New Delhi: Zero Annual Maintenance Charge (AMC) demat accounts are those accounts in which retail investors can keep securities (both bonds and shares) up to a certain limit and are not required to pay any charges. Various discount brokerages like Zerodha, Upstox, Grow, etc allow small investors to open such accounts. Brokerages are allowed to open such accounts to expand the scope of financial inclusion in the country and encourage retail investors to open more and more demat accounts. But, the capital market regulator, Securities and Exchange Board of India (Sebi) has levied many conditions which a retail investor needs to follow to open a Zero AMC demat account.
Conditions to open Zero AMC Demat Account:
1. A retail investor can open only one zero AMC demat account.
2. Only one demat account should be registered against the investor’s PAN.
3. Value of securities held in such accounts should not exceed Rs 1.50 lakh at any given time in a period of three months from the time of opening of the account.
4. If within separate periods of three months, at any given time if the value of those securities go beyond Rs 1.50 lakh, then, the brokerage has all the right to levy AMC against the account.
How is Zero AMC Demat A/C securities value calculated?
According to Sebi’s rules and regulations, the brokerages should calculate the value of securities kept in such demat accounts on the basis of current prices of those securities. The value should not be calculated on the basis of the original price at which the investor had bought those securities. Therefore, one must consider the value of his holdings and not the amount invested to open such accounts.
Recently, Sebi proposed changes in the definition of demat accounts in the country. The market watchdog has proposed to increase the limit of value of securities kept in zero AMC demat accounts from current Rs 1.5 lakh to Rs 4 lakh. Upon implementation no broker will be allowed to levy any AMC on such demat accounts as long as securities’ value do not exceed Rs 4 lakh. This is in line with Government of India’s vision of widening of the scope of financial inclusion. It will also expedite demat account opening in the country.
Various discount brokerages like Zerodha, Upstox, Grow, etc allow small investors to open Zero AMC demat accounts in the country. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
