BSE Says Linking Demat Account With Aadhaar Is Mandatory Before 31st December 2017
Demat account holders cannot bypass Aadhaar now
The issue of Aadhaar linked stock market trading has been subject to debates and apprehensions since last few months. Earlier this month, we had reported that Aadhaar could be made compulsory for stock trading, even as traders assumed that this won’t be made a rule.
But they were wrong.
Aadhaar has officially invaded stock exchanges, and now, if you don’t have Aadhaar, then there won’t be any demat account. Some stock traders had earlier showed their apprehensions over this decision, as they were afraid that there will be a dip in business.
But now, such doubts don’t matter, because Aadhaar linked stock trading is the new reality.
Link Aadhaar With Demat A/c Or Get Terminated
Bombay Stock Exchange (BSE) issued a circular few days back, wherein they have ordered all demat account holders to link their accounts with Aadhaar on or before December 31, 2017.
In case any demat account is not linked with Aadhaar before that date, then those accounts would be suspended, till Aadhaar is linked.
In their notification, BSE said, “In case of failure to submit the documents within the aforesaid time limit, the account shall cease to be operational till the time Aadhaar number is submitted by the client.”
BSE has also referenced to Prevention of Money Laundering (Maintenance of Records) Rules, 2005, which was amended on June 1st, 2017 to make provision of Aadhaar as a form of eKYC for stock trading.
Their notification said, “Trading Members would be aware that Prevention of Money Laundering (Maintenance of Records) Rules, 2005 has been amended as per the gazette notification dated June 1, 2017 (copy enclosed as Annexure 1), inter alia, to provide for submission of Aadhaar number, where the client enters into an account based relationship with reporting entity.”
Demat A/c Holders Cannot Bypass Aadhaar Now
As per the notification, new demat account holders, who still hadn’t yet connected their Aadhaar with demat accounts, will get 6 months to do so.
While existing demat account holders, who had opened their account before the notification on June 1st, will have to connect their Aadhaar with demat account before December 31st.
Besides, BSE has included a new section called “PMLA Amendment – June 1, 2017” under their BSE Electronic Filing System (BESF), wherein traders can update BSE on their ‘preparedness and highlight issues’ pertaining to Aadhaar linkage, before August 23rd.
In the last few months, various trading houses had subtly introduced Aadhaar as another form of eKYC for stock trading. While some banks only allowed opening of new demat accounts with Aadhaar as eKYC.
But after this recent BSE notification, it is clear that you are required to furnish Aadhaar details for stock trading. Aadhaar has finally, and officially invaded stock market now.