4th August 2006
Re: Mandatory requirement of Permanent Account
Number (PAN) for transactions in the cash market
Members are hereby informed that the SEBI has issued a circular no. MRD/DoP/SE/Cir-8/2006 dated July 13, 2006. This circular, which is self-explanatory, is reproduced below.
Quote
GENERAL MANAGER
Market Regulation
Department
E-mail: sundaresanvs@sebi.gov.in
MRD/DoP/SE/Cir-
8 /2006
July 13, 2006
The Executive Directors/Managing Directors/Administrators
of All Stock Exchanges
Dear Sir / Madam,
Sub: Mandatory requirement of Permanent Account Number (PAN) for
transactions in the cash market
1. As
you are aware, PAN has been made mandatory for transacting in the Futures and
Options market as well as for operating a Beneficiary Owner (BO) Account in the
Depository system.
2. In continuation of the
above and to further strengthen the Know Your Client (KYC) norms in the cash
market with a view to facilitate sound audit trail, it has been decided that PAN will be mandatory for all the
entities/persons who are desirous of transacting in the cash market with effect from October 1, 2006.
3. The stock exchanges are
advised to ensure that the members of their exchanges shall:-
3.1 Collect copies of PAN cards issued to their existing
as well as new clients by the Income Tax Department and maintain the same in
their record after verifying with the original.
3.2 Cross-check the aforesaid details collected from their
clients with the details on the website of the Income Tax Department i.e. http://
incometaxindiaefiling.gov.in/challan/enterpanforchallan.jsp.
3.3 Upload details of PAN so collected to the Exchanges
as part of unique client Code.
4. The stock exchanges shall
ensure that with effect from October 1, 2006 transactions in the cash market
are executed only in respect of clients whose PAN details have been collected and
uploaded to the exchange by the members.
5. The Stock Exchanges are advised to ;
5.1. make necessary amendments to
the relevant bye-laws, rules and regulations for the implementation of the
above decision immediately.
5.2. bring the provisions of this
circular to the notice of the member brokers/clearing members of the Exchange
and also to disseminate the same on the website.
5.3. communicate to SEBI, the status of
the implementation of the provisions of this circular in Section II, item no. 13
of the Monthly Development Report for the month of August, 2006.
6. This circular is being
issued in exercise of powers conferred under Section 11 (1) of the Securities
and Exchange Board of India Act, 1992, to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
market.
Yours faithfully,
V S SUNDARESAN
Members are advised to strictly comply with the above circular.
Secretary