InvestorQ : My broker insists on having the DP account also at the same place. Is it mandatory?
Aditi Sharma made post

My broker insists on having the DP account also at the same place. Is it mandatory?

Answer
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Arti Chavan answered.
2 years ago


It is not mandatory, but it is advisable in your own interest. To answer your question, as an investor you can choose any DP as per your convenience or choice and carry on trading activity through a broker of your choice, irrespective of the DP of a broker. There are times when the broker may not have a DP license and they may ask you to link with another trading account. Alternatively, the broker may be having a DP but you may prefer to continue with your existing DP account. It is absolutely fine but you just need to be aware of a small practical problem that could arise in the case of having your DP and trading account at different places.
The actual problem arises when you have to sell the shares. Normally, you need to sign the debit instruction slip (DIS) and lodge it with your broker. Then your broker contacts your DP and gets it approved. If there is any slip up in the entire process you may end up selling shares without giving delivery. That is because; your delivery has to be given by next day morning at 11 am. If that is not done, then it can result in a short delivery and will go into action. Even though your broker collects from the DP, the responsibility and onus are still on you only. In the case of online trading, it is much easier to link if the DP and trading account are with the same entity. So the idea here is that if you have the DP account and the trading account with the same broker then it is just more convenient for you. That is all! But, yes there is no compulsion to open a trading account and demat at the same place.