SEBI has accepted Aadhaar card as a valid proof of identity and valid address proof in the capital market transactions like Mutual Fund Investment, Opening of Demat Account with securities brokers, Opening of PMS Account or Investment in Bonds or CIS Scheme under the Proof of Address for Know Your Client (KYC) norms.
On 13th August,2012 Market regulator SEBI (Securities and exchange Board of India) announced that the Aadhaar card or Aadhaar number issued by UIDAI can now be used as a valid address proof or valid verification tool for their respective accounts. The investors of the capital market can use Aadhaar card for KYC in mutual funds investment, Portfolio Management Account, Any Transaction through brokerage firms, participants of deposits, investment funds, and collective schemes of investment and in other capital marketing entities. SEBI has issued the circular in which it has accepted Aadhaar card was valid tool of identity authentication under the KYC (Know Your Client) norms of the capital market. This Circular issued under Section 11(1) of the Securities and Exchange Board of India Act, 1992 is for protecting the interest of the investors in the securities to promote the development and regulate the securities markets.
List of other documents which can be used for validation in capital market are passports, driving license, ration card, bank statement, voter ID card, utility bills as well as PAN card (Permanent Account Number). Since the Aadhaar card is based on biometric data of users it gives more comfort to KYC authorities.
SEBI after consultation with UIDAI, Government of India has now been decided that the Aadhaar letter issued by the UIDAI shall be admissible as proof of address in addition to its presently being recognized as proof of identity. SEBI has also informed the same to the Association of Mutual Funds in India (AMFI) and KYC Registration Agencies (KRAs) as well.
Aadhaar card is a 12-digit unique number which is issued by UIDAI (Unique Identification Authority of India) on behalf of Government of India. Aadhaar number is issued to residents of India i.e. any individual, irrespective of age and gender that is a resident in India and has satisfied the verification process. NRIs (Non residents of India) as well as foreign citizen how live in India also considered in this project. UIDAI was setup by the Government in 2009 with a mandate to issue unique number or unique identity number to every resident and to link the Personal biometric details such as finger prints, iris scan, Photograph for face and also demographic information which will be used to identify them anywhere in India, and to get access to various services in India.