In order to enhance Know Your Client norms, the Securities and Exchange Board of India has made Permanent Account Number (PAN) mandatory for opening demat accounts on or after April 1, 2006.

In respect of demat accounts opened before April 1, 2006, it is mandatory for the account holders to provide PAN to depositories by December 31, 2006. Where PAN is not provided, the demat account would be suspended for debit after December 31, 2006 till it is provided, government said in a statement.

Similarly, SEBI has made PAN mandatory for trading in cash segment of exchanges with effect from 1st January 2007. It was already mandatory for trades in the futures and options segment of exchanges.

It is, thus, clarified that the investors, who do not provide their PAN by December 31, 2006, will not be able to debit their demat accounts and trade on the stock exchanges from January 1, 2007.