Professional Documents
Culture Documents
Demat Account
Demat Account
WHY DEMAT?
The demat account reduces brokerage charges, makes
pledging/hypothecation of shares easier, enables quick
ownership of securities on settlement resulting in increased
liquidity, avoids confusion in the ownership title of securities,
and provides easy receipt of public issue allotments. It also
helps you avoid bad delivery caused by signature mismatch,
postal delays and loss of certificates in transit. Demat account
holders can also avoid stamp duty, avoid filling up transfer
deeds and obtain quick receipt of such benefits as stock splits
and bonuses.
OPENING A DEMAT
ACCOUNT?
STEPS
First an investor has to approach a DP and fill up an account
opening form. The account opening form must be supported by
copies of any one of the approved documents to serve as proof
of identity {POI} and proof of address {POA} as specified by
SEBI. Besides, production of PAN card in the original at the time
of opening of account has been made mandatory effective from
April 01, 2006.
Further, the investor has to sign an agreement with DP in a
depository prescribed standard format, which details rights and
duties of investor and DP. The DP will open an account in the
system and give an account number, which is also called as
BOID {Beneficiary Owner Identification Number}.
Further, SEBI has vide circular dated November 09, 2005 advised
that with effect from January 09, 2006, no charges shall be levied
by a depository on DP and consequently, by DP on Beneficiary
Owner {BO} when the BO transfers all the securities lying in his
account to another branch of the same DP or to another DP of
the same depository or another depository, provided the BO
Account/s at transferee DP and at transferor DP are one and the
same, i.e. identical in all respects.
STEPS
You can open more than one depository account in the
same name with single DP/ multiple DPs.
No minimum balance is required to be maintained in a
depository account.
You can give a one time standing instruction to your DP to
receive all the credits coming to your depository account
automatically.
PROCEDURE
Fill account opening form {available with your DP}.
Give your DP the duly filled account opening form
with
DOCUMENTS REQUIRED
The extent of documentation required to open a demat
account may vary according to your relationship with the
institution. If you plan to open a demat account with a bank, a
savings account holder has and edge over the non-account
holder. In fact, banks usually offer additional incentives to
customers who open a demat account with them.
Along with the application form, your photographs (with coapplicants) and proof of identity / residence / date of birth
have to be submitted.
The DPs also ask for a DP Client Agreement to be executed
on non-judicial stamp paper.
Here is a board list:
PAN card
Voters ID
Passport
Ration card
Drivers license
Photo credit card
Employee ID card
Bank attestation
IT returns
Electricity/ Landline phone bill
While they only ask for photocopies of the documents, they will
need the originals for verification. You will have to submit a
passport size photograph on which you sign across.
DEMAT CONVERSION
In order to dematerialize physical securities one has to fill in a
DRF {Demat Request Form} which is available with the DP and
submit the same along with physical certificates one wishes to
dematerialize. Separate DRF has to be filled with each ISIN
number.
DEMAT BENEFITS
The benefits are enlisted below: