Another decision in your interest! SEBI's big step for small investors - EXPLAINED

decision in your interest! sebi's big step for small investors! basic services demat account charges, limit revised - what is it explained

SEBI Basic Services Demat Account Rules: Capital market regulator Securities and Exchange Board of India (SEBI) on Friday announced a big decision in the interest of small investors. The regulator has tweaked the eligibility criteria of the Basic Service Demat Account (BSDA).

"In order to further boost participation in securities market, ease of doing investments and based on representations from market participants, the facility has been comprehensively reviewed," the regulator said in a statement on Friday while laying down rules for opting BSDA.

What is Basic Service Demat Account?

A Basic Services Demat Account (BSDA) is a kind of demat account which is for small investors who are not a regular investor in stocks, bonds, ETFs, mutual funds, etc. The BSDA can be maintained at a reduced cost. In its latest circular, SEBI has tweaked the eligibility rules for the same.

Now, an individual shall be eligible to opt for BSDA if they have or propose to have only one demat account where they are the sole or first holder. Further, the individual shall have only one BSDA in their name across all depositories. Along with this, the value of securities held in the demat account shall not exceed Rs 10 lakh for debt and other than debt securities combined at any point of time.

SEBI's latest circular shall come into effect from September 1, 2024.

Basic Service Demat Account Charges

- NIL if the value of holdings in the demat account (debt as well as other than debt securities combined) is up to Rs 4 lakh.

- Rs 100 for an amount more than Rs 4 lakhs but up to Rs 10 lakhs.

- If not a BSDA or more than Rs 10 lakhs then regular AMC may be levied.

“The value of holding shall be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds, as the case may be. Where such price is not available, the last traded price may be taken into account and for unlisted securities other than units of mutual funds, face value may be taken in to account,” SEBI underscored.

Services for Basic Services Demat Accounts

- Electronic statements shall be provided free of cost

- Physical statement may be charged at a fee not exceeding Rs 25 per statement

- All other conditions as applicable to regular demat accounts, other than the ones mentioned above, shall continue to apply to basic services demat account.