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Can you open a Demat account without a KYC process

For a very long time, trading in financial markets remained cumbersome and exclusive, with only insiders and veterans having access to markets. This changed with the advent of technology – specifically, the introduction of online trading. With online trading, the markets opened to the general populace, eliminating the need for physical certification and endless paperwork. Online trading has also empowered investors to undertake transactions from any location, at any time, and Demat accounts have added an extra layer of security and protection.

What is a Demat account?

A Demat account is an online trading account through which you can hold shares and securities electronically. The term 'Demat' is short for 'dematerialization.' It refers to the process by which your shares and other securities invested are converted from their physical format to an electronic one.

With the advent of Demat accounts, you as a trader can seamlessly invest in financial instruments and securities across the market safely and securely. In addition, you can link these accounts to your trading and bank accounts as well.

Why is a Demat account necessary?

Today, possessing a Demat account is mandatory if you wish to trade in securities like shares. Demat accounts are essential for traders for several reasons – (a) ensuring utmost safety and security, preventing any form of threat and misuse (b) can be integrated with your trading and bank accounts, thus easing the process of investing in financial markets and (c) being stored digitally, they help you access the markets from any location and at any time, ensuring greater accessibility as well as transparency.

Can one open a Demat account without a KYC process?

As per a SEBI mandate issued in 2021, you must necessarily undertake a KYC process to open a Demat account. Therefore, it is essential to upload the trader's name, address, mobile number, email ID, income range, and PAN card. While there exists a range of documents one can upload as proof of identity, the only essentially mandatory document is your PAN card.

Step-by-step guide on opening a Demat account online

The following steps must be followed when opening a Demat account:

Choose your Depository Participant (DP) – a bank, financial institution, or broker – and visit their website.
From the menu, select the 'Open Demat Account' drop-down.
Enter the requested details – name, address, mobile number, email ID, income range, and PAN card.
Enter the OTP received and submit your application.
Once verified, your application will be processed by your DP.

Conclusion

Investing in securities is a suitable format for portfolio diversification and can help you reap long-term rewards. We at Motilal Oswal are here to assist you with any such needs and help you set up your Demat account today.