Sebi eases account opening norms for individual investors

To make it easier for new individual investors, market regulator Sebi today announced a 'Saral' or simplified account opening form for such persons and eased the process for submitting address proof documents.
The move comes in the backdrop of the government and the regulator making efforts to attract new retail investors to the market especially for the disinvestment share sales through Offer For Sale (OFS) and other routes.
In a circular issued to all stock exchanges and various market intermediaries, the Sebi said: "A majority of new investors in the securities market begin with participation in the cash segment without obtaining various other facilities such as Internet trading, margin trading, derivative trading and use of power of attorney".

"The account opening process can be simplified for such individual investors. With a view to encourage their participation, it is, therefore, decided that such individual investors can open a trading account and demat account by filling up a simplified Account Opening Form (AOF) termed as 'SARAL AOF'..."
The new form will be available with the intermediaries and can also be downloaded from the websites of the exchanges and depositories.
The investors who open account through SARAL form will also have the option to obtain other facilities, whenever they require on furnishing of additional information.

The Sebi further said that for these individual investors, it has been decided to simplify the requirement of submission of 'proof of address'.

"Henceforth, individual investor may submit only one documentary proof of address (either residence/correspondence or permanent) while opening a trading account and/or demat account or while undergoing updation".
In case the proof of address furnished by the investor is not the address where the investor is currently residing, the intermediary may take a declaration of the residence or correspondence address on which all correspondence will be made by the intermediary with the investor.
"No proof is required to be submitted for such correspondence/residence address. In the event of change in this address due to relocation or any other reason, investor may intimate the new address for correspondence to the intermediary within two weeks of such a change.

"The residence/ correspondence address and any such change thereof may be verified by the intermediary through 'positive confirmation' such as acknowledgment of receipt Welcome Kit/ dispatch of contract notes/any periodical statement, telephonic conversation or visits, etc," the regulator said.