New Delhi:
SEBI, the market regulator, has announced a significant update benefiting retail investors in the stock market.
Increase in Limit
SEBI has raised the limit of Basic Services Demat Accounts (BSDA) from Rs 2 lakh to Rs 10 lakh, a five-fold increase.
This adjustment aims to encourage greater participation from small investors.
Background and Implementation
The Basic Services Demat Account, introduced by SEBI in 2012, offers simplified services tailored for retail investors with smaller portfolios.
The recent circular from SEBI confirms speculations and states that the new limit will take effect from September 1, 2024.
Benefits to Investors
Previously restricted to holdings up to Rs 2 lakh, the enhanced limit allows BSDA holders to now maintain securities worth up to Rs 10 lakh.
This move is expected to reduce costs for small investors who engage in limited trading activities.
SEBI Guidelines and Impact
SEBI has mandated Depository Participants (DPs) to automatically convert eligible investors’ accounts to BSDA within two months,
unless otherwise requested by the investor.
BSDA accounts do not incur maintenance charges, making them a cost-effective option for retail investors.
This initiative by SEBI aims to simplify investment processes and broaden market access for small investors across India.
