Master Circular for Depositories
Summary
This section of the SEBI Master Circular establishes the Permanent Account Number (PAN) as the sole identification number for all securities market transactions. It mandates intermediaries to implement systems linking client databases to PAN details and verify identity documents against official sources. The text outlines admissible Proof of Identity documents, including Aadhaar, passports, and government-issued IDs. This section outlines the acceptable documents for Proof of Address and mandates that Depository Participants collect these documents from all account holders. It permits the use of third-party addresses as correspondence addresses provided due diligence norms are fulfilled, excluding Portfolio Management Services clients. The text further details exemptions from the mandatory Permanent Account Number requirement for specific entities such as government bodies, Sikkim residents, and UN agencies. SEBI mandates a standardized 'Rights and Obligations' document to replace existing Beneficial Owner-Depository Participant agreements for simplifying demat account opening. The annexure outlines specific operational requirements, including KYC verification, confidentiality of c
Text
Permanent Account Number (PAN) to be 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 Address includes Passport, utility bills not more than 3 months old, bank statements, self-declaration by judges, and proof issued by banks or gazetted officers.
Aadhaar Letter issued by UIDAI shall be admissible as Proof of Address in addition to Proof of Identity.
e-KYC service launched by UIDAI shall also be accepted as a valid process for KYC verification. The information containing the relevant client details and photograph made available from UIDAI as a result of e-KYC process shall be treated as a valid proof of address.
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 no objection to a BO authorizing the capture of an address of a third party as a correspondence address, provided that the Depository Participant ensures that all prescribed „Know Your Client‟ norms are fulfilled for the third party also.
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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.