Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: VAT Audit :: cpt :: TDS :: articles on VAT and GST in India :: empanelment :: VAT RATES :: ACCOUNTING STANDARD :: list of goods taxed at 4% :: form 3cd :: ARTICLES ON INPUT TAX CREDIT IN VAT
News Headlines »
 CBDT releases Income Tax Return statistics for last two fiscals
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers

KYC norms force firms to re-check PAN details
March, 07th 2007

As a part of strengtheningthe Know Your Customer (KYC) norms, the permanent account number (PAN) has been made the sole identification number by the regulatory authority in all financial market transactions.

The intention behind this move was to do away with fraud and facilitate an audit trail in case of malpractices found in the system. But it seems that certain individuals with manipulative intentions in the stock market has been finding new ways to effectively execute their plans. This has already raised alarm bells among some domestic brokerage houses which are beginning to re-check all the details pertaining to the clients together with their documentary proofs.

It has come to the notice of some domestic brokerage houses that some of their clients had opened their trading and demat account showing PAN details as the proof of identity.

Once these clients got their accounts opened, they had applied for another PAN card with the income tax authority showing the address proof of some other place and were getting their former PAN cards cancelled. So naturally, all the transaction involved with that particular account would be under the cancelled PAN card.

With the KYC norms being made stringent by the market watchdog Securities and Exchange Board Of India (Sebi), the domestic brokerage houses are finding themselves in a hapless situation.

As inspection of all the accounts maintained by the Depository Participants (DPs) are being made stricter, and an imminent regulatory action on the cards for not adhering to the laid rules and regulations prescribed under KYC norms, these broking houses are feeling the heat now.

The fault lies with the brokerage houses themselves, says an official with a domestic brokerage.

In a booming capital market, to attract more clients and generate large revenues through brokerage fees, these firms had shown some laxity in checking the necessary documents and authenticity of the documents provided by their clients while opening the accounts then.

Sebi had already made it clear way back in August 2004, that many accounts still do not have the necessary details regarding the clients and the trading members should ensure their client details are updated at periodical intervals. Though late, Sebi is handing out stringent punishment for erring members.

Broking houses have issued deadlines to their clients to submit the necessary documents as proof and failure to do so will lead to suspension or freezing of their trading accounts, said an official with a domestic brokerage house.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Achievements

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions