SEBI on Monday rationalised the compliance norms of collecting and maintaining copies of PAN (permanent account number) of clients by members of the exchanges which have commodity derivatives segment.
In a circular on Monday, the Securities and Exchange Board of India (SEBI) amended provisions related to Unique Client Code (UCC) and mandatory requirement of Permanent Account Number (PAN).
The capital market regulator has also enhanced the use of e-PAN.
In the Union budget 2020, launch of instant PAN facility was announced and subsequently, Income Tax (IT) Department launched the facility of e-PAN which is generated instantly through Aadhaar based e-KYC.
Post the development, it will be mandatory for the members of the exchanges, having commodity derivatives segment, to use UCC for all clients transacting on the commodity derivative segment.
The exchanges having commodity derivatives segment shall “ensure that the members of their exchanges shall collect copies of PAN cards issued to their existing as well as new clients after verifying with the original.”
They would also have to cross-check the aforesaid details collected from their clients with the details on the website of the Income Tax (IT) Department.
However, in case of e-PAN, the authenticity of e-PAN will have to be verified with the details on the website of IT Department and maintain the soft copy of PAN in their records.
The provisions of this circular shall come into effect from April 1, 2021.