Skip to main content

Sebi Takes Stock of Aadhaar Linkage

Sebi Takes Stock of Aadhaar Linkage
Seeks feedback from exchanges on brokers' preparedness to get clients' IDs by December 31
The Securities and Exchange Board of India has set the ball rolling for making Aadhaar compulsory for stock trading. The markets regulator has asked exchanges for their feedback on brokers' preparedness to get their clients to submit the biometric IDs before December 31.
ET reported first on August 10 that Aadhaar would become mandatory for buying shares and mutual funds. The BSE, in a recent circular, asked brokers for their comments on the matter by August 23.It said existing clients will have to submit Aadhaar numbers to their brokers by December 31. New clients should do so within six months of opening demat account.
“In case of failure to submit the documents within the aforesaid time limit, the account shall cease to be operational till the time Aadhaar number is submitted by the client,“ the circular said.
The government and Sebi are making Aadhaar must as part of the Prevention of Money Laundering rules, which aim to curb illegitimate money . Sebi, in recent years, has cracked down on individuals and entities for using the stock exchange platform to convert illegal money into legal money . Currently , the income tax permanent account number (PAN) is considered the most important document for share transactions. But the government has realised that PAN, though unique for every individual for income tax assessment, may not be enough to plug money laundering through the stock market. Market participants said multiple PANs and fake demat accounts are being used to push illegal money into the stock market.
The government recently mandated that Aadhaar be linked to PAN, bank accounts and mobile phone numbers.
Brokers said they are gearing up for implementing Aadhaar but it would be a tedious task.
“It adds to additional cost for brokers but they have no choice but to comply with it,“ said Alok Churiwala, managing director at Churiwala Securities.“This is triplication of efforts as without demat, bank account and PAN, one cannot trade and these three are already mandated to be linked to Aadhaar.“
For large retail broking firms like Angel, it would be a logistical nightmare.
“The issue is that clients don't respond to SMSes, emails, etc. So, it takes a lot of effort to get this done,“ Angel Broking chief executive Vinay Agrawal said.“Customers have already linked Aadhaar with PAN and bank account but due to privacy or confidentiality issues these agencies don't share the details and we have to approach the customers. As brokers, we don't have a choice but the regulator has given us enough time.“
The Economic Times, New Delhi, 21st August 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…