1. What is a depository?
A depository is a firm or a company that holds investors' securities in electronic form. An investor cannot open an account directly with a depository but through a depository participant.
2. Which depositories are there in India?
India has only two depositories-National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL) out of which the former is the first depository to begin operations in India, whereas CDSL followed next. The services offered by both these depositories are similar and almost all traded companies listed with NSDL are also available with CDSL.
3. Who is a depository participant?
A depository appoints intermediaries or agents to offer demat services to investors. These are called Depository Participants (DPs). Investors open their accounts with DPs, who in turn opens the account with the depository. A DP maintains an investor's demat account and takes care of all transaction and holding requirements of investors. Emkay is a DP of CDSL.
4. Who is a Beneficiary Owner (BO)?
The investor who holds a demat account is a BO. In case of a joint account, the account holders will be beneficiary holders of that joint account.
5. What is a BO Id?
The demat account number of the beneficiary holder(s) is known as the BO Id.
6. What is a DP Id?
A DP Id is the number of the depository participant allotted by the depository.
7. Why open a demat account?
At present, almost all stocks are traded in the dematerialized form, hence it is necessary that you have a demat account in order to buy and sell stocks. Over and above this, there are many advantages of having a demat account such as no bad deliveries, no risk of loss, mutilation or theft of share certificates, no stamp duty for transfer of shares, reduced paper work, fast settlement etc.
8. Can an investor open only a Demat account with Emkay without having to open a Trading Account?
Emkay has a commercial policy as per which, only those investors who have a trading relationship with Emkay can open a demat account. Therefore, new clients have to open both, demat and trading accounts together under a single form for opening a demat account.
9. Can a minor open a demat account with Emkay?
In view of the commercial policy of Emkay and incapability of a minor to enter into a contract, Emkay does not accept the application of minors.
10. Can a client open multiple demat accounts?
A client can open multiple accounts provided he cites valid reasons for opening of such account, but discretion is entirely with the DP.
11. Is submission of Pan mandatory while opening a demat account? Yes, provision of Pan is compulsory for all individuals, including a minor, housewife or NRI.
12. If a prospective client loses his PAN card and is in the process of obtaining a duplicate one, can he open an account with a mere provision of the Pan card number only?
No, copy of the Pan card is mandatory.
13. What additional documents are required for a NRI account?
The following documents are required - copy of valid passport, foreign address proof, declaration for complying with FEMA, bank statement indicating the nature of account and in person verification done by appropriate foreign authority or by a DP staff at the branch.
14. Can a client change his name or status in a demat account?
No, correction in name and status of the client is not allowed in a demat account once it is opened. The only option is to close the old account and open a fresh account with a revised name and status.
15. What is the procedure for changing address, bank details, email id, phone numbers in a demat account?
The client needs to submit an account modification form along with a proof.
16. Who can appoint nominees and is it compulsory?
Yes, it is mandatory for the DP to obtain nomination form from a non corporate account holder (s) (individual/ NRI/Foreign National categories), duly filled and signed by all holders. If the account holder does not want to nominate anyone, such a holder should select the option "I/WE DO NOT WISH TO NOMINATE" in the nomination form.
17. Will the benefits of account devolve on the nominee in case of death of the holder?
In case of death of sole holder, the benefits of the account automatically devolve on the nominee; however in case of joint account, the benefits will pass on to the joint holder first. But the claimant has to undergo transmission procedure for claiming benefits as legal heir.
18. Can a minor be a nominee?
Yes.
19. What is the procedure for dematerialization of physical shares to a demat account?
The client has to lodge his physical shares along with a Demat Request Form (DRF). DRF is available with all branches /franchisees of EMKAY.
20. Is it permissible to convert electronic holding into physical holding?
Yes, it is allowed, and the process is known as rematerialistion of shares. The client can apply for remat of shares through a Remat Request Form (RRF), the format of which is available with all branches and franchisees of EMKAY.
21. What is the difference between EASI and EASIEST facilities? How to register for them?
EASI and EASIEST facilities are provided by CDSL and not by Emkay; however, to register for such facilities the client needs to open an account with EMKAY and register the same through EMKAY with CDSL.
Through EASI the client can only view the holding status of his demat account whereas with EASIEST, the client can transfer his shares for pay in or otherwise but only to the trust account selected by him. The trust account may be the pool accounts of the broker through whom he is trading.
22. If a client has physical shares in the names A and B whereas his account is in the reverse order of B and A, can he apply for dematerialization of shares to DP of EMKAY?
He can, provided he executes a Transposition form and lodges the same with physical shares and DRF.
23. Can a client pledge his shares lying in his demat account?
Yes, but both, the pledgor and pledgee should have their account with same depository (in our case it is CDSL) only.
24. What is the difference between off market and inter-depository transactions?
Off market means transfer of shares from one account to another account where both the accounts are with the same depository (CDSL) whereas in case of inter-depository transactions, the accounts are with different depositories, i.e., CDSL and NSDL.
25. Is it compulsory to execute Power of Attorney (PoA) in favour of the broker?
It is not compulsory but POA will obviate the need to give any Delivery Instruction Slips (DIS) for all on market transactions.
26. Is it necessary to give DIS for off market and inter depository if client has already given POA?
Yes, since the POA is valid only for on market transactions.
27. What is fax indemnity?
If a client is not able to send the original DIS, he can send a fax copy of the instructions and later he can forward the original by courier, but for that he has to execute a fax indemnity.
28. What precautions need to be taken while forwarding DRFs?
For each ISIN, a separate DRF is to be used. Moreover, certificate numbers, distinctive numbers and number of shares should be correctly written and the same should tally with physical certificates attached with the DRF. The client should sign at two places, i.e., 'Signature with DP' and 'Signature with RTA'. The DRF should have the correct BO id of the client.
29. What is a declaration for off market and why it has to be given?
As per CDSL, a client needs to give a valid reason if he is transferring his shares without consideration, in a prescribed form of declaration. However, this declaration is applicable only in case of old format of DIS. The new format of DIS is duly incorporated with such declaration.
30. What is Smart Facility?
SMART stands for SMS Alerts Related to Transactions, in which investors registered with DP will receive alerts for all types of debits, subject to a maximum of four debits in a day, as well as for credits due to IPO allotments and corporate actions.