No-frills demat to save charges for 50% of Investors-SEBI
With the new no-frills account 50% of demat holders will have zero maintenance charges and another 10% will pay very small maintenance charges, says the SEBI chief
Mumbai: The decision to introduce no- frills demat accounts as part of a new initiative will benefit 50% of investors as they don't have to pay any account maintenance charges, the chief of the capital market regulator said, reports PTI.
Also around 10% of investors will pay minimal charges under the new norms, Securities and Exchange Board of India (SEBI) Chairman UK Sinha said.
"By that one simple decision (regarding basic service demat account), about 60% of demat holders will be benefitted. Fifty percent of demat holders will have zero maintenance charges and another 10% will pay very small maintenance charges," he said at the launch of know your customer (KYC) Registration Agency (KRA) services by CAMSKRA.
CAMSKRA is a wholly-owned subsidiary of Computer Age Management Services Pvt Ltd (CAMS) and provides services on transaction processing and customer care services to the mutual fund industry.
SEBI had not forced anything on the service providers by taking such a step and they, along with investor community, would continue to grow due to this measure, he said.
With an aim to encourage an investment culture in the country, SEBI recently announced no-frills, or basic trading accounts, for retail individual investors with no charges applicable for holdings up to Rs50,000.
Investors can hold securities worth up to Rs2 lakh in these accounts, to be called Basic Services Demat Account (BSDA), but the charges would be capped at a maximum of Rs100 a year for funds exceeding Rs50,000.
The market regulator recently came up with a slew of measures to promote investment through IPO and mutual fund in its bid to reach out to more investors.
Referring to the proposal to enable investors use credit and debit cards, ATMs and mobile banking facilities for making payments in initial public offers (IPOs), Sinha said it would need some consultations with the RBI.
"This is something which needs consultation with RBI as they are the banking regulator. We have already taken steps like e-IPO for simplifying the IPO process. This (use of debit or credit in IPO process) is the next step," Sinha said.
He said common KYC norm for all financial products is on the card. "SEBI has initiated a dialogue with all regulators in this regard and Government has set up a committee to look into how a single KYC is going to help all financial products. I believe some more areas have to be covered ...It might take some more time. But, fundamentally, we are moving in that direction."
Sinha said challenge before the regulators is to cover maximum number of people under this common KYC norm. He said significant improvement had been made in the KYC space with registration of 1.25 crore people in last eight months alone.
The regulator was also hopeful of getting Government approval to access call data records for investigation into alleged market irregularities.
"Request for call data record is being considered by the Government. It requires a lot of consultations among Ministries... it will happen but will take some time."
SEBI has sought the Government permission to access call data records of people under scanner for their role in alleged manipulative activities, especially for insider trading, to put across a strong case against such entities.
Sinha said market irregularities had been hugely curtailed in the recent time and SEBI is investigating into the crash of mid-cap stocks on 26th July.
"Whatever sources of information we have, we are following each and every company..our effort is that those who commit any sort of misconduct in the market do not get unpunished."
He, however, added, "There has been a marked reduction in the propensity to manipulate the market. But this game is never over...However, it has been vastly curtailed and SEBI has to remain very alert on this."
Source :MLF
Best Regards
Prakash Nair
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