Account Opening
In order to avail of depository facilities, an investor has to open a beneficiary account with a depository participant of his choice.This is similar to opening a bank account to use the banking services.
Just as one can hold funds in a bank account and transfer funds across accounts without actually handling cash;one can hold securities in a depository account and transfer securities across depository accounts without actually handling share certificates.
The account holder is called 'beneficial owner' in a depository system and the account is known as 'beneficiary account'.
- No minimum balance is required to be retained in a beneficiary account.
- An investor can close a beneficiary account with one DP and open an account with another DP.
- To dematerialise existing physical holdings, the beneficiary account must be opened in the same ownership pattern in which the securities are held in the physical form e.g.,if one certificate is in individual name and another certificate is jointly held by X & Y, two different accounts should be opened. However, in case of joint holders, securities can be dematerialised in the same account even though share certificates are in different sequence of names e.g., shares held in joint names of X & Y can also be dematerialised in an account opened in the names of Y & X as well by submitting an additional form (Transposition Form) alongwith Demat Request Form to the DP.However, shares held jointly by X & Y cannot be dematerialised in an account opened in the name of only X or only Y or any combination of a joint account with three names i.e., X, Y and Z.
- Investor will choose a DP for the purposes of opening beneficiary account. The choice of the investor may be based on convenience, comfort, services offered, cost or any other reason.
- The investor will obtain the relevant account opening form from the chosen DP.
- For the purpose of verification, investor has to submit the following documents along with the prescribed account opening form. In case investor wants to open account jointly with other person(s), following should be submitted for all the account holders
- Proof of Identity(POI) (copy of any one proof)
| Passport, Voter ID Card |
Driving License |
| PAN Card with photograph |
|
| Identity card/document with applicant's Photo,issued by |
| a) Central/State Government and its Departments |
| b) Statutory/Regulatory Authorities |
| c) Public Sector Undertakings |
| d) Scheduled Commercial Banks |
| e) Public Financial Institutions |
| f) Colleges affiliated to Universities (this can be treated as valid only till the time the applicant is a student) |
| g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their members; and |
| h) Credit cards/Debit cards issued by Banks. |
- Proof of Address (POA) (copy of any one proof)
| Ration Card |
Passport |
| Voter ID Card |
Driving License |
| Bank Passbook |
Verified copies of Electricity bills (not more than two months old)/ Residence Telephone bills (not more than two months old)/ Leave and License agreement / Agreement for sale. |
| Self-declaration by High Court & Supreme Court judges, giving the new address in respect of their own accounts. |
| Identity card/document with address,issued by |
| a) Central/State Government and its Departments |
| b) Statutory/Regulatory Authorities |
| c) Public Sector Undertakings |
| d) Scheduled Commercial Banks |
| e) Public Financial Institutions |
| f) Colleges affiliated to Universities (this can be treated as valid only till the time the applicant is a student) |
| g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; |
- Passport-size photograph
- Copy of PAN card
Original documents must be taken to the DP for verification. DP will carry out "in-person verification" of account holder(s) at the time of opening the account.
Note: Your DP may ask on additional proof of identity / address.
- The DP will also provide a copy of the DP-Client agreement.
- Account opening form require the applicants to give the following details
- (a) Name(s) of account holder(s) - The investor should ensure that the name is identical to that which appears on the certificate(s) to be dematerialised. In case of joint holdings, account may be opened in any one combination, irrespective of the sequence in which names are appearing on share certificates. Investors are advised to open their account in their fully expanded name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of the information.
- (b) Mailing and communication address (es) - The veracity of the applicant's address is determined through the documents submitted for verification like ration card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts, proof is required for both addresses - that of the account holder as well as the constituted attorney. For corporate accounts, a copy of Memorandum of Association, Articles of Association, Board resolution permitting opening of account, the registered address of the company have to be furnished.
- (c) Details of guardian in case account holder is a minor - Only a guardian can open a depository account for a minor. The guardian is required to sign the application form, and details of his name and address need to be given in addition to the details of the minor.
- (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts - For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original or attested copies of the power of attorney and the approval letter from RBI permitting them to invest, as the case may be. If the account holder is an FII or an OCB, SEBI registration details along with attested copy of registration certificate issued by SEBI and authorisation letter is required.
- (e) Details of bank account - Details of bank account of the account holder, including the nine digit code number of the bank and branch appearing on the MICR cheques issued by the bank have to be filled in the application form. Companies use this information for printing them on dividend/interest warrants etc.
- (f) Nomination declaration - A beneficial owner can make a nomination of his account in favour of any person by filing the nomination form with his DP. Such nomination is considered to be conclusive evidence of the account holder'(s) disposition in respect of all the securities in the account for which the nomination is made.
- (g) Standing Instruction - a facility of standing instruction is provided to the investors for receiving securities to the credit of their accounts without giving a separate receipt instruction.
- The demat account cannot be operated on "either or survivor" basis like the bank account. In case of the joint account for the beneficial owners, all the joint holders have to sign the account opening form.
- The investor will submit to his DP the duly filled in account opening form & DP-client agreement along with the documents.
- The DP will verify whether the account opening form has been duly filled in or not. He will also verify the submitted documents. For corporate investors, the DP will also verify whether the board resolution for the authorised signatories has been enclosed. The DP will ensure that client's signature is recorded on the form which will serve as specimen for authorisations in future.
- If the application form and documents are in order, the DP will accept them and give an acknowledgement slip duly signed and stamped to the client. The DP will execute the agreement and give a copy of it to the client.
- After completion of all documentation, the DP will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL to the DP) screen provided for the purpose. After entering client details in the system, a client account number will be generated by the DPM. The DP will enter this in the account opening form.
- On successful opening of the account, the DP will give
- Client Id - an eight digit number to be used along with DP Id for any future transactions.
- Delivery Instruction slip book.
- A copy of the report listing the client details captured in the DPM database to the client. The report will be generated by the DPM.
- Corporate investors to enclose Memorandum of Association/Trust deed/Board resolution for the authorised signatories along with the account opening form.
- Details with respect to the bank account details of an investor must be indicated in the space provided for the same in the account opening form.
- If an investor is interested in availing the facility of standing instructions for credits to his account, then such instructions may be given to the DP. Otherwise, he will need to give a receipt instruction to his DP for receiving credits to his account.
Investor Accounts 