InvestorQ : Is it mandatory for me to open a BO account to trade in the stock market?
Arusha Ray made post

Is it mandatory for me to open a BO account to trade in the stock market?

Answer
user profile image
Ria Roy answered.
2 years ago


As per the available statistics at BSE and NSE, 99.9% transactions take place in demat mode only. Therefore, in view of the convenience of trading in dematerialized mode, it is advisable to have a beneficial owner (BO) account for trading at the exchanges. Without a BO account with a DP, how do you hold shares and how do you buy/sell shares in the stock market? But what if you are holding physical shares? There are still a few ways available. To facilitate trading by small investors (maximum 500 shares, irrespective of their value) in the physical mode the stock exchanges provide an additional trading window, which gives one-time facility for small investors to sell physical shares which are in the compulsory demat list. The buyer of these shares has to demat such shares before further selling.
There are also informal buyers who will buy these physical shares from you but they will do it at a huge discount. Unless you are desperate it does not make sense to pay such a huge price. You can as well just dematerialize the shares and then sell them. The process is also quite simple these days, so don’t waste your time and money trying to sell physical shares. As well as dematerialize them and then sell the shares. Remember, 100% of all settlements in the market today happen in demat mode only.