SEBI Circular No: CIR/MRD/DP/11/2010 (06-Apr-10) Master Circular for Depositaries
To,
All Depositories
Dear Sir / Madam,
Master Circular for Depositaries
Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the users to have an access to all the applicable circulars at one place, Master Circular for Depositories has been prepared.
This Master Circular is a compilation of the circulars issued by SEBI up to March 31, 2010 and shall come into force from the date of its issue.
Yours faithfully,
Harini Balaji
Deputy General Manager
022-26449372
harinib@sebi.gov.in
Securities and Exchange Board of India
Table of Contents
Section-1 - Beneficial Owner (BO) Accounts
1.1 Opening of BO Account by non-body corporates
1.1.1 Proof of Identity (PoI)
1.1.2 Proof of Address (PoA)
1.2 Exemptions from and clarifications relating to mandatory requirement of PAN
1.3 Fees/Charges to be paid by BO
1.4 Transfer of funds and securities from Clearing Member pool account to BO Account
1.5 Printing of Grievances Redressal Mechanism on Delivery Instruction Form Book
1.6 Exemption to Depository Participants (DPs) from providing hard copies of transaction statements to BOs
1.7 Safeguards on transfer of securities in dematerialized mode
Section-2 - Issuer related
2.1 Charges to be paid by Issuers
2.2 Activation of International Securities Identification Number (ISIN) in case of IPO
2.3 Registrar and Transfer Agents
2.4 Mandatory admission of debt instruments on both the Depositories
2.5 American Depository Receipts (ADRs)/Global Depository Receipts (GDRs)
2.6 Electronic Clearing System (ECS) facility
2.6.1 Dividend Distribution
2.6.2 Refund in public/rights issues
Section-3 -- Depositories/ Depository Participant (DP) Related
3.1 Designated e-mail ID for redressal of investor complaints
3.2 Approval of amendments to Bye Laws / Rules of Stock Exchanges and Depositories
3.3 Preservation of Records
3.4 Foreign investments in infrastructure companies in securities markets
3.5 Activity schedule for depositories for T+2 rolling Settlement
3.6 Settlement of transactions in case of holidays
3.7 Supervision of branches of depository participants
3.8 Designated e-mail ID for regulatory communication with SEBI
3.9 Disclosure of investor complaints and arbitration details on Depository website
SCHEDULE
Section 1: Beneficial Owner (BO) Accounts
1.1 Opening of BO Account by non body corporates
1.1.1 Proof of Identity (PoI)
1.1.1.1 With effect from July 02, 2007, PAN is the sole identification number for all transactions in the securities market, irrespective of the amount of transaction1. A copy of the PAN card with photograph may be accepted as Proof of Identity. In this regard, intermediaries shall:-
I. Put necessary systems in place so that the databases of the clients and their transactions are linked to the PAN details of the client.
II. Build necessary infrastructure to enable accessibility and query based on PAN thereby enabling retrieval of all the details of the clients.
III. Collect copies of PAN cards issued to the existing as well as new clients by the Income Tax Department and maintain the same in their record after verifying with the original.
IV. 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.jsp2.
1.1.1.2 For individuals falling under the category exempted from the mandatory requirement of PAN (Para 1.2), a copy of any one of the following may be accepted as Proof of Identity3
I. Passport
II. Voter ID Card
III. Driving license
IV. PAN card with photograph
V. Identity card/document with applicant''s Photo, issued by
a) Central/State Government and its Departments,
b) Statutory/Regulatory Authorities,
c) Public Sector Undertakings,
d) Scheduled Commercial Banks,
e) Public Financial Institutions,
f) Colleges affiliated to Universities,
Footnotes:-
1 Reference circular MRD/DoP/Cir-5/2007 dated April 27, 2007.
2 IT Department since changed the link for verification:
http://incometaxindiaefiling.gov.in/portal/knowpan.do
3 Reference Circular MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 and circular SMDRP/POLICY/Cir-36 /2000 dated August 4, 2000.
g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and
h) Credit cards/Debit cards issued by Banks
1.1.2 Proof of Address (PoA)4
A copy of any one of the following documents may be accepted as proof of address:
I. Ration Card
II. Passport
III. Voter ID Card
IV. Driving license
V. Bank Passbook
VI. Verified copies of
a) Electricity bills (not more than 2 months old),
b) Residence Telephone bills (not more than 2 months old) and
c) Lease and License agreement / Agreement for sale.
VII. Self-declaration by High Court and Supreme Court judges, giving the new address in respect of their own accounts.
VIII. Identity card/document with address, issued by
a) Central/State Government and its Departments,
b) Statutory/Regulatory Authorities,
c) Public Sector Undertakings,
d) Scheduled Commercial Banks,
e) Public Financial Institutions,
f) Colleges affiliated to universities; and
g) Professional Bodies such as ICAI, ICWAI, Bar Council etc., to their Members.
DP shall ensure that all documents pertaining to proof of identity and proof of address are collected from all the account holders.5 Submission of the aforesaid documents is the minimum requirement for opening a BO Account. DPs must verify the copy of the aforementioned documents with the original before accepting the same as valid. While opening a BO Account, DPs shall exercise due diligence6 while establishing the identity of the person to ensure the safety and integrity of the depository system.
1.2 Exemptions from and clarifications relating to mandatory requirement of PAN
Footnotes:-
4 Reference Circular MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 and circular SMDRP/POLICY/Cir-36 /2000 dated August 4, 2000.
5 Reference Circular MRD/DoP/Dep/Cir-09/06 dated July 20, 2006
6 Reference point 5 of part II on ''Customer Due Diligence'' of master circular no. ISD/AML/CIR-1/2008 dated December 19, 2008.
1.2.1 Central and State Government and officials appointed by Courts7
PAN card may not be insisted upon in case of transactions undertaken on behalf of Central Government and/or State Government and where transactions are conducted by officials appointed by Courts e.g. Official liquidator, Court receiver etc.8
However DPs, before implementing the above exemption, shall verify the veracity of the claim of the organizations by collecting sufficient documentary evidence in support of their claim for such an exemption.
1.2.2 Investors in Sikkim9
Investors residing in the state of Sikkim are exempted from the mandatory requirement of furnishing PAN card details for their demat accounts.10 DPs shall verify the veracity of the claim of the investors that they are residents of Sikkim, by collecting sufficient documentary evidence in support of their address.11
1.2.3 UN entities and multilateral agencies exempt from paying taxes/ filling tax returns in India12
UN entities/ multilateral agencies exempt from paying taxes/filing tax returns in India are also exempt from the mandatory requirement of submitting their PAN card details, subject to the DPs collecting documentary evidence in support of such claims.
1.2.4 FIIs/Institutional Clients13
Custodians shall verify the PAN card details of institutional clients with the original PAN card and provide duly certified copies of such verified PAN details to the brokers. This requirement is applicable in respect of institutional clients, namely, FIIs, MFs, VCFs, FVCIs, Scheduled Commercial Banks, Multilateral and Bilateral Development Financial Institutions, State Industrial Development Corporations, Insurance Companies registered with IRDA and Public Financial Institution as defined under section 4A of the Companies Act, 1956.
1.2.5 HUF, Association of Persons (AoP), Partnership Firm, unregistered Trust, Registered Trust, Corporate Bodies, minors, etc.9
Footnotes:-
7 Reference Circular MRD/DoP/Cir-20/2008 dated June 30, 2008.
8 Reference Rule 114C (1)(c) of Income Tax Rules.
9 Reference Circular MRD/DoP/Dep/Cir-09/06 dated July 20, 2006.
10 Reference Hon''ble High Court of Sikkim judgment dated March 31, 2006.
11 Reference Circular MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.
12 Reference Circular MRD/DoP/Dep/Cir-09/06 dated July 20, 2006.
13 Reference Circular MRD/DoP/Dep/SE/Cir-13/06 dated September 26, 2006.
The BO account shall be in the name of natural persons, PAN card details of the respective HUF, AoP, Partnership Firm, Unregistered Trust, etc shall be obtained. The PAN number of Registered Trust, Corporate Bodies and minors shall be obtained when accounts are opened in their respective names.
1.2.6 Mismatch in PAN card details, difference in maiden name and current name of investors.9
DPs can collect the PAN card proof as submitted by the account holder subject to the DPs verifying the veracity of the claim of such investors by collecting sufficient documentary evidence in support of the identity of the investors.14
1.2.7 NRI/PIOs15
Citizens of India residing outside India, foreign citizens and other persons (like companies/ trusts/ firms) having no office of their own in India may obtain PAN card based on the copy of their passport as ID proof and a copy of passport/ bank account in the country of residence as address proof, based on the Directorate of Income Tax (Systems) guidelines.16
1.3 Fees/Charges to be paid by BO
1.3.1 Account opening, custody and credit of securities17 With effect from February 1, 2005
I. No investor shall pay any charge...
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