You will have to sign an agreement with DP in the depository prescribed standard format, which gives details of rights and duties of investor and DP. You are entitled to receive a copy of the agreement and schedule of charges for future reference.
The DP will then open an account and give you the demat account number. This is also called beneficial owner identification number (BO ID). All your purchases / investments in securities will be credited to this account. If you sell your securities, your demat account will be debited.
Documents Required For Demat Account
What is a ‘Depository’? A depository is an organization where the securities of an investor are held in electronic form. A depository can be compared to a bank. To avail of the services of a depository, an investor has to open an account with the Depository through a depository participant, just as he opens an account with the bank. Holding shares in the account is akin to holding money in the bank
A Depository Participant (DP) is an agent appointed by the Depository and is authorized to offer depository services to all investors. An investor cannot directly open a demat account with the depository. An investor has to open his account through a DP only. The DP in turn opens the account with the Depository. The DP in turn takes up the responsibility of maintaining the account and updating them as per the instructions given by the investor from time to time. The DP generates and provides the holdings statement from time to time as required by the investor. Thus, the DP is basically the interface between the investor and the Depository.
The person who holds a demat account is a beneficiary owner. In case of a joint account, the account holders will be beneficiary holders of that joint account
t present, India has only two depositories—National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL). NSDL is the first depository to have started in India, whereas CDSL followed them. However, most of the services offered by both these depositories are similar. Today almost all the companies listed in dematerialized form with NSDL are available with CDSL.
As per the available statistics at BSE and NSE, 99.9% transactions take place in dematerialised mode only. Therefore, in view of the convenience of trading in dematerialised mode, it is advisable to have a beneficial owner (BO) account for trading at the exchanges.
Yes. However, the investor must inform the DP regarding change in the bank account and corresponding change in MICR / IFSC code while updating their bank account details with DP. In the depository system monetary benefits on the security balances are paid as per the bank account details provided by the investor at the time of account opening. The investor must ensure that any subsequent changes in bank account details are informed to the DP.
Investor should immediately inform his DP along with necessary documents, who in turn will update the records. This will obviate the need of informing different companies.
No,the investor does not have to keep any minimum balance of securities in his account
irst 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 which serve as proof of identity (POI) and proof of address (POA) as specified by SEBI. Apart from these PAN card has to be shown in original at the time of account opening from April 01, 2006. All applicants should carry original documents for verification by an authorized official of the DP, under his signature. Investor has to sign an agreement with DP in a depository prescribed standard format, which gives details of rights and duties of investor and DP. DP should provide the investor with a copy of the agreement and s
No. Depository / DP can be chosen by investor as per convenience irrespective of the DP of the broker.