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To ensure a stronger surveillance system for any wrongdoing in the marketplace, stock exchanges may soon be asked to maintain a database of permanent account number (PAN) of all promoters of the companies listed on their platforms.
A proposal for asking the stock exchanges to maintain a database of all promoter PANs for listed companies is currently under consideration of Securities and Exchange Board of India's integrated surveillance department (ISD), a senior official said.
This department undertakes surveillance meetings with stock exchanges, clearing corporations on a regular intervals for various policy initiatives and other market intermediaries are also involved whenever required.
Besides helping in implementation of enforcement action against promoters and other entities, the regulator feels, PAN can also be useful in ensuring a better surveillance mechanism and, therefore, a database of PANs of all promoters of listed companies can be of great help.
These transactions include tax payments, tax deducted at source / tax collected at source (TDS/TCS) credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on.
PAN, thus, acts as an identifier for the “person” with the tax department, while other authorities also make similar use of this.
While permanent account number was mainly introduced to facilitate linking of various documents, including payment of taxes, assessment, tax demand and tax arrears, among others, it is also used for detecting and combating tax evasion and widening of tax base.
Besides in dealings with the tax department, quoting PAN is mandatory in various financial transactions, including for all transactions in the securities markets.
