Demat account is used by individual for trading shares and commodities etc. for online trading in stock exchange with compliance the rules and regulations.
Opening up a Demat account requires the following:
• Duly filled account opening form.
• An agreement is to be signed with the DP (Depository Participant).
• Identity Proof.
• Address Proof.
Identity and Address proof may include the following:
• Work Permit copy.
• Attested copy of account details.
• Passport photocopy.
• PAN card photocopy.
• Voter ID photocopy etc.
The registered Depository Participants are listed on the websites of NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). Opening up a Demat account with the DPs is not free. They incur a cost and the owner has to abide by the rules and regulations of the DP and also the other compliance bodies like the SEBI (Securities and Exchange Board of India).
There are however, certain bans which provide free Demat account for the owners of the banking accounts. These Demat accounts are integrated with the bank accounts of the owners for easy trading. These Demat or trading accounts can be opened by Indians (either residents or non-residents).
There are some charges which are related to the bank account of the owners and generally the Demat account is kept out of the charges.
A person willing to trade can actually go ahead and place a buy or sell order and the bank’s trading system will check the availability of the funds and the number of shares in the Demat account and execute the trade.