Following the strict directions from SEBI for compulsory PAN details for trading in stock market, CDSL and NSDL have frozen over 27.5 lakh demat accounts till date. Infact, every fourth demat account stands freezed.
This is inspite of extension of the deadline for submission of PAN and giving several reminders to account holders. Investing in stock market usually constitutes unaccounted money and results in opening of multiple demat accounts to get allocation of maximum shares in an IPO. This is the reason for account holders having difficulty in furnishing PAN details.
Freezing of demat account implies that the trading will be stopped till the submission of PAN card and regularization of account. It does not amount to confiscation of assets in demat account.
SEBI has made PAN number compulsory for trading in stock market since January 1, 2007 and recently PAN has been made the sole identity for financial transactions. Such steps by SEBI are welcome in view of the rising stock market frauds and will also help to discourage the mushrooming black economy.