Sebi raises basic demat account limit to Rs 10 lakh

An individual needs to have only one demat account where the person is the sole or first holder across depositories to be eligible for BSDA. (PTI)

In a bid to boost the participation of retail investors in the securities market, the Securities and Exchange Board of India (Sebi) has revised the framework for basic service demat account (BSDA), and increased the threshold for the account to Rs 10 lakh.

“In order to further boost participation in the securities market, ease of doing investments and based on representations from market participants, the facility has been comprehensively reviewed,” Sebi said in a circular on Friday.

Also ReadStanley Lifestyles makes stellar debut on June 28; Lists at 34% premium

A basic service demat account, or BSDA, is the  lower cost version of a regular demat account. The facility was introduced by Sebi in 2012 for wider financial inclusion, and reducing the burden of demat charges for retail individual investors.

The maintenance charges of these accounts will be nil for holding securities of over Rs 4 lakh in value, while for value of more than Rs 4 lakh and up to Rs 10 lakh, the same will be Rs 100. For accounts holding securities that are valued over Rs 10 lakh will not be considered BSDA, and therefore regular charges will be levied.

Also ReadStage set for multi-billion dollar flows

An individual needs to have only one demat account where the person is the sole or first holder across depositories to be eligible for BSDA.

The circular added that the value of holding should be determined by the depository participants (DPs) on the basis of the daily closing price or NAV of the securities or units of mutual funds, as the case may be. If 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 into account.

Nod for NRI participation of 100% in IFSC-based FPIs

Sebi late on Thursday night tweaked the guidelines for foreign portfolio investors (FPIs) based in International Financial Services Centres (IFSCs), in a bid to boost their investments in India. FPIs operating from IFSCs can now aggregate up to 100% of their corpus from contributions by non-resident Indians (NRIs), overseas citizens of India and resident Indians, Sebi said in a circular.