No PAN is Required For Transfer of Shares by Non- Resident By CS Ravi Garg


Relaxation from the requirement to furnish a copy of PAN for transfer of equity shares of listed entities executed by non-residents

SEBI has issued Circular vide SEBI/HO/MIRSD/DOS3/CIR/P/2019/30, dated February 11, 2019, to allow non-residents to transfer of equity shares of listed entities to their immediate relatives without furnishing of PAN as per the requirement of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
 
Applicability of the Circular:

Aforesaid circular shall be applicable for Transfer of equity shares by: 
  1. Non- Resident Indians (NRIs), 
  2. Overseas Citizens of India (OCIs), 
  3. Persons of Indian Origin (PIOs) and 
  4. Foreign Nationals
Most Important:

Permission is granted only in respect of transfer equity shares held by  non-residents in listed entities to their immediate relatives subject to the following conditions:

  1. The relaxation shall only be available for transfers executed after January 01, 2016.
  2. The relaxation shall only be available to non-commercial transactions, i.e. transfer by way of gift among immediate relatives. 
  3. The non-resident shall provide a copy of an alternate valid document to ascertain identity as well as the non-resident status.
Immediate Relative

As per Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the term Immediate Relative means

Regulation 2(1)(l) 

any spouse of a person, and includes parent, brother, sister or child of such person or of the spouse;
  
Requirement of furnishing of PAN as per SEBI (LODR), Schedule VII
 
(1) For registration of transfer of securities, the transferee(s), as well as transferor(s), shall furnish a copy of their PAN card to the listed entity for registration of transfer of securities.
 
(2)  Provision Omitted by the SEBI (Listing Obligations and Disclosure Requirements) (Fourth Amendment) Regulations, 2018, w.e.f. 1.4.2019 (vide Notification dated 30.11.2018). Prior to omission, sub-clause (2) read as follows-
 For securities market transactions and/or for off-market or private transactions involving the transfer of shares in physical form, the transferee(s), as well as transferor(s), shall furnish a copy of PAN card to the listed entity for registration of such transfer of securities
 
(3) In cases where PAN card is not available i.e. in case of residents of Sikkim, the requirement of PAN Card may be substituted with Identity proof.
 
(4) In case of mismatch in PAN card details as well as the difference in maiden name and current name, in case of married women, of the holder(s) of securities, the listed entity may collect the PAN card as submitted by the transferee(s) or transferor(s) as the case may be:
 
Provided that this shall be subject to the listed entity verifying the veracity of the claim of such transferee(s) or transferor(s) by collecting sufficient documentary evidence in support of the identity of the transferee(s) or transferor(s).

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  • Very well written CS Ravi Garg, informative article.

    I have some query related to the same topic that what alternate valid document will be considered to ascertain the identity as well as the non-residential status proof ?

    13-02-2019 / 11:54:38 AM
    Reply