Sebi harmonises account opening process for trading, demat

Depository participant required to provide copy of new document to beneficial owner

Making it simpler for investors to enter the capital market, Sebi today harmonised the account opening process for trading and demat accounts and also reduced the number of investor signatures required on forms.

Besides, the existing Beneficial Owner-Depository Participant Agreements would be replaced with a simpler and a common document titled 'Rights and Obligations of the Beneficial Owner and Depository Participant,' the Securities and Exchange Board of India (Sebi) said in a circular.

"This will harmonise the account opening process for trading as well as demat account. This will also rationalise the number of signatures by the investor, which he is required to affix at present on a number of pages," it said.

The depository participant is required to provide a copy of the new document to the beneficial owner and take an acknowledgement of the same.

The decision was taken in consultation with associations of stock brokers and both the depositories -- CDSL and NSDL -- and depository participants.

The new document would be mandatory and binding on all the existing and new clients and depository participants. Also, Sebi has directed depository participants to bring the new norms to the notice of the depository participants and disseminate the same on their websites.

They are directed to take necessary steps to implement these norms immediately and ensure its full compliance in respect of all new clients within three months from the date of this circular, it said.

It has also advised the depository participants to intimate their clients the modified provisions of the rights and obligations document, replacing the existing beneficial owner-depository participant agreements.