Fre­quently Asked Points

Consumer Voice - - Demat Account -

Other se­cu­ri­ties that can be held in a sin­gle de­mat ac­count

An in­vestor can also hold the cer­tifi­cates of his fi­nan­cial in­stru­ments such as shares, bonds, gov­ern­ment se­cu­ri­ties, mu­tual funds and ex­change-traded funds (ETFs such as gold) in a sin­gle de­mat ac­count.

In­sur­ance de­mat ac­count

As of now, e-in­sur­ance prod­ucts need a sep­a­rate in­sur­ance de­mat ac­count. The In­sur­ance Reg­u­la­tory and De­vel­op­ment Au­thor­ity of In­dia (IRDA) is yet to make hold­ing of in­sur­ance de­mat ac­counts com­pul­sory.

Op­er­at­ing a joint ac­count

An in­vestor can­not op­er­ate a joint ac­count on ‘ei­ther or sur­vivor’ ba­sis like a nor­mal bank ac­count. Any in­struc­tion in a de­mat ac­count needs to be ex­e­cuted ‘jointly’. How­ever, if the ben­e­fi­cial owner au­tho­rises any per­son to op­er­ate his ac­count by ex­e­cut­ing a power of at­tor­ney and sub­mits the same to the DP, that per­son can op­er­ate the ac­count on be­half of the ben­e­fi­cial owner.

Min­i­mum bal­ance of se­cu­ri­ties in de­mat ac­count

There is no rule to keep any min­i­mum bal­ance in de­mat ac­count.

Charges levied on de­mat ac­count

Ac­cord­ing to SEBI guide­lines, there is no charge for open­ing of de­mat ac­count. How­ever, banks and DPs could charge a nom­i­nal amount to­wards know-your-ac­count reg­is­ter­ing charges (KRA) for meet­ing out-of-pocket ex­penses like scan­ning the KYC doc­u­ments. Other types of fees charged are an­nual main­te­nance fee, cus­to­dian fee and trans­ac­tion fee. Fees to­wards de­ma­te­ri­al­iza­tion and re­ma­te­ri­al­i­sa­tion (con­vert­ing elec­tronic form back to phys­i­cal form) of se­cu­ri­ties range be­tween Rs 10 and Rs 40 per re­quest form. An­nual main­te­nance fee is charged by the DP to main­tain your de­mat ac­count and can range be­tween Rs 300 and Rs 500 an­nu­ally.

Open­ing a ben­e­fi­cial owner (BO) ac­count to trade in the cap­i­tal mar­ket

As per the avail­able sta­tis­tics at Bom­bay Stock Ex­change (BSE) and Na­tional Stock Ex­change (NSE), 99.9 per cent trans­ac­tions take place in de­ma­te­ri­al­ized mode only. There­fore, in view of the con­ve­nience of trad­ing in de­ma­te­ri­al­ized mode, it is ad­vis­able to have a ben­e­fi­cial owner (BO) ac­count for trad­ing at the stock ex­changes. How­ever, to fa­cil­i­tate trad­ing by small in­vestors (max­i­mum 500 shares, ir­re­spec­tive of their value) in phys­i­cal mode, the stock ex­changes pro­vide an ad­di­tional trad­ing win­dow to ex­tend one-time fa­cil­ity to small in­vestors to sell phys­i­cal shares that are in the com­pul­sory de­mat list. The buyer of these shares has to de­mat such shares be­fore fur­ther selling.

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