InvestorQ : Is the compliance for Demat account and brokerage account same?
Sneha Balasubramanian made post

Is the compliance for Demat account and brokerage account same?

Answer
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Archita Jajjoo answered.
1 year ago


There can be similarities in compliance of both the accounts, but I won't say that the compliance is exactly the same, there are differences.

To open a Demat account- you need a SEBI registered broker who is a DP registered with NSDL or CDSL.
However, for a brokerage account, you do not need such approvals. Maintenance of Demat account requires payment of fixed Annual Maintenance Charges (AMC), while brokerage account does not necessarily require such payment.

Further, you can link both Demat account and brokerage account for better and efficient trading. These are the steps:
Step 1. At first, you are supposed to link your Demat account and brokerage account, with this hassle of providing Demat account details after every transaction, could be avoided.
Step 2. When linking is completed, you can make buy or sell order through your brokerage account.
Step 3. The order is then processed at the exchange. The details of transactions i.e., Market price, availability, etc are checked.
Step 4. Finally, your order is processed, and the shares/units are transferred to from/your account.

Thus, to conclude, a brokerage account is simply a link between a bank account and a Demat account. Hence, both have different compliance and procedures.