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Freezing and Unfreezing of Demat Account Explained June 04 2021Freezing and Unfreezing of demat account

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Keeping your demat account safe and secure is one of the most important aspects. After all, your demat account is for your stock holdings and long-term assets. When dealing with shares, both physically and electronically, you must comply to basic security standards. We''re all familiar with the process of opening and operating a demat account.

Another aspect of demat accounts which is known as the account''s freezing or unfreezing.

What does demat account freezing means?

Your demat account can be frozen in two ways. There is a regulatory freeze on your demat account as well as a voluntary freeze. Here''s how these two options work out.

Your demat account might face a regulatory freeze for a variety of reasons. For example, your account could have been inactive for more than three years with no transactions. In such instances, the DP will freeze your demat account in accordance with SEBI regulations. 

Alternatively, statutory authorities such as SEBI, RBI, Government of India, CBI, ED, and others might order the demat account to be frozen. Your demat account may also be frozen if you fail to provide statutory information, such as your Aadhar card, which is now necessary. These are all examples of regulatory freeze. When your demat account is frozen, you won''t be able to make any credit or debit transactions.

More significantly, there is something known as voluntary demat account freezing. Let''s imagine you''re going to abroad for a while and won''t be able to access your demat account. In that case, you might ask your broker to put your demat account on freeze mode until further notice.

During the freeze, all corporate activities such as dividends, bonuses, and splits will be delivered to you on time. However, no transactions are permitted in the demat account. You can also place several types of freezes on your demat account. You can place a general freeze on the demat account, which stops any credits or debits. You can also just stop debits from your demat account, which is the most common strategy used by most demat account holders. Finally, you can freeze specific ISIN numbers so that the block only applies to those shares and the others are available for trade.

If you are willing to get rid of the freeze, you can look up for a process called unfreezing.

What is unfreezing of demat account?

Unfreezing of demat account means lifting up the freeze from your respective account, whether it’s a voluntary freeze or regulatory freeze. By going through the KYC process again, you can unfreeze your demat account. This is made mandatory to safeguard your interests. The KYC procedure for reactivating your account is pretty straightforward. You just need to submit the required documents and identification proofs with the unfreezing form. 

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Prevent Unauthorized Transactions in your demat and trading account --> Update your Mobile Number/Email id with your Depository Participant and Stock Broker. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat/trading account directly from CDSL and Stock Exchanges on the same day.........issued in the interest of investors...

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.

2. Update your Mobile Number & Email Id with your Stock Broker/ Depository Participant and receive OTP directly from Depository on your Email Id and/ or Mobile Number to create pledge.

3. Pay 20% upfront margin of the transaction value to trade in cash market segment.

4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued by NSE vide. Circular No. NSE/INSP/45191 dated: July 31, 2020 and NSE/INSP/45534 and BSE vide Notice No. 20200731-7, dated: July 31, 2020 and 20200831- 45 dated: August 31, 2020 and dated: August 31, 2020 and other guidelines issued from time to time in this regard.

5. Check your Securities/ MF/ Bonds in the Consolidated Account Statement issued by NSDL/ CDSL every month.

"As per the directives of CDSL and esteemed Exchanges, it has been made mandatory for every client to furnish their latest KYC details viz. Valid Mobile No., Email- Id & Income range on or before 31.05.2021 else your Account will be marked as Non Compliant and will be Freezed till the compliance of such requirement."
REGISTRATION NOS:

INDIRA SECURITIES PVT.LTD. (SEBI REG.NO.):NSE TMID: 12866, BSE TMID: 663, CDSL DPID: 17000 SEBI REG. NO.: INZ000188930, MCX TM ID: 56470, NCDEX TM ID: 01277, CDSL REG. NO.: IN-DP-90-2015, CIN : U67120MH1996PTC160201
INDIRA COMMODITIES PVT. LTD. CIN : U65921MH1995PTC089399

DISCLAIMER:

"INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING."

INVESTORS GRIEVANCE

Jyoti Singh. Email: compliance@indiratrade.com. Call : 0731-4797275