The Securities and Exchange Board of India (Sebi) on June 5, 2024 proposed to increase the threshold limit of holdings in basic service dematerialised account from Rs 4 lakh to Rs 10 lakh.
At present, an individual can hold debt securities worth up to Rs 2 lakh and securities other than debt worth up to Rs 2 lakh in a single dematerialised account to be eligible for BSDA, a basic version of a regular dematerialised account. Accounts that exceed Rs 10 lakh in holdings will be automatically converted to a regular dematerialised account.
Sebi’s move to bring the threshold of holdings higher aims to reduce the cost of maintaining securities in dematerialised accounts for retail investors, and thus, widen the financial inclusion in the securities market.
“The facility for BSDA has been reviewed keeping in view the growth of benchmark indices in the previous decade and to further enhance the participation of retail investors in the securities market, including participation of investors holding securities in physical form,” the regulator said in the release. Further, Sebi sought public feedback on these proposals until June 26, 2024.
A BSDA is a dematerialised account, or a more basic version of a regular dematerialised account that keeps your securities as electronic records. Sebi’s proposal to raise the holdings limit in BSDA from Rs 4 lakh to Rs 10 lakh means that you can now invest more money with the lower fees of a BSDA.
It has also revised the fees structure for BSDA. At present, accounts that hold up to Rs 1 lakh in debt securities and Rs 50,000 in other-than-debt securities enjoy nil fees. This limit is revised according to a Sebi proposal and has no annual fees for accounts holding up to Rs Rs 4 lakh in securities. Accounts that hold securities between Rs 4 lakh and Rs 10 lakh will be charged a small annual fee of Rs 100.
BSDA is only eligible for individuals who have or propose to have only one dematerialised account across all depositories where they are the sole or first holder.
The DP by default shall open BSDA only for investors following these conditions unless they provide their consent by way of email to avail the facility of a regular dematerialised account. For those using BSDA, electronic statements are to be provided free of cost, but physical statements will be charged at Rs 25 per statement.
