Ans. A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.

Ans. A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP. This is similar to opening an account with any branch of a bank in order to utilise the bank’s services. Suggestions on how to select a DP are given in Section IV.

Ans. The benefits of participation in a depository are:

• Immediate transfer of securities.
• No stamp duty on transfer of securities.
• Elimination of risks associated with physical certificates such as bad delivery, fake securities etc.
• Reduction in paperwork involved in transfer of securities.
• Reduction in transaction cost.
• Nomination facility.
• Change in address recorded with DP gets registered electronically with all companies.
• Transmission of securities is done by DP eliminating correspondence with companies.
• Convenient method of consolidation of folios/accounts.
• Holding investments in equity, debt instruments and Government securities in a single account.
• Automatic credit into demat account arising out of split, consolidation, merger etc.

Ans. CDSL offers the following facilities:

• Dematerialisation of securities.
• Rematerialisation of securities.
• Repurchase / redemption of Mutual Fund units.
• Electronic settlement of stock exchange trades.
• Pledging / hypothecation of securities.
• Electronic credit of securities in public issues.
• Receipt of bonus and other non-cash corporate benefits.
• Freezing of demat accounts.
• Nomination facility.
• Change of address services.
• Transmission of securities.
• SPEED-e Internet instruction facility.
• SPEED account monitoring facility.
• Holding debt instruments and stock lending facilities.

Ans. BSDA is like a regular demat account but with no or low annual maintenance charges.

Ans. Individual persons meeting the following conditions may avail the benefits of BSDA:

• Only one demat account as sole or first holder across depositories.
• Can be second or third holder in other demat accounts.
• Value of securities should not exceed ₹2,00,000.
• Mobile number and SMS alert facility are mandatory.

Ans. The annual maintenance charges (AMC) for BSDA as stipulated by SEBI are:

• No AMC if the value of holding is up to ₹50,000.
• If the value of holding is more than ₹50,000 but less than ₹2,00,000, AMC not exceeding ₹100 per year may be charged.
• For holdings exceeding ₹2,00,000, DP may charge AMC as per regular rates.
• The value of holdings is determined by the DP based on the daily closing price or NAV of securities or mutual fund units.
• If the value exceeds ₹2,00,000 on any day, regular account charges may apply from that day onwards.

Ans. Opening a demat account is simple. Approach a CDSL Depository Participant (DP), complete the account opening form, submit your PAN card, proof of address and bank account details.

After opening the account, the DP provides your DP ID, Client ID, Client Master Report, tariff sheet and Rights & Obligations document.

Verify all details in the Client Master Report. If you wish to buy or sell securities, you must also open a trading account with a SEBI registered stockbroker.

Ans. Selecting a DP is similar to selecting a bank. Consider:

• Convenience (location and business hours).
• Reputation and service quality.
• Charges and customer support.
• Availability of required services.

Ans. All DPs satisfy CDSL and SEBI eligibility requirements. However, service quality, facilities provided and charges may differ from one DP to another.

Ans. Visit your preferred Depository Participant and submit the account opening form along with:

• PAN Card (or other approved identity proof for eligible applicants).
• Address proof (Passport, Driving Licence, Voter ID, Aadhaar, NREGA Job Card etc.).
• Cancelled cheque, passbook or bank statement containing your account details.

Ans. In-person verification is mandatory as per SEBI guidelines. The DP verifies the applicant's identity by matching the photograph on the account opening form with the PAN card and the applicant appearing in person.

For joint accounts, all account holders must complete the in-person verification process.