PAN to serve as unique client code for investors

Permanent account number (PAN) is set to emerge as the unique client code for stock market investors, following the delay in reviving investors' registrations under Mapin or market participants and investors' unique identification number.

PAN, which has already become mandatory for all new demat and trading accounts with broking houses, would be used by regulators to track transactions done by investors on the exchanges, sources said.

For existing demat and trading account holders, PAN would become mandatory from January 1, 2007.

The National Stock Exchange (NSE) in a circular has asked its members to upload the PAN details collected from its clients to exchanges "as part of the unique client code" for investors. In a move to counter the existence of duplicate PAN cards, NSE has also asked the members to verify the PAN details with the information provided on the Income Tax website.

"PAN will serve as the unique client code of investors, at least till such time an alternative is suggested by the Sebi," an exchange official said.

Simply put, from January 1 2007, PAN card will be the only acceptable identity proof for stock market investors.

Currently, there is no common identification code for investors, who undertake stock market investments and hence tracking them was becoming a difficult task for the regulators, considering that many investors trade under different client codes through more than one brokerage houses.

Though a move was initiated by Securities and Exchange Board of India (Sebi) along with National Securities Depository Ltd to provide Mapin, which will also contain biometric identification details such as fingerprints of investors, in November 2003, the regulator suspended the Mapin registrations in July 2005, following the recommendations of an expert committee headed by Jagdish Capoor, former deputy governor of Reserve Bank of India (RBI).

Sources said making PAN as the unique identification number (UIN) was in line with Jagdish Capoor Committee's report, which said "there may not be a need for yet another additional card as investors are already having many cards such as voter's ID, ration card, passport, etc."