Master Circular for Depositories

CIR/MRD/DP/6/2015 · 2015-05-07 · SEBI

Summary

This section of the SEBI Master Circular establishes 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 maintain verified copies of PAN cards. The text further lists specific documents admissible as Proof of Identity, including Aadhaar, passports, and government-issued IDs. This section outlines the admissible documents for Proof of Identity and Address, including e-KYC and Aadhaar. It details exemptions from mandatory PAN requirements for specific entities like government bodies, Sikkim residents, and UN agencies. Additionally, it mandates verification procedures for institutional clients and addresses name discrepancies. This section outlines the simplified demat account opening process and mandates a standardized 'Rights and Obligations' document between Beneficial Owners and Depository Participants. It details specific operational requirements including KYC procedures, confidentiality of data, fee structures, and segregation of securities. Furthermore, it establishes protocols for dematerialization, transfer of securities, statement i

Text

Permanent Account Number (PAN) to be the sole identification number for all transactions in the securities market

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 includes Unique Identification Number (UID) (Aadhaar)/ Passport/ Voter ID card/ Driving license, PAN card with photograph, and identity cards issued by Government bodies or banks

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 specified authorities or identity cards with address.

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.

DPs must 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 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 (DP) ensures that all prescribed ‘Know Your Client’ norms are fulfilled for the third party also. The DP shall obtain proof of identity and proof of address for the third party. The DP shall also ensure that customer due diligence norms as specified in Rule 9 of Prevention of Money Laundering Rules, 2005 are complied with in respect of the third party.

The demat accounts for which PAN details have not been verified are “suspended for debit” until the same is verified with the Depository Participant (DP). With effect from August 16, 2010 such PAN non-compliant demat accounts were also "suspended for credit" other than the credits arising out of automatic corporate actions.

Source: SecMarx — Master Circular for Depositories. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.