In a big relief to brokers, the Delhi High Court on Thursday exempted their kin or dependents with no dealings in the capital market from obtaining a unique identification number as required by the Securities and Exchange Board of India.
The Sebi-notified scheme, which aims at creating a central database of market participants, requires not just brokers but also their spouses, parents and children to provide biometric impressions of their left thumb, left index finger, right thumb and right index finger to National Securities Depository Ltd.
Thursday's ruling is a modification of the court's February 27 order asking the regulator not to take any coercive action against brokers for non-compliance of the provisions relating to furnishing of biometric finger impressions of their kin.
It also said Sebi might reconsider the feasibility of asking specified intermediaries to file an affidavit with complete particulars of all related persons.
The high court on Thursday asked the petitioner, the National Stock Exchange Members' Association, to present evidence of the hardship faced by brokers in meeting the Sebi stipulation before April 15. Sources in the association said a representation would be made to the regulator before March 31.
Sebi, in a circular dated January 1, 2004, had said specified entities would not be allowed to act as intermediaries if they did not acquire the unique identification number before March 31.
The list of entities required to obtain the number in the first phase included depositories, stock exchanges, members of the bourses, mutual funds, portfolio managers, underwriters, merchant bankers and custodians.
The regulator on Thursday said in Mumbai that market intermediaries could now make consolidated payment to obtain the unique identification number for their employees and dependents. Dependent minor children of natural persons would not be required to obtain the number, it added.
NSDL, which was entrusted with the task of allotting the unique identification numbers, had in turn appointed points of service catering to different regions.
The fee per applicant was Rs 300. As per the arrangement between NSDL and the points of service, the latter would pass on Rs 225 to NSDL while retaining Rs 75 per applicant for rendering the service.
In the second phase, the market regulator planned to extend the requirement to all shareholders.
Market sources said there were about 1,000 brokers across India who were concerned and unhappy about Sebi's stipulation requiring them to provide biometric finger impressions of their dependents with no dealings in the capital market.
Mapping investors
- Sebi chairman G N Bajpai launches scheme to create a central database of market participants on November 25, 2003.
- National Securities Depository Ltd appointed to create and maintain the database.
- Spouse, dependent children and parents required to obtain unique identification number.
- First phase to cover depositories, stock exchanges, brokers, registrars and transfer agents, mutual funds and portfolio managers, among others.
