The Securities and Exchange Board of India (SEBI) on Thursday issued a set of clarifications issued by the Central Board of Direct Taxes (CBDT) to address difficulties faced by foreign portfolio investors (FPIs) in obtaining Permanent Account Numbers (PAN) under the revised onboarding framework.
The move comes after delays in PAN issuance disrupted onboarding of new FPIs over the past month following changes to the common application form (CAF) and PAN application process.
The CAF serves as a single-window system for FPI registration, PAN allotment, and opening of bank and demat accounts.
As part of the revised framework introduced from April 1, new PAN forms notified by CBDT required additional disclosures, including details and documents relating to representative assessees (RA) or authorised representatives (AR), along with mandatory fields such as mobile numbers.
The changes had triggered operational hurdles for FPIs and intermediaries, with market participants flagging concerns over potential tax liability for custodians, banks and brokers acting on behalf of offshore funds. At least 20 newly registered FPIs were understood to be awaiting PAN allotment due to the bottleneck.
