The Securities and Exchange Board of India on Friday said it was withdrawing the limited purpose beneficiary owner account/ trading account facility for non-resident Indians (NRIs) and persons of Indian origin (PIO) without a permanent account number (PAN).
This follows the Directorate of Income Tax issuing guidelines facilitating Indian citizens residing outside India, foreign citizens and other persons (like companies, trusts or firms) having no office of their own in India, to obtain PAN based on the copy of their passport as ID proof and copy of passport/copy of bank account in the country of residence as address proof.
The NRIs/PIOs, who have already opened such BO accounts/trading accounts without PAN, shall be required to comply with the mandatory requirement of PAN on or before December 31, 06, failing which such accounts shall be made inoperable by the depository/depository participant/broker, the Sebi circular said.
Following representations from NRIs and PIOs, who were unable to obtain a PAN card for some reason but were holding physical securities which they wanted to sell, the Sebi had in July allow them to open a limited purpose BO account without PAN, subject to certain conditions specified therein.
In the last week of September, the same was also extended for trading in cash market for such NRIs/PIOs. Sebi has asked the depositories and stock exchanges to make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately.