Demat opening charges waived

The Securities and Exchange Board of India (Sebi) has removed demat account opening charges and custodial charges for investors effective from today.

This was announced by Sebi Chairman GN Bajpai at a seminar organised jointly by Sebi and the ICFAI University.

Most depository participants, however, do not levy any demat account opening charges. However, a charge is levied for closing accounts.

The main charges that investors have to bear are annual maintenance charges and transaction charges.

Custodial charges were introduced by the National Securities Depository Ltd (NSDL) around two years back. Anup Bagchi managing director and CEO of ICICI Direct said, "It is too early to say anything, but the impact should not be much."

The statements made by the Sebi chief effectively means that there will be charges only on transactions and no charges will be levied for idle accounts, apart form the annual maintenance charges.

The annual maintenance charge is roughly Rs 250 per annum for all categories of investors. So far as transaction charges are concerned, for retail investors it is around Rs 10 per trade for purchases and around Rs 20 per trade for sales.

These are aligned on the benchmarks set by NSDL. For non-retail investors the charges vary from Rs 25 to a maximum of Rs 500 per trade.

Custody charges are levied at 75 paise, per ISIN (International Security Identification Number) per account per month, for both retail and non-retail investors. For the latter category it is a maximum of Rs 60 per month.