Unique Client Code (UCC) and Mandatory requirement of Permanent Account Number (PAN)
Summary
This circular consolidates and updates norms regarding the Unique Client Code (UCC) and mandatory Permanent Account Number (PAN) requirements for commodity derivatives exchanges. It mandates that members collect, verify, and upload PAN details to establish a UCC for all clients transacting on the exchange. The document outlines specific exemptions for certain entities, reporting timelines, penalties for non-compliance, and record-keeping obligations.
Text
Rules made by the erstwhile FMC or Central Government applicable to recognized associations under the FCRA continue in force for one year from September 29, 2015, or until notified by SEBI.
The circular is issued to consolidate and update norms related to UCC and Mandatory requirement of PAN previously prescribed by the erstwhile FMC.
It shall be mandatory for members to use UCC for all clients; exchanges shall not allow trade execution without uploading UCC details. Members must collect and verify copies of PAN issued by the Income Tax Department for all clients.
PAN is the sole identification number mandatory for all entities/persons transacting on commodity derivatives exchanges. Investors in Sikkim are exempted, subject to verification of residency. Central/State Governments and court-appointed officials are also exempt upon documentary evidence.
Exchanges shall ensure members collect verified PAN copies, cross-check with Income Tax Department website, upload PAN details as part of UCC, and retain document copies.
Members must furnish client particulars to exchanges, updated monthly, reaching the exchange within 7 working days of the following month.
Exchanges shall impose a penalty of 1% of the value of every trade carried out without uploading UCC details. Penalties go to Investor Protection Fund. Failure to upload client details within a month leads to suspension.
Commodity exchanges must maintain a database of client details submitted by members and preserve historical records for seven years.
Provisions come into immediate effect, superseding all earlier directives by the erstwhile FMC regarding UCC and PAN.
Circular issued under Section 11(1) of the Securities and Exchange Board of India Act 1992 to protect investor interests and regulate the securities market.
Exchanges are advised to amend bye-laws/rules, notify stock brokers, disseminate information on their website, and communicate implementation status to SEBI.
Source: SecMarx — Unique Client Code (UCC) and Mandatory requirement of Permanent Account Number (PAN). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.