Skip to main content

SC verdict may stall Aadhaar linkage to stock trading

SC verdict may stall Aadhaar linkage to stock trading
Last week, exchanges issued a circular, asking brokers to furnish Aadhaar details of all clients

 The Supreme Court (SC) ruling the right to privacy as a fundamental right under the Constitution has triggered uncertainty over the mandatory linking of Aadhaar for stock trading. Brokers said they will now wait for the SC judgment that will test the validity of Aadhaar. 

“We will wait for the judgment on use of Aadhaar. Any relief would be welcome for stock market participants. We don’t have any issue with Aadhaar, however, linking all accounts is a difficult and costly task for brokers,” said Alok Churiwala, managing director (MD), Churiwala Securities.

Last week, stock exchanges issued a circular, asking brokers to furnish Aadhaar details of all existing clients by December 31. In the circular, exchanges said the failure to submit documents within the time limit could result in a ceasure of accounts.

The move had sparked panic among the brokering community, who feared disruption in business.A lot of market participants had approached the Securities and Exchange Board of India (Sebi) and stock exchanges, citing challenges in implementation of the Aadhaar circular.

“We hope the implementation gets stalled. Small brokers are severely impacted by the move. The cost of compliance per client works out to be very high. Also, no investor can open a trading account without a bank account. Aadhaar is anyway linked to bank accounts,” said a broker.

Brokers said the exchange circular is retrospective in nature, as it would require them to redo the know-your-client (KYC) process for all the existing clients as well.

“The December deadline will be slightly cumbersome, in terms of achieving 100 per cent compliance. We have told stock exchanges to give us a year to complete the full database. There are legacy clients. There are a lot of investors who are not active now, but were active in the past. We have asked for time for such accounts. Even if we give notice, they won’t respond,” said C J George, MD, Geojit Financial Services.

Brokers said there is also the implementation issued in cases where the names of clients are different on their Aadhaar and Permanent Account Number (PAN) cards.

According to the depository data, there are over 20 million individual investors with demat accounts used for stock trading. Experts say some investors trade with multiple PAN numbers, and linking of Aadhaar will help weed out such investors.

The Business Standard, New Delhi, 25th August 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit