Ans. A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.
Ans. A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP. This is similar to opening an account with any branch of a bank in order to utilise the bank’s services. Suggestions on how to select a DP are given in Section IV.
Ans The benefits of participation in a depository are:
Ans NSDL offers following facilities
Ans BSDA is like a regular demat account but with no or low annual maintenance charges.
Ans Individual persons meeting the following conditions may avail the benefits of BSDA –
Ans The annual maintenance charges for BSDA, as stipulated by SEBI are as below:
No AMC if the value of holding is up to ₹50,000.
If the value of holding is more than ₹50,000 but less than ₹2,00,000, then AMC not exceeding ₹100 per year may be charged.
For the value of holding exceeding ₹2,00,000, DP may charge AMC as per its regular rates.
The value of the holding for this purpose is determined by the DP based on the daily closing price or NAV for the securities / mutual fund units. If value of holding in BSDA exceeds ₹2,00,000 on any day, DP may levy charges as applicable to regular accounts (non-BSDA) from that day onwards.
Ans Opening a demat account is quite simple. All you have to do is to approach a NSDL DP, which will help you to complete the formalities. You need to fill up a form, submit PAN card and proof of address. In addition, you need to provide details of your bank account.
After your demat account is opened, your DP will provide you DP ID and Client ID, a copy of your Client Master Report containing your demat account related details, tariff sheet and ’Rights & Obligations of Beneficial Owner and Depository Participant‘. DP ID is 8 characters long code, (example IN3XXXXX) allotted by NSDL to all DPs to identify them. Client ID is 8 digit long code used to identify the clients in the system. Combination of DP ID and Client ID makes your unique account number in the NSDL system.
You should verify the Client Master Report to ensure that all your details have been recorded correctly in depository system. If you want to trade in shares etc. (i.e. buy or sell), you would also need to open a Trading / Broking account with any SEBI registered stockbroker. There are many DPs which offer 3-in-1 arrangement for the benefit of investors (3-in-1 is a combination of demat account, trading account and bank account).
Ans You can select your DP to open a demat account just like you select a bank for opening a savings account. Some of the important factors for selection of a DP can be:
Convenience – Proximity to your office/residence, business hours.
Comfort – Reputation of the DP, past association with the organization, whether the DP is in a position to give the specific service you may need?
Cost/ level of service – The service charges levied by DP and the service standards.
For list of DP locations and their comparative charge structure, please visit https://nsdl.co.in/joining/joincharges.php.
Ans NSDL has specified certain basic eligibility criteria for becoming a DP. The criteria are similar or even higher in certain respects than the corresponding provisions of SEBI regulations. All the DPs are same in the sense they are appointed by NSDL only after grant of Certificate of Registration by SEBI to them. However, the type of services offered, service standards and charges for the services rendered may differ among DPs.
Ans Once you have decided to open an account with a particular DP, you may approach that DP and fill up an account opening form. You would be required to provide your photograph and self-attested copy of following documents –
PAN Card (for Sikkim residents who may not have PAN, other proof of identity).
Proof of address (any one of Passport, Driving license, Voter’s Identity card, Aadhaar card and NREGA job card).
Copy of cancelled cheque or passbook or bank statement containing your name, account number, IFSC and MICR code.
Ans It is mandatory to establish the identity of the applicant at the time of opening account as per SEBI guidelines. This is done by the DP’s staff by verifying the affixed photograph on account opening form and the photo seen on document on PAN card with the person seeking to open the account. For Joint account holders, the ’in-person verification’ is required for all the holders..