of KYC verification. The intermediary shall upload this KYC information on the KRA system in terms of KRA Regulations.
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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.