{"id":3371,"date":"2021-03-17T06:47:28","date_gmt":"2021-03-17T06:47:28","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=3371"},"modified":"2021-03-17T06:51:36","modified_gmt":"2021-03-17T06:51:36","slug":"sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/","title":{"rendered":"SEBI Amends Guidelines for Unique Client Code and Requirement of PAN"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Securities and Exchange Board of India, through a Circular No SEBI\/HO\/CDMRD\/DNP\/CIR\/P\/2021\/30, issued on 08.03.2020, has notified amendment in the guidelines for Unique Client Code and Requirement of PAN. The guidelines amended will come into force from 01.04.2021.<\/p>\n\n\n\n<p>Further, it shall be noted that the said amendments are made in the SEBI Circular SEBI\/HO\/CDMRD\/DMP\/CIR\/P\/2016\/87, issued on 16.09.2016.<\/p>\n\n\n\n<p>In this learning blog, we will cover the\nconcept of Unique Client Code, PAN (Permanent Account Number) and the amended\nguidelines for Unique Client Code and requirement of PAN.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ab248c812b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ab248c812b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Concept_of_Unique_Client_Code\" title=\"Concept of Unique Client Code\">Concept of Unique Client Code<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Concept_of_Permanent_Account_Number\" title=\"Concept of Permanent Account Number\">Concept of Permanent Account Number<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Requirements_for_Amending_Guidelines_for_Unique_Client_Code_and_requirement_of_PAN\" title=\"Requirements for Amending Guidelines for Unique Client\nCode and requirement of PAN\">Requirements for Amending Guidelines for Unique Client\nCode and requirement of PAN<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Amended_Guidelines_for_Unique_Client_Code_and_Requirement_of_PAN\" title=\"Amended Guidelines for Unique Client Code and Requirement\nof PAN\">Amended Guidelines for Unique Client Code and Requirement\nof PAN<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Clause_3_of_the_SEBI_Circular\" title=\"Clause 3 of the SEBI Circular\">Clause 3 of the SEBI Circular<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Clause_5_of_the_SEBI_Circular\" title=\"Clause 5 of the SEBI Circular\">Clause 5 of the SEBI Circular<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Directions_for_Exchanges_with_Commodity_Derivatives_Segment\" title=\"Directions for Exchanges with Commodity Derivatives Segment\">Directions for Exchanges with Commodity Derivatives Segment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/sebi-amends-guidelines-for-unique-client-code-and-requirement-of-pan\/#Official_SEBI_Circular_for_Amendment_of_Guidelines\" title=\"Official SEBI Circular for Amendment of Guidelines\">Official SEBI Circular for Amendment of Guidelines<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Unique_Client_Code\"><\/span>Concept of Unique Client Code<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term Unique Client Code means a\nmandatory requirement for brokers, wherein they need to use this code, which is\nlinked to the PAN (Permanent Account Number) of the respective client. The same\nwill work as an exclusive identification for the said client.<\/p>\n\n\n\n<p>Further, the main reason behind the enforcement of this facility was to simplify the process of maintaining clients\u2019 database and to strengthen the KYC (Know Your Client) norms.<\/p>\n\n\n\n<p><strong>Also, Read: <\/strong><mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/legal-entity-template-rolled-out-by-sebi\/\">Legal Entity Template Rolled Out by SEBI<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Permanent_Account_Number\"><\/span>Concept of Permanent Account Number<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>PAN is the abbreviated form of Permanent Account Number. It is a\nunique 10 digits alphanumeric identification number grantedto the taxpayers by\nthe IT (Income Tax) Department. Further, it shall be noted that all the\ndepartment records all the tax- related transactions and details of an\nindividual or taxpayer against his\/ her PAN. Therefore, the same allows the\ntaxpayer to get his\/ her tax concerning activities with the department.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Requirements_for_Amending_Guidelines_for_Unique_Client_Code_and_requirement_of_PAN\"><\/span>Requirements for Amending Guidelines for Unique Client\nCode and requirement of PAN<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The SEBI had passed circular no.\nSEBI\/HO\/CDMRD\/DMP\/CIR\/P\/2016\/87, issued on 16.09.2016, which, inter-alia,\nprescribed guidelines on the use of UCC (Unique Client Code) and the mandatory\nrequirement of PAN (Permanent Account Number). Further, the use refers to trading\non commodity derivative exchanges.<\/p>\n\n\n\n<p>Also, in the Union Budget 2020, our\nUnion Finance Minister, Ms Nirmala Sitharaman, had announced the launch of an\ninstant PAN facility, and consequently, the Income Tax Department has launched\nthe facility of e-PAN, which is generated directly through Aadhar based e-KYC.<\/p>\n\n\n\n<p>However, to streamline the compliance\nrequirement of maintaining and collecting the copies of clients PAN by their\nrespective members and to improve and boost the usage of e-PAN, SEBI has\ndecided to modify some of the provisions of the SEBI Circular issued on\n16.09.20216. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Amended_Guidelines_for_Unique_Client_Code_and_Requirement_of_PAN\"><\/span>Amended Guidelines for Unique Client Code and Requirement\nof PAN<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The provisions amended in the Guidelines\nfor Unique Client Code and Requirement of PAN are as follows:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clause_3_of_the_SEBI_Circular\"><\/span>Clause 3 of the SEBI Circular<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It shall be significant to note that all\nthe members of the stock exchanges who have commodity derivatives segment need\nto use UCC (Unique Client Code) on a mandatory basis for all the clients who\nare dealing in the commodity derivatives segment.<\/p>\n\n\n\n<p>Further, the stock exchanges with the\ncommodity derivatives segment will not permit the execution of trades till the\ntime members do not furnish the Unique Client Code details. <\/p>\n\n\n\n<p>Also, for this purpose, the members of\nthe exchange will collect the copies of PAN (Permanent Account Number), issued\nby the Income Tax Department, for all the clients, after verifying the\nauthenticity and validity, and need to maintain the same in their back office as\nwell. <\/p>\n\n\n\n<p>However, in the case of e-PAN, members\nshall verify the authenticity of e-PAN with the details on the website of the IT\nDepartment and maintain the soft copy of PAN in their records.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Clause_5_of_the_SEBI_Circular\"><\/span>Clause 5 of the SEBI Circular<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>All the stock exchanges thathave\ncommodity derivatives segment need to ensure that the members of their\nexchanges will need to comply with the following:<\/p>\n\n\n\n<ul><li>Collect\nall the copies of PAN (Permanent Account Number) cards granted to their both\nexisting and new clients afterverifying and examining with the original;<\/li><li>Cross-check\nthe above mentioned details collected from the clients with thedetails and\ninformation available on the website of the Income Tax Department. However, it\nshall be noted that in the case of e-PAN, exchanges need to check the\nauthenticity and genuineness of the same with the information available on the\nofficial portal of Income Tax Department and require to maintain the soft copy\nof the same in the record;<\/li><li>Upload\nall the details collected concerning e-PAN or PAN as a part of UCC (Unique Client\nCode);<\/li><li>Verify\nand check the documents with respect to the UCC and retain a copy of the\ndocument;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Directions_for_Exchanges_with_Commodity_Derivatives_Segment\"><\/span>Directions for Exchanges with Commodity Derivatives Segment<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The directions issued for Exchanges with\nCommodity Derivatives Segment are as follows:<\/p>\n\n\n\n<ul><li>To make required amendments in the pertinent by laws, rules, and regulations;<\/li><li>To bring the provisions of this SEBI Circular to the notice or knowledge of the stock brokers or members of the Exchange;<\/li><li>To disseminate information on their website; <\/li><li>To communicate to SEBI (Securities and Exchange Board of India) the status of the execution of the provisions of this <a href=\"https:\/\/www.sebi.gov.in\/\">SEBI<\/a> Circular;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In\na nutshell, the Securities and Exchange Board of India (SEBI), by using its\npowers provided under section 11 (1) of the SEBI Act 1992, has issued a\ncircular on the amendment of Guidelines for Unique Client Code and requirement\nof PAN. The same was done to protect and defend the interests of investors in the\nsecurities market and to promote and encourage the development and regulationof\nthe securities market.<\/p>\n\n\n\n<p>Further,\nthe said amendment was made to the SEBI Circular SEBI\/ HO\/ CDMRD\/ DMP\/ CIR\/ P\/\n2016\/ 87, issued on 16.09.2016.<\/p>\n\n\n\n<p><strong>Also, Read: <\/strong><mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/sebi-annual-report-rules-2021\/\">SEBI (Annual Report) Rules 2021: A Complete Guide<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Official_SEBI_Circular_for_Amendment_of_Guidelines\"><\/span>Official SEBI Circular for Amendment of Guidelines<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<a href=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Official-SEBI-Circular-for-Amendment-of-Guidelines.pdf\" class=\"pdfemb-viewer\" style=\"\" data-width=\"max\" data-height=\"max\"  data-toolbar=\"bottom\" data-toolbar-fixed=\"off\">Official-SEBI-Circular-for-Amendment-of-Guidelines<br\/><\/a>\n<p class=\"wp-block-pdfemb-pdf-embedder-viewer\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities and Exchange Board of India, through a Circular No SEBI\/HO\/CDMRD\/DNP\/CIR\/P\/2021\/30, issued on 08.03.2020, has notified amendment in the guidelines for Unique Client Code and Requirement of PAN. The guidelines amended will come into force from 01.04.2021. Further, it shall be noted that the said amendments are made in the SEBI Circular SEBI\/HO\/CDMRD\/DMP\/CIR\/P\/2016\/87, issued [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":3374,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,64],"tags":[503],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3371"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=3371"}],"version-history":[{"count":7,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3371\/revisions"}],"predecessor-version":[{"id":3382,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/3371\/revisions\/3382"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/3374"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=3371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=3371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=3371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}