The process of matching and corrections thereof for new and existing clients is explained in Annexure-1.

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1 NATIONAL COMMODITY & DERIVATIVES EXCHANGE LIMITED Circular to all trading and clearing members of the Exchange Circular No : NCDEX/TRADING-038/2015/107 Date : March 27, 2015 Subject : UCC details of clients - PAN verification As per the directives of the Forward Markets Commission (FMC), the Exchange has put in place a mechanism to verify and check the authenticity of the PAN details of clients that are uploaded on the Exchange NCFE Customer portal. Therefore, Members are requested to enter the names EXACTLY as per Income Tax records (PAN ) in order to get the client PAN verified. Members should note that initials / abbreviations or changing the order of the first / middle / last names will result in a mismatch. In case clients are inactive (not trading beyond a six month period) and are unreachable and their PAN / exact name data cannot be obtained, members are requested to delete such records. All client codes except Sikkim residents, who have not submitted PAN, with flag other than Verified will be treated as incomplete / invalid KYC. Members will be required to update / correct such records at the earliest. We refer to circular NCDEX/COMPLIANCE-010/2011/313 dated October 11, 2011 titled UCC details of the Clients wherein a penalty of 1 % of the value of trades will be levied for trades that have been carried out by the member without uploading the UCC details of the client. Accordingly, the PAN penalty reports will be modified and such records which are flagged other than Verified or Not Verified will be penalized with effect from July 01, The process of matching and corrections thereof for new and existing clients is explained in Annexure-1. A bulk upload facility has also been provided to members. The structure of uploading more than one record at a time for existing clients is explained in Annexure-2. The circular will be applicable with effect from March 30, / 8

2 For and on behalf of National Commodity & Derivatives Exchange Limited Anand Iyer Chief Information Officer For further information / clarifications, please contact 1. Customer Service Group on toll free number: Customer Service Group by to: askus@ncdex.com 2 / 8

3 Annexure 1 For new client entry: 1. At initial entry / upload, the record will be flagged as Not Verified. 2. Name of the Client as entered / uploaded should match EXACTLY as per the Income-Tax records. 3. For Individuals, the client name should be entered in the sequence First Name, Middle Name, Last Name as provided in the NCFE front end. This is applicable for entry through online KYC screen. For Bulk upload the client name should be entered as First_Name Middle_Name Last_Name. PLEASE NOTE that no extra spaces should be entered, which will result in rejection of the PAN verification. 4. For Non-Individuals, the client name should be entered in the same way as registered in the Income-Tax records. This is applicable for entry through online KYC screen as well as through bulk upload facility. PLEASE NOTE that no extra spaces should be entered, which will result in rejection of the PAN. However the director s / partner s name should be entered in the sequence In online KYC. First Name, Middle Name, Last Name For Bulk upload the client name should be entered as: First_Name Middle_Name Last_Name. 5. Wherever there is an exact match between the client name existing in the Exchange database and that in the Income-Tax, the Exchange will flag such record(s) as Verified. The client name & PAN Fields will be made non editable in the records with flag as Verified. 6. PAN for clients from Sikkim, if provided, will follow the same process flow. However, if the PAN is not provided then the status will be marked as No PAN. 3 / 8

4 7. In case there is a mismatch in the name, the record will be flagged as. Examples and Scenarios of PAN Validation through NCFE. Example 1: Individual client name and Person name for directors and partner s name in Non individual client. Omprakash Jayantbhai Mehra should be entered as given below in the first sample. Names entered in the remaining samples will be rejected as Income-Tax (PAN Record) NCDEX Client (NCFE) First Name Middle name Last Name Omprakash Jayantbhai Mehra Result Omprakash Jayantbhai Mehra Verified Omprakash J Mehra Omprakash J M O J Mehra Example 2: Non Individual client PAVITRA GRAINS PVT LIMITED should be entered as given below in the first sample. Names entered in the remaining samples will be rejected as Income-Tax (PAN Record) NCDEX Client (NCFE) Last Name PAVITRA GRAINS PVT LIMITED PAVITRA GRAINS PVT LIMITED PAVITRA GRAINS PRIVATE LIMITED PAVITRA GRAINS PRIVATE LTD PAVITRA GRAINS PVT. LIMITED Result Verified 4 / 8

5 Example 3: HUF client ATUL KUMAR AND SONS (HUF) Income- Tax (PAN Record) NCDEX Client (NCFE) Last Name ATUL KUMAR AND SONS (HUF) ATUL KUMAR AND SONS (HUF) ATUL KUMAR & SONS (HUF) ATUL KUMAR AND SONS HUF Result Verified 8. In case, an invalid PAN has been entered, the client record will be marked as Invalid PAN. In such a case, members are requested to correct the PAN and re-submit the record. 9. The client name field and PAN has been made editable in NCFE for records with flag as, Invalid PAN, Not Verified and No PAN. For Existing Clients: The Exchange has done a one-time verification of all the existing clients. Accordingly, the records have been flagged as Verified, Invalid PAN or No PAN. 1. For records where PAN has not been mentioned, the record has been flagged as No PAN. 2. The client name field and PAN has been made editable in KYC screen and View and update contact details screen for records with flag as Name Mismatch, Invalid PAN and Not Verified. 3. For records flagged as, members will be required to update the client name EXACTLY as per the Income-Tax records. 4. For Individuals, the client name should be in the following sequence in KYC screen and View and update contact details screen as First Name, Middle Name, Last Name. 5. For Non-Individuals, the client name should be entered as a single string in KYC screen and View and update contact details screen as registered in the Income-Tax records. 5 / 8

6 6. However the director / partner name sequence should be entered as First Name Middle Name Last Name in KYC screen and View and update contact details screen. 7. For records flagged as Invalid PAN, members are requested to correct the PAN and re-submit the record. 8. PAN for clients from Sikkim, if provided, will follow the same process flow. However, if the PAN is not provided then the status will be marked as No PAN. The member will be provided the details of client codes with the flag Not Verified,, No PAN and Invalid PAN in the Update PAN Details webpage in NCFE. Member can update the records in the same webpage and KYC screens. Once this is done by the member, the PAN verification will be performed at scheduled time and the status will be updated accordingly. The Exchange will do PAN verification of all new records and modified record(s) on an ongoing basis. This process will run at scheduled time every hour. For all clients added during the day, the status Verified / / Invalid PAN / No PAN will be displayed only after the scheduled time. Until then, the record will remain marked as Not Verified. 6 / 8

7 Reports and System behavior after PAN verification 1. The summary details are provided in a new screen Update PAN details. The details of clients and their child records shall be given. The columns of the grid are as follows:- Client ID Client Name PAN (given by member) PAN Status Button to edit the record 2. The member shall be given edit functionality to edit the client PAN and client Name in case of Invalid PAN,, No PAN and Not Verified. If the record is verified then the PAN and client name cannot be changed. REPORTS TO MEMBERS A report will also be provided to members with the name NCDEX_TMID_clientPANstatus_DDMMYY_HHMMSS_NN.csv which can be downloaded from extranet member s folder on daily basis. Header in file Details Record Type RECORDTYPE 20 for main client, 30 for first level, 40 for second level Client Code CLIENTCODE Main client code Client Name/ Person name CLIENTNAME 20 client name For 30 and 40 person name Client PAN CLIENTPAN Provided PAN for the record Status PANSTATUS PAN status. Only records with flag Invalid PAN and shall be populated in the report. 7 / 8

8 Annexure 2 File Name : <TMID>_UPDATEPAN_<DDMMYYYY>.csv BULK UPLOAD STRUCTURE SNO FIELD 1 Record Type LENGTH MANDATORY/ OPTIONAL DESCRIPTION CHAR (2) Mandatory 20 indicates primary client. 30 indicates partner/ Director / Karta details. 40 indicates Co-Parcener details. This field shall be pre-populated in the template. 2 TMID CHAR(5) Mandatory This field shall be prepopulated in the template. 3 Client Code 4 Existing Client / Person Name 5 Existing PAN 6 Client Name / Person Name CHAR (10) Mandatory This field will be prepopulated in the template. CHAR (135) Mandatory In case of Record type 20, this field shall contain existing client Name. In case of record type 30 and 40, it shall contain person s name. CHAR (10) Mandatory This will be pre -populated in the template. CHAR(135) Mandatory Client name/ Person s name as mentioned in sequence First Name, Middle Name and Last name. In case of non-individual client, the user can enter name as registered in Income Tax Department. 7 PAN CHAR(10) Mandatory Valid PAN in format (5 char 4 digits 1 char) registered with Income Tax Department. 8 / 8