SEBI moots zero fee demat account for small investors

Mumbai: To reduce cost of maintaining securities in demat accounts for retail investors, SEBI has decided to introduce a “Basic Services Demat Account” (BSDA).

All depository participants have to make available a BSDA with limited services, said SEBI.

Individuals opting for BSDA are eligible for one demat account across all depositories where they are the sole or the first holder.

The maximum value of securities in a BSDA should not exceed Rs 2 lakh and at any point of time. Annual maintenance charges would not be levied for value of securities held in a BSDA up to Rs 50,000. Anything above Rs 50,000 and up to Rs 2 lakh would attract annual maintenance charges of Rs 100.

All beneficial owners for BSDA, have to register their mobile number for availing themselves the SMS alert facility for debit transactions. They will be issued at least two delivery instruction slips (DIS) at the time of account opening.

The BSDA value would be determined everyday according to the daily closing price of securities or daily closing NAV.

If the value of the holding in the BSDA exceeds the prescribed criteria as on a particular date, charges applicable to a normal DP account would apply from that date.

Quarterly transaction statement would be sent to the beneficial owner only if the demat account holder has transacted. Similarly holding statements would be sent once in a year to beneficial owners according to their option — in physical or electronic format. While electronic statements would be free of charge, additional physical statements would cost investors Rs 25 each.

Accounts with zero balance and credit balance with nil transactions shall receive only one physical holding statement.

Transaction statements shall not be provided for accounts that becomes zero balance or remains zero balance during the year.

The circular comes into effect from October 1.