In a major development, stock market regulator SEBI has allowed foreign nationals, NRIs and PIOs to easily transfer equity shares to immediate relatives without the need to provide Permanent Account Number or PAN. For the purpose, immediate relatives include spouse of the person, parents, child, brother or sister. Nonetheless, the relaxations on this ground are subject to fulfillment of some of the conditions, SEBI said in a circular.
"In order to address the difficulties faced by such investors, it has been 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...," the SEBI said in a circular.
For the registration of transfer of securities under Listing Obligation and Disclosure Requirements (LODR) provisions of the SEBI, both the transferor and transferee has to submit a copy of their PAN to the listed company.
"The relaxation shall only be available to non-commercial transactions, i.e. transfer by way of gift among immediate relatives," the circular also noted.
The relaxation would be applicable in case of transfers done after January 1, 2016.
However, an alternative valid document to prove one's identity and the non-resident status of the non-resident has to be furnished, the circular added.