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SEBI increases the Basic Services Demat Account (BSDA) threshold to ₹10 lakh, aiming to enhance small investor engagement in the securities market. Read more on the changes and impact.
Key Points
- Sebi has raised the threshold for Basic Services Demat Account (BSDA) from ₹2 lakh to ₹10 lakh.
- The new guidelines will take effect from September 1, as per Sebi’s circular.
- The objective is to encourage greater participation of small investors in the securities market and enhance financial inclusion.
- Eligibility criteria include having only one demat account, holding only one BSDA across all depositories, and maintaining securities valued under ₹10 lakh.
- Fees for BSDA: No annual maintenance charges for portfolios up to ₹4 lakh; ₹100 charges for portfolios between ₹4 lakh and ₹10 lakh. Above ₹10 lakh, BSDA converts to a regular demat account.
- BSDA holders receive free electronic statements; physical statements are charged at ₹25 each.
In a move to bolster the involvement of small investors in the securities market, the Securities and Exchange Board of India (SEBI) has announced an increase in the threshold for the Basic Services Demat Account (BSDA) from ₹2 lakh to ₹10 lakh. Effective from September 1, these revised guidelines aim to promote financial inclusion and ease the burden of demat charges on investors with modest portfolios.
BSDA serves as a simplified version of a regular demat account, initially introduced by SEBI in 2012. It aims to provide cost-effective access to the stock market for investors holding securities below a specified value. Under the new rules, an individual can qualify for a BSDA if they meet specific criteria: holding only one demat account as the sole or first holder, maintaining only one BSDA across all depositories, and ensuring that the combined value of securities (both debt and non-debt) does not exceed ₹10 lakh at any time.
Previously, BSDA eligibility limits were capped at ₹2 lakh for debt and non-debt securities in a single demat account. Now, SEBI has structured fee waivers for BSDA holders based on portfolio values: accounts holding up to ₹4 lakh incur no annual maintenance charges, while those with portfolios between ₹4 lakh and ₹10 lakh are subject to a nominal fee of ₹100. If a portfolio exceeds ₹10 lakh, the account will automatically convert to a regular demat account.
Key services under BSDA include free electronic statements, with physical statements available at a charge of ₹25 per statement, as per SEBI’s circular. Depository Participants (DPs) are mandated to convert eligible demat accounts to BSDA unless account holders opt for a regular demat account via email. This transition process must be completed within two months, with ongoing reviews conducted at each billing cycle.
Earlier, SEBI initiated a consultation paper on enhancing BSDA’s threshold limits, reflecting ongoing efforts to streamline demat account regulations and encourage broader participation in India’s evolving securities landscape.
