Discussion Paper on Simplification and Uniformity in the process of weeding out/ rejection of applications in primary market transaction

SEBI has published on its website, a discussion paper containing proposals to simplify and to bring about uniformity in the process of weeding out/ rejection of applications in primary market transactions using PAN. The proposals contained in this paper are placed for public comments for a period of 15 days.

Earlier in 2007, SEBI has stipulated that applicants in public issue should disclose their PAN in the application form, irrespective of the amount for which application/bid is made, failing which the application would be rejected. But different practices were followed by market participants in this regard. Usually the Registrar to the issue carries on the process of identifying rejections, based on the grounds of rejection disclosed in the offer document. The basis of weeding out of multiple applications involves cross checking a number of fields by the Registrar, such as name of the applicant, age, PAN, address of the applicant, DP ID, Client ID, fathers/husband’s name and finally the signatures.

For the purpose of simplifying the weeding out process and to bring about uniformity across procedures adopted in rejection of applications in primary market transactions, the following proposals are being considered by SEBI for implementation:

• The Registrar shall validate PAN, DP ID and Client ID available in the application form with the said data available in the depositaries database. If these data do not match, such application shall be rejected and not be considered for allotment.


• Applications made in public, preferential issue and in Qualified Institutional Placements (QIP) without mentioning PAN or with invalid or incorrect PAN shall be rejected.
  
  A copy of the discussion paper is available here.