Aad­haar May Be­come the Gate­keeper to D Street Soon

Govt, Sebi plan­ning to link unique ID to fin mar­ket trans­ac­tions to curb mal­prac­tices

The Economic Times - - Front Page - Nis­hanth.Vasudevan @times­group.com

Mum­bai: Aad­haar may soon be­come manda­tory for buy­ing shares and mu­tual funds. The gov­ern- ment and the Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) are plan­ning to link Aad­haar to fi­nan­cial mar­ket trans­ac­tions to try and curb sharp prac­tices such as con­ver­sion of black money into white through the stock mar­ket.

Two peo­ple fa­mil­iar with the de­vel­op­ment said the gov­ern­ment has re­alised that the per­ma­nent ac­count num­ber (PAN) may not be enough to plug tax leaks.

Top Sebi of­fi­cials have in­for­mally sounded out se­lect mar­ket in­ter­me­di­aries about the pos­si­bil­ity of link­ing Aad­haar to fi­nan­cial cur­rently not manda­tory for fi­nan­cial mar­ket trans­ac­tions curb­ing fraud­u­lent stock mar­ket ac­tiv­i­ties

mar­ket trans­ac­tions, a top of­fi­cial with a fi­nan­cial ser­vices firm fa­mil­iar with the de­vel­op­ment said. “We have been told that mak­ing Aad­haar com­pul­sory is in the of- used for on­line KYC in mu­tual fund in­vest­ments of clar­ity whether Aad­haar Card will re­place PAN

fing,” the of­fi­cial said. The tim­ing of the move is still un­clear. It is also not clear whether Aad­haar will re­place PAN as the sole iden­ti­fi­ca­tion num­ber for fi­nan­cial mar­ket man­dated Aad­haar be linked to PAN, bank ac­counts and mo­bile phone num­bers trans­ac­tions. The gov­ern­ment re­cently man­dated that Aad­haar, launched in 2009 by the UPA gov­ern­ment, be linked to PAN, bank ac­counts and mo­bile phone num­bers. The dead­line for ex­ist­ing bank ac­count hold­ers to pro­vide their Aad­haar de­tails is De­cem­ber 31. The unique ID can be used for con­duct­ing the manda­tory knowyour-client (KYC) check for mu­tual fund trans­ac­tions on­line. In on­line KYC — known as e-KYC — done with Aad­haar, MF in­vestors do not need to go to fund houses to sub­mit their forms and get their sig­na­tures iden­ti­fied in per­son.

Some stock bro­kers have been ask­ing the reg­u­la­tor to get the gov­ern­ment to ex­tend e-KYC to their in­dus­try. Bro­kers said manda­tory Aad­haar could play a key role in weed­ing out some of the ills of the stock mar­ket. “Link­ing fi­nan­cial mar­ket trans­ac­tions to Aad­haar will be an im­por­tant step to make In­dia a cor­rup­tion­free coun­try,” said Nir­mal Jain, chair­man, IIFL Group.

Mar­ket par­tic­i­pants said that PAN, though unique for ev­ery in­di­vid­ual for in­cometax as­sess­ment, has not been suc­cess­ful in pre­vent­ing in­di­vid­u­als from us­ing the stock mar­ket for money laun­der­ing. Bro­kers say mul- tiple PANs and fake de­mat ac­counts are still be­ing used to push il­le­gal money into the stock mar­ket.

Jain said the gov­ern­ment should make Aad­haar the sin­gle iden­ti­fi­ca­tion doc­u­ment. “It is im­por­tant that the gov­ern­ment re­places PAN and other iden­ti­fi­ca­tion doc­u­ments with Aad­haar in fi­nan­cial mar­kets and all other ser­vices to make it con­ve­nient for peo­ple,” he added. “For some of the re­gional play­ers, the big­ger worry is how many clients will re­main once Aad­haar is made manda­tory. There will cer­tainly be a dip in ac­tiv­ity even in IPO mar­ket but that will be tem­po­rary,” said the CEO of a bro­ker­age who did not wish to be iden­ti­fied.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.