SEBI issues new rules for opening trading, demat accounts from October, check details here

SEBI New Rules: If you invest in the stock market or thinking of it, then this news is for you. The stock market regulator SEBI has changed some rules regarding investment in the stock market from October 1.

New rules for demat account

According to the order issued by SEBI, investors who are opening new trading and demat accounts from October 1 will have the choice of providing nomination or opting out of nomination.

Though this will be only an option, trading account can be opened without being nominated. SEBI has released a format of nomination form. If an investor does not want to make a nomination while opening a demat and trading account, then he will have to give this information to SEBI.

Account will be frozen if

For this, you have to fill a 'Declaration Form'. If you have a demat account, then you will also be required to fill the nomination form by March 31, 2022. If you do not want the nomination facility, then you will have to fill a separate form for this.

Further, all existing eligible trading and demat account holders will have to provide choice of nomination by March 31, 2022, failing which the trading and demat accounts will be frozen, SEBI said.

Nomination and declaration form to be filled

According to the circular issued by the market regulator SEBI, under the new framework, trading members and depository participants will activate new trading and demat accounts from October 1, 2021, only upon receipt of such forms.

Account holders will have to sign the nomination and declaration form but no witness will be needed.

However, if the account holders are unable to sign and affix thumb impression, then the signature of the witness will be required in the form. The online nomination and declaration form may also be signed using e-sign facility and in that case witness will not be required.

Know the rules related to the nominee

Under the new rules, demat and trading account holders will be told to whom the shares of their account will be transferred if they die. Only that person will be made a nominee. This nomination is done only at the time of opening the demat account. If ever you want to change the name of the nominee, you can do so. You can also make an NRI as a nominee.

But remember that a maximum of three people can be nominated in a demat account. Nominee details can be filled in this. If two or more nominees have been appointed, the account holders will have to decide the share of all the nominees.