Friday, September 28, 2012

60% of investors will beneit from New no-frills demat account

With an aim to encourage an investment culture in the country, Sebi announced no-frills, or basic trading accounts, for retail individual investors with no charges applicable for holdings up to Rs 50,000.

Investors can hold securities worth up to Rs 2 lakh in these accounts and are called Basic Services Demat Account (BSDA). The charges would be capped at a maximum of Rs 100 a year for funds exceeding Rs 50,000.

Every existing demat account holder can request the DP to convert your demat account into BSDA on the date of the next billing cycle based on the value of holding of securities in the account as on the last day of the previous billing cycle.

This decision to introduce no-frills demat accounts is part of a new initiative that will benefit 50 percent of investors as they don’t have to pay any account maintenance charges. Around 10 percent of investors will pay minimal charges under the new norms, Sebi Chairman U K Sinha said. “By that one simple decision (regarding basic service demat account), about 60 percent of demat holders will be benefited.


Finahub Team