Mumbai, Nov. 9
AN investor in the share market with demat account with one depository participant (DP) and wishing to shift the account to another DP will soon be able to do so without paying any transaction fee.
The Securities and Exchange Board of India said on Wednesday that no charges shall be levied by a depository on a DP and consequently, by a DP on a beneficiary owner (BO). Thus, when a BO transfers all the securities lying in his account to another branch of the same DP or to another DP of the same depository or another depository, it will be free of cost, provided the BO accounts at transferee DP and at transferor DP are one and the same to the extent that they are identical.
SEBI said it has observed that depositories and depository participants have been levying transaction charges for such transfer of securities. This, though no account closure charges are levied by the depositories or depository participants.
In other words, an investor, who is not satisfied with the services of a DP, can move his account to another DP, only at a cost. SEBI has decided that investors needed to be freed of this cost.
In case the account at transferor DP is a joint account, the account at transferee DP should also be a joint account in the same sequence of ownership, SEBI said.
The notification has advised depositories/DPs to put in place necessary systems and procedures to differentiate between an account closure transaction and a normal debit transaction on or before January 8, 2006 so as to avoid any problems in the live environment and ensure smooth implementation of the aforesaid decision.