 |
| DEMAT ACCOUNT OPENING |
|
|
|
| What are the benefits of opening a demat account with CDSL? |
|
A demat account has become a necessity for all categories of investors for the following : |
| a) SEBI has made it compulsory for trades in all listed scrips to be settled in demat mode. Although, trades upto 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates etc. | | b) It is a safe and convenient way to hold securities compared to holding securities in physical form.. | | c) No stamp duty is levied on transfer of securities held in demat form. | | d) Instantaneous transfer of securities enhances liquidity. | | e) It eliminates delays, thefts, interceptions and subsequent misuse of certificates. | | f) Change of address, registration of Power of Attorney - can be effected across companies by one single instruction to the DP. | | g) Each share is a market lot for the purpose of transactions - so no odd lot problem. | | h) Any number of securities can be transferred/delivered with one delivery order. Therefore,
a. paperwork and signing of multiple transfer forms is done away with.
b.It facilitates taking advances against securities. | | i) Immediate credits in case of any allotment in bonus, rights issues and IPOs. |
|
 Top |
|
| What should an investor do to open an account with a DP? |
|
| a) The process of opening a demat account through a DP of CDSL is very simple and easy. It is similar to the opening of a bank account. | | b) Investor has to first choose a DP based on his convenience and the DP's charges. | | c) Besides submitting an application in the prescribed form, the investor should submit a photocopy of the PAN card along with the original as proof of identity and address proof such as passport, ration card, etc to the DP. | | d) Before opening the demat account, the investor will have to execute an agreement on a stamp paper to be provided by the DP, which defines the rights and obligations of both, the investor and the DP. | | e) On opening a demat account, a unique BO ID (Beneficial Owner Identification) Number is allotted, which should be quoted in all future transactions. |
|
| Top |
|
| Is there any restriction to have demat account with only one DP? |
|
Under the depository system, there is no restriction on opening a BO account with the same or other DPs, subject to the condition that all account opening requirements are complied with. |
|
|
| Top |
|
| Is it necessary for an investor to open an account with the same DP as that of his broker for settling the trades done through him? |
|
There is absolutely no compulsion on any investor to open his demat account with the same DP as that of his broker. Investor can open account with the DP of his choice and can carry on his trading activity through a broker of his choice. |
|
| Top |
|
| Is the Nomination facility available in Demat Accounts? |
|
The nomination facility is available in the demat accounts. It is advisable for all the individual BO's to avail of this facility. |
|
| Top |
|
| Do all DPs collect account opening charges? |
|
SEBI has directed that no investor should pay account opening charges, besides the statutory charges. |
|
| Top |
|
| Can all securities be dematerialised through a single demat account? |
|
Yes. Any number of securities admitted with CDSL can be dematerialised and held in one demat account. |
|
| Top |
|
| Can a sole holder of the share certificate, add/delete any name as a joint holder, at the time of dematerialising the share certificate? |
|
It is not possible to add or delete any name while dematerialising a share certificate. If the shares held in single name are intended to be held in any joint account, they have to be transferred to such names before they are dematerialised. Alternatively, such shares can be dematerialized first in the demat account in the single name and then transferred to the demat account in the joint names, or vice-versa, through an off-market transaction. |
|
| Top |
|
| Can there be a mix up of securities of different companies held in one demat account? |
|
Different securities, even if of the same issuer, are given a separate ISIN to identify each one of them and each ISIN is maintained and accounted for separately within an account. Therefore, there is no question of any mix up. However, BOs are advised to indicate the correct ISIN while issuing any instruction. |
|
| Top |
|
| Does a BO have to keep any minimum balance of securities in his demat account? |
|
A demat account can be opened and maintained even with nil balance. |
|
| Top |
|
| How does a BO get information that his account has been updated after each transaction? |
|
| a) DP sends to BO, a statement of transactions and balances at least once every month, even where a single transaction has taken place during the month. The statement can be sent more frequently, if so desired by BO against payment of additional charges.
| | b) With the launch of easi (Electronic Access to Securities Information), the internet facility to access CDSL demat account details, a BO can know up-to-the-moment status of his account any-time, any-where (which is currently updated every 15 minutes), if the BO has registered under easi through his DP. |
|
|
| Top |
|
| Is it mandatory to submit PAN card details ? |
|
Yes. SEBI has made it mandatory for all existing and new account holders to submit a copy of their PAN card, along with the original for verification. |
|
| Top |
|
| What happens if a BO loses his statement of holdings? |
|
| The BO should inform the DP about the loss of the statement of holdings and request for the issue of a duplicate statement. |
|
|
| Top |
|
| Do all DPs have access to account details of all CDSL BOs? |
|
No. A DP cannot access the BO accounts of any other DP. It can have access only to those demat accounts, which are serviced by it. |
|
| Top |
|
 Back |
