Mumbai, Jan. 28
THE Securities and Exchange Board of India has directed that from February 1, 2005 investors who open new demat accounts will not have to pay opening charges, other than statutory charges.
These new account holders will also not have to pay towards any custody charges for shares that are held in the demat account.
Existing demat accounts will have the provision of not paying custody charges from April 1, 2005, according to a SEBI circular.
Any purchase of shares, that are credited to demat accounts will not attract any fee, though selling the same would entail debit charges that are currently being levied.
Most depository participants currently charge Rs 100 for opening of accounts. However, since this is towards stamp paper and other legal costs, this charge is not expected to come down.
However, depository participants say that the annual cost of operating a demat account might come down by 10-40 per cent, depending on the nature of its usage.
SEBI expects this move to result in larger number of retail investors participating in the Indian markets.