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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

SEBI-Annexure-to-CAF

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:

PAN-through-CAF

The circular issued by SEBI can be accessed below:

SEBI-Circular