Sebi offers simple process for opening of trading & demat a/c

The capital markets regulator, Securities and Exchange Board of India (Sebi), has simplified the rules for opening of trading and demat accounts by resident individual investors, to boost retail participation in the securities market.

It has introduced the concept of a ‘Saral (Simple) Account’, with much more relaxed Know Your Customer requirements as compared to a normal demat account. Such accounts are primarily aimed at investors who only participate in the cash market, without availing other facilities like internet, mobile banking or margin and derivative trading.

A Saral Account (‘simplified one-page account’) will enable opening of trading and demat accounts with only one documentary proof. If the individual investor is residing at a different address than that mentioned in the documentary proof, one will only have to provide a declaration of the address on which correspondence has to be made.

The government is pushing for higher participation of retail investors in disinvestment programmes, where the it has set aggressive targets for the current and the next financial year.

“I have requested the finance secretary and the department of economic affairs to open more demat accounts and launch a drive for financial literacy. With all kinds of papers expected to hit the markets this year,  retail investors should not lose on the opportunity,” Disinvestment Secretary Aradhana Johri had said in an earlier interview with Business Standard.

The demat account penetration is less than two per cent. A complex and lengthy account opening process is considered a lacuna in drawing new investors towards the securities market.