When SEBI announced in July that demat account holders must submit photocopies of their PAN cards to their depositories for transacting in the cash market, it sent investors into a tizzy. SEBI had warned that if the PAN copy was not submitted by September 30, accountholders would not be allowed to operate their demat accounts.
But it seems the watchdog had bitten off more than it could chew. Just three days before the deadline was to expire, SEBI extended the last date to December 31. The reason for this unexpected backtracking: there were practical difficulties in getting investors to submit their PAN card copies.
For one, many demat accounts are jointly held. Some investors have sought exemption for the joint account holders if they don’t have a PAN. Then there is the common problem of having a PAN but not the card. Many people have a PAN allotment letter but are yet to get a card. Some have no idea of the status of their application.
The PAN allotment process is in a complete disarray. Though the work has been outsourced to several agencies, including the NSDL and UTI Investor Services, thousands of applications are still pending. SEBI's fresh deadline gives investors a breathing space of three months. But it seems unlikely that the practical difficulties that prevented the submission of PAN copies would be ironed out by then.
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