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How to open a Demat account in a minor's name? February 24 2021Demat account opening, how to open Demat account

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How to open a Demat account in a minor's name ?

In previous blogs we had discussed about the importance of holding a demat account in order to own shares. One must have a Demat account to buy any company's shares. This can be opened with the depository participant and shares are kept in paperless format. It is also possible to open a Demat account on behalf of a minor.

What Is The Procedure For Starting Investment As A Minor?

Only the natural guardian (parents) or court-appointed guardians may open the Demat accounts in the name of a minor child.

Forms

The guardian must fill out the standard Demat account opening forms. It may be appropriate to fill out two KYC forms, one for the guardian and one for the minor (to be filled and signed by the guardian).

To open demat account for minor following documents are required

The guardian has to provide the documentation needed and comply with KYC requirements. The date of birth of a minor, with proof, must be obligatory. The guardian and the minor’s PAN will need to be provided.


Reason for opening account

Before the account is issued, the reason for opening the Demat account in the name of the minor must be mentioned. There is a need to state this justification in writing. An email from the guardian is also recognised by most institutions as written evidence.

The Account Process

Only the guardian will run the demat account of the minor, before the minor becomes major. No trading account can be linked to the Demat account of a minor.

On becoming a major 

When the minor turns 18, the Demat account will become inoperative. After which, you need to open a new Demat account. It is possible to move the former holdings into a new account. You may proceed with the same account, but a new agreement with the depository participant must be signed by the minor.

Key takeaways:

·  Shares in the demat account of a minor are generally received by way of gifts. 

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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

Manoj Bhandari. Email: compliance@indiratrade.com. Call : 0731-4797275

Investors Grievance Email : complaint@indiratrade.com