On 11.02.2019 SEBI issued a circular giving relaxation to the non-residents from the requirement of furnishing a copy of PAN for transfer of equity shares of listed entities executed by non-residents.
As per Para (A)(1) of Schedule VII of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”), the transferee(s) as well as transferor(s) have to furnish a copy of their PAN card to the listed entity for registration of transfer of securities.
But due to this mandatory requirement, many non-residents such as Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs) and foreign nationals faced/are facing difficulties in transferring shares held by them since many of them do not possess PAN card.
So, in order to address the difficulties faced by such investors, SEBI decided to grant relaxation to non-residents (such as NRIs, PIOs, OCIs and foreign nationals) from the requirement to furnish PAN and permit them to transfer equity shares held by them in listed entities to their immediate relatives.
But this relaxation is given subject to the following conditions:
a. The relaxation shall only be available for transfers executed after January 01, 2016.
b. The relaxation shall only be available to non-commercial transactions, i.e. transfer by way of gift among immediate relatives.
c. The non-resident shall provide copy of an alternate valid document to ascertain identity as well as the non-resident status.
The term “immediate relative” have been given the same meaning as defined in Regulation 2(1)(l) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 i.e. immediate relative means any spouse of a person, and includes parent, brother, sister or child of such person or of the spouse.
If the above conditions are not fulfilled then, Non-Residents have to submit PAN while transferring equity shares of listed entities.