All existing instruments in e-form by September 30; move to affect 200,000 companies
It might be a cheaper option, but lack of clarity is choking its growth
The move will help to curb fraudulent borrowing and trading
'If gold's recent surge has increased its allocation beyond 15 per cent in your portfolio, now may be a good time to rebalance.'
In its bid to woo more investors to the capital market, the Securities and Exchange Board of India on Friday said that no charge should be levied on opening of a demat account except statutory charges effective from February 1.
Leading brokers are expected to increase brokerage rates in the coming weeks, as they navigate a series of regulatory changes that are expected to squeeze profitability. According to industry sources, top brokers may soon begin charging for equity trades and raise the flat fees for intra-day and derivatives trading by 10-30 per cent. Several smaller players have already hiked their brokerage charges, signalling a potential end to the zero-brokerage era that has drawn millions of new investors into the stock market and fuelled active trading.
rediffGURU Vivek Lala answers your income tax and personal finance queries.
The Securities Appellate Tribunal on Monday dismissed Karvy Consultants' appeal against the Sebi order barring it from opening fresh demat accounts.
Apart from the emotional value attached to buying gold, the yellow metal offers protection against inflation, interest rate spikes, currency and geopolitical risks, says Anamika Pareek.
Reliance Mutual Fund and UTI Mutual Fund have applied to Sebi to start schemes that will collect money directly from investors and buy units in Gold Exchange Traded Funds. Though at a slightly high cost, these schemes take away the hassle of maintaining demat and trading accounts with brokers. "These two factors were the biggest hindrance for gold ETFs," said Devendra Nevgi, ex-CIO, Quantum Asset Management. Nevgi started the gold ETF at the fund house.
The government is considering bringing in legislation to forfeit the Rs 8,804 crore (Rs 88.04 billion) in frozen demat accounts, Finance Minister Pranab Mukherjee said.
For the third month running, investors opened over four million new demat accounts in February, showing growing household confidence in stock markets and their increased risk appetite. Over 13.12 million new demat accounts have been opened in the last three months, taking the total count close to the 150-million mark. Demat accounts are needed for trading and holding shares electronically.
With the deadline for furnishing details of permanent account number lapsing on December 31, a quarter of the 98.5 lakh (9.85 million) demat accounts will be frozen from January 1.
When shares in the electronic form are available with the depositories, it acts as primary evidence for those who hold the shares.
Sebi directs all depository participants to provide basic services demat account
Market experts said on an average around 80,000 accounts were opened every month during 2008-09 as against 0.3 million accounts monthly in 2007-2008. "Investors are closing their accounts as brokerage houses have started levying annual maintenance charges. Even the depositories have increased their transaction fees. We currently open about 25,000 accounts on an average per month as compared to over 40,000 accounts during 2007-08," said an official at a large securities house.
To invest in the stock market and buy equity, you need three things
The income tax department will recommend de-freezing of about 100 demat accounts after it found the claims of a few individuals in the frozen accounts to be genuine.
In fact, almost every fourth demat account with NSDL and CDSL is now frozen. Investors were required to provide PAN card details for opening demat accounts from April 2006.
Uncertainty in equity markets and a waning investor response have led to a slowdown in new demat accounts, a key gauge of retail investors' sentiment towards the market. Sluggishness in the primary market has added to the woes as a large number of investors generally tap equity markets through IPOs.
The country's largest coal producer Coal India on Thursday said it will facilitate opening of demat accounts for its 4 lakh employees to ensure their participation in the upcoming public issue which is likely to fetch around Rs 12,000 crore (Rs 120 billion) to the government.
Rejecting the Opposition demand for a JPC probe into demat share scam, the Government Tuesday said SEBI was examining the matter and strictest possible action would be taken against those involved in the irregularities.
'To be able to sail through such volatilities, it is prudent to focus on quality.'
Sebi directs freezing of all demat accounts not linked to Aadhaar by December 31
The department has now sent the reports of such accounts to the respective chief commissioners of Income Tax in various parts of the country to check the veracity of such accounts in their regions. More than 6,50,000 frozen demat accounts were taken under scanner and investigated by the Income Tax department in December last year on the suspicion of huge evasion of taxes and benami transactions.
Union Finance Minister Nirmala Sitharaman on Tuesday commended Indian financial sector regulators for doing a "world-class job" and bringing greater transparency into the system. Underlining that she is not against questioning or critiquing regulators, Sitharaman said there is a need to be "extremely conscious" about contributions made by them as well. Speaking at the Financial Express Best Banks Awards, the finance minister said, "I strongly recommend that facts are taken on board before we discuss anything to do with the regulators, strictly speaking."
Demat of TDS certificates is likely to be deferred by a year or at least six months.
HDFC Bank had opened multiple demand accounts which were used for manipulation of the IPO allotment process in the last few years, but those were not held in benami names.
In a reprieve for HDFC Bank, Securities and Exchange Board of India on Thursday allowed the bank to open new demat accounts saying there was no need to continue its earlier directions that barred the bank from opening new accounts.
New investors should gradually build a 5 to 10 per cent allocation to gold.
The e-filing website of the I-T department would now provide a facility to pre-validate bank account details.
Economic growth, which we are taking for granted, slows for a completely different set of local or global factors and the Modi premium vanishes, observes Debashis Basu.
Like dematerialisation of securities, it will offer dual benefits of cost-effectiveness and convenience.
