If you invest in the stock market or are planning to invest, this news may be useful for you. In fact, to increase the participation of small investors in the securities market, SEBI has capped the Basic Service Demat Account (BSDA) at Rs. 2 lakhs to Rs. 10 lakh has been done. The Securities and Exchange Board of India (SEBI) has said in a circular that the new guidelines will come into effect from September 1.
Increasing the limit on the value of securities held in Basic Service Demat Accounts will encourage small investors to trade in the stock market. Let us tell you that to reduce the burden of demat charges on investors with small portfolios, the market regulator SEBI launched the Basic Service Demat Account facility in 2012.
What are the conditions?
SEBI said that if a person has only one demat account as sole or first holder and only one account in his name in all depositories. It is eligible for demat account with basic service. The condition is that the value of the securities held in the account should not exceed Rs 10 lakh at any point of time.
What were the rules until now?
Before this change, to be eligible for a basic serviced demat account, a person was allowed to hold up to Rs 2 lakh in debt securities and up to Rs 2 lakh in non-debt securities in a single demat account. SEBI said that for BDSA Rs. No annual maintenance charge will be charged for portfolio value up to 4 lakhs, while Rs. 4 lakhs and above Rs. 100 for portfolio value up to 10 lakhs.
However, if the portfolio value is Rs. 10 lakhs, then the basic service demat account should be automatically converted into a regular demat account. The regulator said electronic statements will be provided free of cost to demat accounts along with the basic service. Also, physical account details can be obtained by paying 25 rupees.