Free demat account small investors

The Securities and Exchange Board of India (Sebi) on Monday announced no-frills basic services demat accounts (BSDA) for retail investors, where no charge will be applicable for holdings up to Rs 50,000. The move is aimed at encouraging small investors to invest in equity.

All depository participants (DPs) will make such accounts available with limited services and reduced costs, Sebi said in a circular.“Individuals who have or propose to have only one demat account where they are the sole or first holder shall be eligible to have such an account, provided that the value of securities held in it does not exceed Rs 2,00,000 at any point of time,” the circular said.

An individual can have only one BSDA in his/her name across all depositories.“The annual maintenance charge structure for these accounts will be on a slab basis.There will be no annual maintenance charge if the value of holdings is up to Rs 50,000,while it will be up to Rs 100 for holdings from Rs 50,001 to Rs 200,000,” Sebi said.The value of holdings will be determined by the DP on the basis of daily closing price or net asset value of securities or mutual fund units. If the value of holdings in a BSDA exceeds the prescribed criteria on any given date, the DP may levy charges as
applicable to regular (non-BSDA) accounts from that date onwards, Sebi said.

A transaction statement will be sent to the beneficiary owner at the end of each quarter. If there is no transaction in a given quarter, no transaction statement will be sent for that quarter.
Sebi

Sebi also rationalised services with respect to regular accounts and directed DPs to send only one annual statement for accounts having zero balance and nil transaction during the year and for accounts that become zero balance during the year.