InvestorQ : I keep reading about free demat accounts. What are the demat charges involved?
Debbie Mascarenhas made post

I keep reading about free demat accounts. What are the demat charges involved?

Answer
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Mahima Roy answered.
2 years ago


Normally, when DPs talk about free demat accounts they are only talking about account opening charges. SEBI has rationalized the cost structure for dematerialization by removing account opening charges, transaction charges (for credit or buy transactions of securities), custody charges and account closing charges. Custody charges are now paid by the issuer companies directly to the depository. Broadly, investors will be required to pay the charges towards Dematerialisation and Rematerialization of their shares (i.e. when you convert to demat and back to physical form), annual account maintenance charges (AMC), transactions fees (only for sell/debit to DP transactions). The DP may revise the charges by giving 30 days notice in advance. Further, SEBI has also advised the DPs to submit to their Depository their tariff/charge structure every year latest by 30th April and changes made therein, along with the date of effect to enable the investors to have a comparative analysis of the tariff/charge structure of various DP’s. The information received by the depositories is put up on their websites which any investor can easily access.
In the event of the closing of demat account or shifting of demat account from one DP to another, the AMC collected upfront on an annual/half yearly basis by the DP, shall be refunded by the DP to the BO for the balance of the quarter/s. It will not be applicable to the DPs who collect quarterly / monthly AMC. SEBI has advised that from January 09, 2006, no charges shall be levied by a depository on DP and consequently, by a DP on a BO, when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, provided the BO Account/s at transferee DP and at transferor DP are identical in all respects. In case the BO Account at transferor DP is a joint account, the BO account at transferee DP should also be a joint account in the same sequence of ownership. All other transfer of securities consequent to the closure of the account, not fulfilling the above-stated criteria, would be treated like any other transaction and charged as per the schedule of charges agreed upon between the BO and the DP.