 "Making investing easier: Sebi proposes changes for small investors")
The Securities and Exchange Board of India (Sebi) wants to make investing in the stock market easier for people with smaller amounts of money. They have proposed a new rule for a type of account called a Basic Service Demat Account (BSDA).
What is a BSDA?
A BSDA is a special account that allows you to hold stocks and other investments electronically. It's like a safe deposit box for your investments, but instead of physical certificates, you have electronic records. BSDAs typically have lower fees than regular demat accounts.
What's changing?
Currently, you can only hold up to Rs 2 lakh worth of investments in a BSDA. Sebi is proposing to raise this limit to Rs 10 lakh. This means you can invest more money and still benefit from the lower fees of a BSDA.
Other proposed changes:
More From This Section
- There will be no annual fees for accounts with a value of Rs 4 lakh or less.
- Accounts with a value between Rs 4 lakh and Rs 10 lakh will have a small annual fee of Rs 100.
- Accounts that exceed Rs 10 lakh will automatically be converted to a regular demat account (which may have higher fees).
Why is Sebi doing this?
Sebi hopes that by making BSDAs more attractive, more people will be encouraged to invest in the stock market.
What happens next?
Sebi is asking for feedback on these proposals until June 26. After that, they will decide whether to make the changes permanent.
Eligibility
Listing out eligibility criteria, Sebi said an individual needs to have only one demat account where he/she is the sole or first holder and the individual needs to have only one BSDA in his/her name across all depositories.
With regards to services for BDSA, the regulator said that electronic statements should be provided free of cost to such account holders, besides, physical statements can be charged at Rs 25 per statement.