Sebi mandates brokers to frame their own policy for the treatment of accounts that don't witness transactions for a long period of time. Many investors are known to open demat accounts to convert old paper securities, or to invest in an IPO and not transact on them. Brokers may classify such accounts as dormat, and subject them to a new set of rules for operation.
Definition
Brokers may define a dormant account as one that hasn't had any buy or sell transaction for a fixed period, typically ranging from 11 months to five years, depending on the broker's policy. Dividend receipts or corporate actions in the account do not classify as a transaction.
Activity
Dormat accounts, in which securities are being held, can be misused by fraudulent people. Any debit (or sale) activity in such accounts will be treated by brokers as sensitive. They may have systems that ask for the authorisation of such transactions, or require re-activation of the account before a sale transaction can be carried out.
Reactivation
Reactivating a dormat trading account requires the client to apply in a specified format and complete KYC requirements. Some broking firms may also charge a nominal reactivation fee or maintenance fees. However, this is fairly uncommon, given that a re-activated account will generate a commission from transactions.
Maintenance
Brokers may ask clients to pay an annual maintenance fee to keep their account active. They may also notify clients on a periodic basis about the lack of transactions and the conversion of the account into a dormant account. If the agreement with the client allows it, brokers may also settle a dormant account for want of activity.
Reactivation of dormant trading accounts may take a couple of days.Familiarise yourself with your broker's policy to avoid disappointment when trying to transact after a long gap.
Online broking accounts that are linked to a bank account may have the facility to request reactivation or submit forms electronically to reactive an account.
Top 10 Tax Saver Mutual Funds to invest in India for 2016
Best 10 ELSS Mutual Funds in india for 2016
1. BNP Paribas Long Term Equity Fund
2. Axis Tax Saver Fund
3. Franklin India TaxShield
4. ICICI Prudential Long Term Equity Fund
5. IDFC Tax Advantage (ELSS) Fund
6. Birla Sun Life Tax Relief 96
7. DSP BlackRock Tax Saver Fund
8. Reliance Tax Saver (ELSS) Fund
9. Religare Tax Plan
10. Birla Sun Life Tax Plan
Invest in Best Performing 2016 Tax Saver Mutual Funds Online
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
---------------------------------------------
Leave your comment with mail ID and we will answer them
OR
You can write to us at
PrajnaCapital [at] Gmail [dot] Com
OR
Leave a missed Call on 94 8300 8300
-----------------------------------------------
Posts
No comments:
Post a Comment