SEBI update:
On Friday, capital market regulator SEBI increased the threshold for basic service demat accounts (BSDA) from Rs 2 lakh to Rs 10 lakh, a five-fold increase aimed at enhancing investor participation. The new guidelines will take effect from September 1, as stated in a SEBI circular. Introduced by SEBI in 2012, a BSDA is a simpler version of a regular demat account designed to reduce demat charges for investors with small portfolios. This threshold determines the maximum value of securities a BSDA can hold.
With this change, BSDA holders can now hold securities worth up to Rs 10 lakh, up from the previous Rs 2 lakh limit. The increased threshold is expected to promote retail participation in the stock market, especially among small investors.
Who can open a basic services demat account?
Only individuals meeting certain conditions can open and operate a BSDA:
– The investor can only have one demat account as the sole or first holder.
– The investor can only have one such account in their name across all depositories.
– The combined value of securities (debt and non-debt) should not exceed the threshold (Rs 10 lakh effective from September 1).
Annual maintenance fee:
– Portfolios worth up to Rs 4 lakh will not incur any annual maintenance charges.
– Portfolios above Rs 4 lakh but up to Rs 10 lakh will incur a fee of Rs 100, according to the circular.
What happens if the portfolio exceeds Rs 10 lakh?
If the portfolio exceeds Rs 10 lakh, the BSDA is automatically converted into a regular demat account.
