‘In person’ verification done by a DP to hold good for broker in certain cases

SEBI vide circular SEBI/MIRSD/Cir. No. 02/2010 dated January 18, 2010 has clarified that the ‘in person’ verification done for opening beneficial owner’s account by a Depository Participant (DP) will hold good for opening trading account by a stock broker and vice versa, if the stock broker and DP is the same entity or if one of them is the holding or subsidiary company of the other.

For example, if an applicant has already opened a demat account with ‘A Securities Ltd’ (wherein a proper ‘in person’ verification was conducted by ‘A Securities Ltd’ before the opening of the account), it can open a trading account for the applicant without doing a second ‘in person’ verification on him. A subsidiary or a holding company of ‘A Securities Ltd’ can also open a trading account for the same applicant without conducting a second ‘in person’ verification on him. It should also be noted that an ‘in person’ verification conducted for the opening of a trading account will also hold good for opening of a demat account in the above mentioned scenarios.

A copy of the circular is available here.