Effective January 1, 2007, NRIs, persons of Indian origin and foreign investors will require PAN cards to invest in Indian markets following an order issued by SEBI. .
The SEBI move follows a circular issued by the Income-Tax Department enabling NRIs and others (including PIOs and foreign investors) to obtain PAN cards for investing in Indian capital markets. Consequently, SEBI has decided to withdraw the facility of opening a `Limited Purpose Beneficiary Owner Account' without PAN.
According to the SEBI order, investors will be able to apply for PAN cards based on their passports as proof of residence and identity (ID).
Investors failing to obtain PAN will not be allowed to trade by the depository, depository participant or broker, said the SEBI order.
The regulator has told the stock exchanges to make necessary amendments to the relevant by-laws, rules and regulations.
Service providers (UTI Investor Services Ltd and National Securities Depository Ltd) will charge applicants courier charges for PAN cards to be delivered abroad, in addition to an application fee of Rs 60 (excluding the service tax).
Details of services charges and delivery time shall be put on the website of the respective service providers, the SEBI order said.