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Demat accounts without PAN to go defunct
Friday, 30 July 2010, 02:45 Hrs
Mumbai: The Securities and Exchnage Board of India (Sebi) is going to ban demat accounts, which do not have permanent account numbers (PAN). Non-PAN demat accounts will become inoperative from August 16, said Sebi.
The market regulator had already 'suspended for debit' (selling of shares) the demat accounts for which PAN details have not been verified. From August 16, it plans to make them even 'suspended for credit' (buying of shares).
"It has come to our notice that despite follow up, investors are not furnishing the PAN details," Sebi said.
"In order to ensure better compliance with the Know Your Client (KYC) norms it has been decided that with effect from August 16, 2010 such PAN non-compliant demat accounts shall also be 'suspended for credit' other than the credits arising out of automatic corporate actions," Sebi said leaving room for certain benefits like bonus issues and stock splits.
However, the regulator clarified that other credits including credits from IPO/FPO/Rights issue, off-market transactions or any secondary market transactions will not be allowed into such accounts.
Source: PTI
The market regulator had already 'suspended for debit' (selling of shares) the demat accounts for which PAN details have not been verified. From August 16, it plans to make them even 'suspended for credit' (buying of shares).
"It has come to our notice that despite follow up, investors are not furnishing the PAN details," Sebi said.
"In order to ensure better compliance with the Know Your Client (KYC) norms it has been decided that with effect from August 16, 2010 such PAN non-compliant demat accounts shall also be 'suspended for credit' other than the credits arising out of automatic corporate actions," Sebi said leaving room for certain benefits like bonus issues and stock splits.
However, the regulator clarified that other credits including credits from IPO/FPO/Rights issue, off-market transactions or any secondary market transactions will not be allowed into such accounts.
Source: PTI
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