SEBI introduces zero fee demat account for small investors
27 August 2012
SEBI has decided to introduce a `Basic Services Demat Account' (BSDA) in order to reduce the cost of maintaining securities in demat accounts for retail investors and to attract small investors to the stock market.
All depository participants have to make available a BSDA with limited services, said SEBI.
All individuals who have or propose to have only one demat account where they are the sole or first holder will be eligible to have a BSDA provided that the value of securities held in the demat account does not exceed Rs2,00,000 at any point of time. An individual can have only one BSDA in his/her name across all depositories.
There will be no annual maintenance charges (AMC) for BSDA holding of up to Rs50,000 holdings from Rs50,001 to Rs2,00,000 value will be charged at the rate of Rs100.
The value of holding will be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds. If the value of holding in such BSDA exceeds the prescribed criteria at any date, the DPs may levy charges as applicable to regular accounts (non-BSDA) from that date onwards.
Transaction statements will be sent to the BO at the end of each quarter. If there are no transactions in any quarter, no transaction statement may be sent for that quarter.
One annual physical statement of holding will be sent to the stated address of the BO in respect of accounts with no transaction and nil balance and for remaining accounts one annual statement of holding will be sent in electronic or physical form as opted for by the BO.
Electronic statements will be provided free of cost. In case of physical statements, the DP will provide at least two statements free of cost during the billing cycle. Additional physical statement may be charged at a fee not exceeding Rs25 per statement.
In order to reduce the cost of compliance of DPs, following rationalisation measures were decided for regular accounts:
For accounts with zero balance and nil transactions during the year, the DPs will send one physical statement of holding annually to such BOs and shall resume sending the transaction statement as and when there is a transaction in the account.
For accounts, which become zero balance during the year, no transaction statement may be sent for the duration when the balance remains nil. However, an annual statement of holding will be sent to the BO.
For accounts with credit balance but no transactions during the year, one statement of holding for the year will be sent to the BO.