News: IDBI, IL&FS, ING get demat breather
(DNA 29/07/2006) Mumbai - Industrial Development Bank of India (IDBI), Infrastructure Leasing and Financial Services (IL&FS) and ING Vysya Bank can now open new demat accounts.
In its second interim order, pending enquiry, the Securities and Exchange Board of India (Sebi) lifted the ban on these companies that prohibited them from opening new demat accounts. Though Sebi was not satisfied with the submissions made by these firmss, it said the prohibition came as a preventive step.
However, the breather to these entities may be temporary, taking into account Sebi’s consideration of their submissions and that the regulator is awaiting completion of inquiry proceedings for a final verdict.
Sebi said that the IL&FS scheme wouldn’t have been possible if the demat accounts of its clients were with a depository participant other than IL&FS.
“It is observed that, in respect of these accounts, correspondence address of IL&FS was mentioned, which thereby implied that KYC (Know Your Client) documentation is merely a paperwork and the requirement of ensuring the identity of the clients is to safeguard the interests of IL&FS and not to establish the genuiness of the clients,” said Sebi in its interim order.
In its second interim order, pending enquiry, the Securities and Exchange Board of India (Sebi) lifted the ban on these companies that prohibited them from opening new demat accounts. Though Sebi was not satisfied with the submissions made by these firmss, it said the prohibition came as a preventive step.
However, the breather to these entities may be temporary, taking into account Sebi’s consideration of their submissions and that the regulator is awaiting completion of inquiry proceedings for a final verdict.
Sebi said that the IL&FS scheme wouldn’t have been possible if the demat accounts of its clients were with a depository participant other than IL&FS.
“It is observed that, in respect of these accounts, correspondence address of IL&FS was mentioned, which thereby implied that KYC (Know Your Client) documentation is merely a paperwork and the requirement of ensuring the identity of the clients is to safeguard the interests of IL&FS and not to establish the genuiness of the clients,” said Sebi in its interim order.
posted by InCar Group Press Room at 11:58
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