To tighten the KYC norms for opening a demat account, SEBI has now decided that PAN card must be obtained compulsorily as proof of identity for all categories of  demat accountholders including minor, trust , foreign corporate bodies banks, corporates FII's and NRI's .

This comes into effect in respect of all demat account that are opened on or after April 1, 2006 .

Further from October 1, 2006 onwards, the existing accountholders would not be able to operate the accounts if they do not produce the PAN Card by then .

Branch staff should personally verify the identity and address while opening demat accounts and the record of the person who carried out such verification should be available .

In case of joint accounts the PAN of each of the jointholders should be collected .

After verifying the details of PAN as mentioned above, staff of the branch should affix a stamp as "PAN VERIFIED" on the photocopy of PAN card(s) .

The PAN card details submitted by the applicant(s) should be verified with the name(s) appearing on the website of the Income Tax Department, i.e.

http://incometaxindiaefiling.gov.in/challan/enterpanforchallan.jsp

In case the name(s) do not match or the PAN card details are not present in the PAN card database, DPs should seek necessary clarification from the applicant(s) and activate the account only when the discrepancy is resolved.

In respect of account holders that are opened till March 31,2006 fails to submit the PAN details to the Depository Participant by October 1 2006 or there are discrepancies in the PAN details that are not resolved by September 30, 2006 such accounts should be SUSPENDED FOR DEBIT until PAN details are verified and updated .