Govt, Sebi working to make Aadhaar compulsory for buying shares, mutual funds, says report

Aadhaar may soon be made compulsory to buy shares and mutual funds, as the government and capital market regulator Sebi are planning to link your 12 digit unique-identity number to financial market transactions, said a  report in The Economic Times. Currently, permanent account number (PAN) is mandatory for stock market transactions, but the government now feels it is not enough to plug tax leaks. [caption id=“attachment_3867587” align=“alignleft” width=“380”]  Representational image. News18[/caption] The move is being planned to curb shady stock market transactions undertaken by many investors to convert their black money into white to avoid paying taxes to the government. There is no clarity about the timeline for making Aadhaar compulsory for financial market transactions or whether PAN will be scrapped altogether for stock market play, the ET report said. The unique ID can be used for conducting the mandatory know-your-client (KYC) check for mutual fund transactions online. In online KYC — known as e-KYC — done with Aadhaar, MF investors do not need to go to fund houses to submit their forms and get their signatures identified in person, the report said. “Linking financial market transactions to Aadhaar will be an important step to make India a corruption-free country,” Nirmal Jain, chairman, IIFL Group, has been quoted as saying in the report. The government recently made it mandatory to link Aadhaar card to PAN card. It is also compulsory to link Aadhaar bank accounts and mobile phone numbers. Even the bank account holders are required to provide Aadhaar details, and the deadline for doing it is 31 December. However some regional players fear that linking Aadhaar to financial market transactions may result in exodus of clients, not just from stock markets but also see a dip in IPO market as well.