PAN through Common Application Form

As per the notification from the Ministry of Finance on 7th February 2020, the Common Application Form (CAF) is launched for the purpose of allotment of PAN, the opening of Bank & Demat account and registration of Foreign Portfolio Investors (FPIs) with

Securities and Exchange Board of India (SEBI). With the latest technology applied to the compliance structure, the Common Application Form (CAF) become possible which will pave the way to ease out compliance system and enable the Foreign Portfolio Investors (FPI) to concentrate on starting the business. This article will explain the applicability and procedures to apply through CAF.

Applicability

The Ministry of Finance has decided to follow the CAF procedure for the Category-I & Category-II FPIs. The Category-I & II types are also known as "Low Risk" and "Moderate Risk" FPIs and CAF will be applicable only for the new Foreign Portfolio Investors. The Category-III FPIs are known as "High Risk" entities which are not advised to follow CAF mode as regulated by the finance ministry. The applicable industries fall into Category-I & II are provided below:

Category I - Government entities like banks belong to another country especially their Central banks, Sovereign wealth Funds, Multilateral Organizations, etc. which is also known as "Low Risk" category
Category II - Regulated entities such as banks, Pension Funds, Insurance Companies, Mutual Funds, Investment Trusts, Asset Management Companies, University-related endowments and are registered already with SEBI which is also known as "Moderate Risk" category

Procedures

The applicants who are in need of FPI registration has to follow the below procedure: Step-1: Fill Common Application Form (CAF) which will be self-explanatory (CAF will be attached to this article once it is available) Step-2: Fill ‘Annexure to CAF’ - which can be accessed below

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Step-3: Provide supporting documents along with applicable fees for SEBI registration and issuance of PAN. The KYC for banks will be handled based on the supporting documents submitted. Note: Designated Depository Participants (DDP) may continue to accept in-transit FPI registration applications, for a period of 60 days from date of issuance of this Circular.

Methodology

With the agreement between the Ministry of Finance and SEBI, the duly filled-in CAF will pass through in the below methodology:

Uploading CAF into the portal
Generating FPI registration certificate after a thorough examination
SEBI will forward the data and CAF in Form 49AA as prescribed by Income Tax authorities for issuing PAN card
Once, the details are validated and verified, PAN will be issued along with FPI registration and fulfilling KYC of Bank

The notification from the Ministry of Finance can be accessed below:

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The circular issued by SEBI can be accessed below:

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Frequently Asked Questions

Common questions about PAN Through Common Application Form.

The Common Application Form (CAF) is a single form launched by the Ministry of Finance for the purpose of allotting PAN, opening Bank & Demat accounts, and registering Foreign Portfolio Investors (FPIs) with the Securities and Exchange Board of India (SEBI). It aims to ease the compliance system and enable FPIs to concentrate on starting their business.

The CAF procedure is applicable for Category-I and Category-II FPIs, which are also known as "Low Risk" and "Moderate Risk" FPIs, respectively. The Category-III FPIs, known as "High Risk" entities, are not advised to follow the CAF mode as regulated by the finance ministry.

Category-I FPIs include government entities like banks belonging to another country, especially their Central banks, Sovereign Wealth Funds, Multilateral Organizations, etc. These are considered "Low Risk" entities.

Category-II FPIs include regulated entities such as banks, Pension Funds, Insurance Companies, Mutual Funds, Investment Trusts, Asset Management Companies, University-related endowments, and entities already registered with SEBI. These are considered "Moderate Risk" entities.

Sure, the procedure for applying through CAF involves three steps: (1) Fill the Common Application Form (CAF), (2) Fill the 'Annexure to CAF', and (3) Provide supporting documents along with applicable fees for SEBI registration and issuance of PAN. The KYC for banks will be handled based on the submitted documents.

The duly filled-in CAF will be uploaded into the portal, and after a thorough examination, an FPI registration certificate will be generated. SEBI will forward the data and CAF in Form 49AA to the Income Tax authorities for issuing PAN. Once the details are validated and verified, PAN will be issued along with FPI registration and fulfilling the KYC of the Bank.

Yes, according to the article, Designated Depository Participants (DDP) may continue to accept in-transit FPI registration applications for a period of 60 days from the date of issuance of the SEBI Circular.

The article provides links to the 'Annexure to CAF', the notification from the Ministry of Finance, and the circular issued by SEBI. You can access these documents through the embedded PDF files in the article.

No, the CAF procedure is applicable only for new Foreign Portfolio Investors. The article mentions that it is not intended for existing or previously registered FPIs.

The article suggests that you can refer to the official notifications and circulars issued by the Ministry of Finance and SEBI regarding the CAF procedure. Staying updated with these authoritative sources will help you stay informed about any updates or changes related to the CAF process.