Bhumesh Verma (International Corporate Lawyer | Author | Guest Faculty | New Delhi | India)
Securities & Exchange Board of India (“SEBI”) has granted relaxation to non-residents such as Non Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs) and foreign nationals from furnishing a copy of PAN card and allowed them to transfer equity shares held by them to their immediate relatives.
SEBI has issued a circular on 11 February, 2019 granting this relief subject to certain conditions (for transfers executed after January 1st, 2016 and, only for non-commercial transactions i.e transfer by way of gift among immediate relatives).
So far, to register the transfer of securities of a listed entity, the transferor and the transferee were to provide a copy of their Permanent Account Number (PAN) to such entity. This was mandated under the provisions of SEBI (Listing Obligation and Disclosure Requirements) Regulations.
This provision resulted in a lot of hardships for many non-residents including NRIs, OCIs, PIOs and foreign nationals as they did not have any income taxable in India and, thus, had no PAN.
Taking their problems into account, SEBI has now done away with the requirement of furnishing PAN in case of these persons and allowing them to transfer shares held by them in listed Indian entities to their immediate relatives. ‘Immediate relative’ for the purpose of the relaxation would mean a spouse, parent, brother, sister or child of the transferor.
To authenticate identity and the non-resident status, however, the non-resident transferor will have to provide copy of an alternate valid document.