Sebi tweaks framework on Unique Client Code, PAN

Market regulator Sebi on Monday rationalised the compliance requirement of collecting and maintaining copies of PAN of clients by members of the exchanges having commodity derivatives segment and enhanced the use of e-PAN. In the Union budget 2020, launch of instant PAN facility was announced and subsequently, Income Tax (IT) Department launched the facility of e-PAN which is generated instantly through Aadhaar-based e-KYC.

In a circular, Sebi has tweaked provisions related to Unique Client Code (UCC) and mandatory requirement of Permanent Account Number (PAN). The regulator said it would be mandatory for the members of the exchanges, having commodity derivatives segment, to use UCC for all clients transacting on the commodity derivative segment.

The exchanges with commodity derivatives segment would not allow execution of trades without uploading of the UCC details by the members of the exchange. For this purpose, members need to collect after verifying the authenticity and maintain in their back office the copies of Permanent Account Number (PAN) issued by the Income Tax (IT) Department, for all their clients.

However, in case of e-PAN, members need to verify the authenticity of e-PAN with the details on the website of IT Department and maintain the soft copy of PAN in their records.