InvestorQ : What are some of the procedural issues I need to keep I mind when opening the demat account?
Dia Deshpande made post

What are some of the procedural issues I need to keep I mind when opening the demat account?

Ria Jain answered.
3 years ago

Firstly, obtain and personally submit the duly completed account opening form. Provide to DP a copy of your PAN card along with a copy of your passport or driving license or voter-ID card or ration card or Aadhar card as your proof of address. If you are already registered with a KRA, you are not required to submit PAN card and proof of address again. In addition, these are the additional things you need to take care of.

· Obtain the Rights and Obligations document

· Obtain your unique account number (BO-ID) from your DP

· Obtain pre-printed Delivery Instruction slips for effecting delivery of securities

· Understand the cut-off timings from DP for depositing delivery instructions for trades done by you on the stock exchange.

Minimum Account Balance

There is no requirement of holding minimum-security balance in a demat account; you can maintain zero balance in your account. Ready availability of account enhances your transaction making ability.


Individuals holding beneficiary (demat) accounts either singly or jointly, have the facility of making nomination. The facility of appointing multiple nominees is available (Non-individuals including societies, trusts, body corporate, partnership firms, kartas of HUF, holders of power of attorney however, cannot nominate). If the sole or all the joint holders are deceased, the shares will be transmitted in the name of the nominee. It may be noted that in the event of the death of one of the joint holders, the securities will be transmitted in the names of the surviving holders.

Statement of Account of transactions and holdings:

A periodical statement of holdings and transactions is provided by DP. The same can also be downloaded through CDSL internet facility by registered users. You may click on easi link for obtaining more information about the CDSL internet facility – easi and easiest.

Credit Confirmation

In order to receive all the credits coming to demat account automatically, a one time standing instruction can be given to the DP at the time of opening your account. Otherwise, a receipt instruction has to be given to the DP every time credit is expected in the demat account.

Number of Accounts

Though there is no restriction on number of demat accounts that can be opened by a beneficial owner, the DPs will exercise due diligence before opening such accounts. In case it is a Basic Services Demat Account (BSDA) for demat values of under Rs.2 lakhs, then you can only have one DP account across all the DPs mapped to your PAN card.

Change of Address

For any change of address, if any, communication to your DP in writing along with supporting proof of address documents is sufficient. The DP will ensure that the change is incorporated for all securities held in your demat account. You need not write to all the companies separately. Nowadays, banks also insist on proof s of existence at the location like electricity bill in your name or with link documents, landline telephone bill, water bill, society maintenance receipts etc.

The Depository Participant (DP) is the link between the investors, the company and CDSL and provides the following services.

Account Opening

To utilise the services offered by a depository, any person having investment in any security or intending to invest in securities needs to have a demat account with a CDSL-DP. The holder of such demat account is called as "Beneficial Owner (BO)". A BO can maintain a demat account with zero balance in such account. A BO can open more than one account with the same or multiple DPs, in the same name/s and order, if he/she desires so. The investor can approach any DP/s of his/her choice to open a demat account. A DP account these days can be operated online and hence geographic location of the DP is not too critical.


Dematerialisation is a process by which physical certificates (of shares / debentures / other securities) are converted into electronic balances. A BO has to submit the request for dematerialisation by submitting the demat request form (DRF) duly completed along with the concerned physical certificates, to his/her DP. The form has to be complete and valid in all respects before it can be accepted.

Processing Delivery & Receipt Instructions

To settle trades done on a stock exchange (on-market trades) and trades which are directly settled between two BOs (off-market trades), BOs submit duly completed delivery instructions in the prescribed form to DP. For receipt of securities into his/her account, a BO can give one time "standing instruction" to DP. Once such a standing instruction is given to the DP, there is no need to submit separate instructions for receipt every time the investor buys securities.

Account Statement

Generally a DP sends to the BO, a statement of his account, monthly, if there is any transaction in the account or every half year if the account is not operated during that period.


Re-materialisation is the process by which the electronic balances held in the demat account can be converted back into physical certificates.


If the BO decides to pledge any securities in his BO account, he can do so by submitting the pledge creation form duly completed, to his DP.

Transmission of securities

CDSL offers a facility for transmission of balances held in BO account/s (to other BO account/s) if so required due to death, lunacy, bankruptcy, insolvency or required due to operation of any law. The process of transmission through the depository is simple and quick as the successor has to interact only with his DP.


Individual BOs have a facility for nomination in favour of an individual(s) Facility of multiple nomination is available. If the sole or all the joint holders are deceased, the shares of different companies held in the demat account will be transmitted easily to the demat account of the nominee on submission of the death certificate and transmission form.

It may be noted that in the event of the death of one of the joint holders, the securities will be transmitted in the demat account of the surviving holders. .

Change in Address

A BO who wishes to register his change in address submits his/her request in writing to his/her DP along with supporting proof of address documents. The changes entered by the DP in the CDSL system will be automatically downloaded to all the companies in which the BO is holding securities. This facility offered by CDSL saves money, time and effort for the BO.

Bank Account Details

A BO has to mandatorily submit bank account details along with details of IFSC and MICR duly supported by documentary evidence like copy of cheque. SEBI has made it mandatory for companies to print details of bank account of the BO on dividend/interest warrants etc. to prevent possibilities of misuse of the warrants. All BOs should submit a request in writing to the DP if they wish to record / change their bank account details. If the BO opts for ECS facility and such facility is available with the BO’s bank, the dividend / interest will get credited directly to his bank account.