Under the proposal for a fresh framework of demat account opening and trading for investors, the Securities and Exchange Board of India (SEBI) has mandated that all investors must provide a nomination in their demat and trading accounts.
New rules and regulations will apply to investors and to depository participants, plus members of the trading world, where demat account opening is concerned. Effective 1 October, 2021, depository participants began to activate fresh demat and trading accounts only if investors who applied for these provided nominations in these accounts. Besides this, SEBI has clearly stated that each eligible demat and trading account holder must make available a nomination choice by 31 March, 2022. In case the account holder fails to provide this information by the stipulated date, the demat and trading accounts in question will be frozen by SEBI. It is easy to open a demat account with any expository participant, and typically, your bank will offer you a choice to open a free demat account. However, you must now, according to the new regulations, submit a form with a chosen nominee for the account.
In the modern digital age, all trading, and financial transactions thereof, is conducted online. At reputable brokerages such as Motilal Oswal, for instance, you can hold an online demat account and trade online too. Now, however, account holders have to provide a nomination form to the depository participant, the bank or a broker, to get demat and trading accounts activated. With the new set of rules in action by SEBI, these nomination forms may be physically accepted by your banks and brokers with the relevant signatures. There is, nonetheless, no witness required while forms are being signed. However, if the applicant is affixing a thumb impression, the requirement of a witness's signature is mandatory in the applicable forms to be submitted. The procedure for opening a demat account online will still be in use, and in such cases, you may provide an e-signature.
To open new demat account, previously, account holders did not have to provide any nominee for the given account. This was true for trading accounts as well. Since, in most cases, demat accounts and trading accounts are bundled together typically, with the new rules in action by SEBI, account holders may provide a nomination form when they open their new demat accounts, and these will be applicable to linked trading accounts too. Having a nomination for your demat and trading account only ensures more safety.
If you wish to open a new trading account which is connected to a demat account, you can do so with ace broker, Motilal Oswal. Here, you get a convenient user-interface and procedures that take all the new regulations for investors into consideration.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account