New Delhi: Capital markets regulator Sebi on Wednesday proposed increasing the Basic Service Demat Account (BSDA) limit to Rs 10 lakh from the current Rs 2 lakh to promote participation of retail investors in the securities market.
A Basic Service Demat Account, or BSDA, is a more basic version of a regular Demat account. SEBI introduced this facility in 2012 to reduce the burden of demat charges on investors with small portfolios.
Currently, a person can hold debt securities up to Rs 2 lakh and securities other than debt securities up to Rs 2 lakh in the same demat account to be eligible for BSDA.
SEBI, in its consultation paper, said that a comprehensive review of the BDSA facility has been undertaken to further promote participation in the securities market and ease investment.The regulator proposed that the value of securities held in a demat account should not exceed Rs 10 lakh at any time, including debt and other than debt securities.
Listing the eligibility criteria, SEBI said that a person should have only one demat account where he is the sole or first holder and the person must hold only one BSDA in his name across all depositories.
Additionally, the regulator has proposed to review the maximum annual maintenance charge (AMC) for BSDA.
For portfolio values up to Rs 4, SEBI has proposed that the annual maintenance fee for BDSAs should be nil and for portfolio values above Rs 4 lakh and up to Rs 10 lakh, the fee should be Rs 100.
However, if the portfolio value is more than Rs 10 lakh then the BDSA should be automatically converted into a regular demat account.With regard to the services of BDSA, the regulator said electronic statements should be provided free of cost to such account holders, apart from this, a fee of Rs 25 per statement may be charged for physical statements.
The Securities and Exchange Board of India (SEBI) has sought comments on the proposal till June 26.
A Basic Service Demat Account, or BSDA, is a more basic version of a regular Demat account. SEBI introduced this facility in 2012 to reduce the burden of demat charges on investors with small portfolios.
Currently, a person can hold debt securities up to Rs 2 lakh and securities other than debt securities up to Rs 2 lakh in the same demat account to be eligible for BSDA.
SEBI, in its consultation paper, said that a comprehensive review of the BDSA facility has been undertaken to further promote participation in the securities market and ease investment.The regulator proposed that the value of securities held in a demat account should not exceed Rs 10 lakh at any time, including debt and other than debt securities.
Listing the eligibility criteria, SEBI said that a person should have only one demat account where he is the sole or first holder and the person must hold only one BSDA in his name across all depositories.
Additionally, the regulator has proposed to review the maximum annual maintenance charge (AMC) for BSDA.
For portfolio values up to Rs 4, SEBI has proposed that the annual maintenance fee for BDSAs should be nil and for portfolio values above Rs 4 lakh and up to Rs 10 lakh, the fee should be Rs 100.
However, if the portfolio value is more than Rs 10 lakh then the BDSA should be automatically converted into a regular demat account.With regard to the services of BDSA, the regulator said electronic statements should be provided free of cost to such account holders, apart from this, a fee of Rs 25 per statement may be charged for physical statements.
The Securities and Exchange Board of India (SEBI) has sought comments on the proposal till June 26.
