To facilitate individuals avail the benefits of BSDA, Sebi today asked depository participants to convert all eligible demat accounts into basic trading accounts.
Basic Services Demat Account (BSDA) offers limited services at lower cost to investors.
So far, few demat accounts have actually been converted into BSDA during the last three years despite large number of demat accounts being eligible for conversion into BSDA.
Accordingly, Sebi has directed depository participants (DPs) to "convert all such eligible demat accounts into BSDA unless such Beneficial Owners (BOs) specifically opt to continue to avail the facility of a regular demat account."
In a circular, Sebi said that DPs would assess the eligibility of the BOs "at the end of the current billing cycle and convert eligible demat accounts into BSDA."
DPs are those who act as intermediaries between depositories and investors.
The regulator also asked depositories -NSDL and CDSL -to make amendments to the relevant bye-laws, rules and regulations for the implementation of the directions.
In 2012, markets regulator Sebi had announced no-frills or basic trading accounts for retail individual investors with no charges applicable for holdings up to Rs 50,000.
The investors can hold securities worth up to Rs two lakh in these no-frills accounts, BSDA, but the charges are capped at a maximum of Rs 100 a year for funds exceeding Rs 50,000.
All individuals, who have only one demat account and have accounts where the person is not the first holder, are eligible for BSDA.
Investors can hold stocks, mutual funds and other securities in these accounts.
