A Six Point Guide To Opening A Demat AccountPosted by joshmeth on April 18th, 2017 1996 was the year when the Indian stock exchanges underwent a historic change. Post the Depository Act which came into effect that year, Indian stock markets adopted Demat Accounts for electronic storing of shares, bonds, and certificates. If you wish to trade in the share market, you should know the answer to the question; how to open a Demat Account? Why? Without this account, you cannot trade in the share markets. Here’s a short guide as to how you can open such an account. 1. Select Your DP Before you open a Demat Account, you need to approach a depository participant (DP). It acts as a link between you and the central depository. You can find details of registered DPs at the websites of India’s two depositories, the Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL). 2. Submit Your Documents Once you have decided upon a DP, approach them to open a Demat Account. They will ask you to fill out an account opening form and the Know Your Customer (KYC) form. Once you fill the forms, submit them to DP along with passport size photographs, your PAN Card, and address and identity proofs. 3. What are the documents you can submit? There are two documents you need to submit – identity proof and address proof.
4. Agreement During the account opening process, the DP will provide you with an agreement which carries the rules and regulations along with the duties and rights of investor and DP. Keep the copy of the agreement with you and do not lose it. 5. Verification When you have completed the form submission process and submitted all relevant documents, the DP will verify them. An in-person verification will take place where a representative of the DP will visit you to verify the details you have provided. 6. BO ID Once the DP completes the verification of your documents and approves it, you receive a BO ID. It stands for Beneficial Owner Identification Number. It has a total of 16 digits (eight digits belong to DP ID and eight digits belong to Client ID). You need to use the BO ID for all transactions and to access your Demat Account. These six pointers are what you need to know for opening a Demat Account. The process is simple and quick. All the best on your trading journey. Like it? Share it!More by this author |