What is a depository?
A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.
How can I avail the service of a depository?
A depository interfaces with the investors through its agents called Depository Participants (DPs) like MADHUVAN. If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP. This is similar to opening an account with any branch of a bank in order to utilize the bank's services.
What are the benefits of participation in a depository like Madhuvan depository?
The benefits of participation in a depository are:
· Immediate transfer of securities;
· No stamp duty on transfer of securities;
· Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.;
· Reduction in paperwork involved in transfer of securities;
· Reduction in transaction cost;
· Nomination facility;
· Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately;
· Transmission of securities is done by DP eliminating correspondence with companies;
· Convenient method of consolidation of folios/accounts;
· Holding investments in equity, debt instruments and Government securities in a single account;
· Automatic credit into demat account, of shares, arising out of IPO/Rights/Bonus/ split/ consolidation/merger/etc
What are the facilities offered by Madhuvan Depository?
Madhuvan Depository offers following facilities:
· Dematerialization i.e., converting physical certificates to electronic form;
· Rematerialization i.e., conversion of securities from demat form into physical certificates;
· Electronic settlement of trades in stock exchanges connected to NSDL;
· Pledging/hypothecation of dematerialized securities against loan;
· Freezing of demat accounts, so that the debits from the account are not permitted;
· Nomination facility for demat accounts;
· Services related to change of address, change of bank details, and appointment of Power of Attorney.
· Effecting transmission of securities;
Account Opening & Operations
What are the key benefits of a Demat account with Madhuvan?
· A personalized and numbered Instruction Booklet (similar to a cheque book) for the customer along with compulsory signature verification ensures safety and security in processing of transactions
· Execution of instructions within the applicable timelines
· Demat service Desks at designated branches
· Net banking facility enables viewing *demat holdings from anywhere (*for clients who have bank accounts with us.)
· Online facility enables viewing demat holdings and transactions from anywhere
· Convenient payment of charges through your existing bank account
You can also open online trading account with Madhuvan Securities for buying and selling shares and other securities.
How can I open my Demat Account with MADHUVAN?
All you have to do is call any of our Designated branches and we'll assist you with a better understanding to open a demat account.
How frequently will I get a statement pertaining to my Demat account?
You will get a Statement of Holding cum Transaction cum Billing Statement on a quarterly basis. In addition you will also receive a monthly statement in case there are any transactions during the month.
Can I open more than one account with MADHUVAN Demat?
Yes, you can open more than one account with MADHUVAN and even with other depository subject to Know Your Client (KYC) norms
Do I have to keep any minimum balance of securities in my account?
No, there is no prescribed minimum balance. You can have a zero balance in your account.
Can someone else operate my account on my behalf on the basis of a power of attorney?
Yes, if you authorize any person to operate your account by executing a power of attorney (POA) in prescribed format and submit it to us, that person can operate the account on your behalf. If you have given POA earlier and now wish to operate the account yourself, the POA has to be revoked by you in writing.
How do I register a change in my signature with MADHUVAN Demat?
You would have to make a request in writing. You would also have to get your signature duly attested by your banker, with whom you hold the bank account that has been specified for receipt of dividend. Request letter should be signed by all account holders mentioning the reason of change along with the Identification documents.
Can I open a single account for securities owned in different ownership patterns such as securities owned individually and securities owned along-with my wife?
No. The demat account must be opened in the same ownership pattern in which the securities are held in the physical form. e. g. if one share certificate is in your individual name and another certificate is jointly held in your and your wife's name, two different accounts would have to be opened.
What do I do if I have physical certificates with the same combination of names, but the sequence of names is different. I.e. some certificates with husband as first holder and wife as second holder and other set of certificates with wife as first holder and husband as the second holder?
In this case you may open only one account with husband and wife or other way round as the account holders and lodge the security certificates with different order of names for dematerialization in the same account. You will have to fill-up an additional form called “Transposition cum Demat" form. This would help you to effect change in the order of names as well as dematerialize the securities.
Why should I give my bank account details at the time of account opening?
It is for protection of your interest. Your bank account number will be mentioned on the interest or dividend warrant, you are entitled to, so that such warrant cannot be encashed by any one else. Also, it is mandatory as per the guidelines of NSDL. In cities where ECS facility is operational, the financial benefits (e.g. dividends, redemption proceeds) will be credited directly through ECS.
Can I change details of my bank account?
Yes. Since in the depository system monetary benefits on your security balances are paid as per the bank account details provided by you at the time of account opening, you must ensure that any subsequent change in bank account details is informed to your depository participant.
What is 'Standing Instruction' given in the account opening form?
In a bank account, credit to the account is given only when a 'paying in' slip is submitted together with cash/cheque. Similarly, in a depository account 'Receipt in' form has to be submitted to receive securities in the account. However, for the convenience of investors, facility of 'standing instruction' is given. If you say 'Yes' for standing instruction, you need not submit 'Receipt in' slip every time you buy securities.
Can I operate a joint account on "either or survivor" basis just like a bank account?
No. The demat account cannot be operated on "either or survivor" basis like the bank account. It is always considered as Joint Account in case of more than one holder.
Can I add or delete names of accountholders (second or third accountholder) after opening the account?
No. Names of the accountholders for a depository account cannot be changed. If you want to change name or add / delete an accountholder, you need to open a new account in the desired holding pattern (names) and transfer the securities to the newly opened account. The old account may be closed.
What should I do if my address is changed? Do I need to write to each company separately?
In case your address is changed, you only need to inform the new address to your DP(s). When DP enters the new address in the depository computer system, it will be automatically conveyed to all companies in which you hold shares. The request for change of address needs to be signed by all the holders, along with proof of new address, ID docs & last transaction statement received from DP.
Can I close my demat account with one DP and transfer all securities to my account with another DP?
Yes. You can submit account closure request to your DP in prescribed form. Your DP will transfer all your securities, as per your instruction, and close your demat account.
What would be the charges for account closure and securities transfer due to account closing?
There are no charges for closure of a demat account. The transfer charges would be as per the schedule of charges of your DP, agreed by you at the time of account opening or any subsequent changes therein. In case the securities are transferred to another account in the same name, the transfer charges will be waived on submission of attested client master list reflecting the similarity of name.
What do you mean by dematerialisation?
Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with its DP. In order to dematerialise certificates; an investor will have to first open an account with a DP and then request for the dematerialisation of certificates by filling up a dematerialisation request form [DRF], which is available with the DP and submitting the same along with the physical certificates. The investor has to ensure that before the certificates are handed over to the DP for demat, they are defaced by marking "Surrendered for Dematerialisation" on the face of the certificates.
Can I dematerialise all my depository eligible securities through the same account?
Yes. You can choose to have all your securities deposited in a single account provided that the securities have the same holders.
Can I dematerialise shares, which are pledged with a bank, which is a DP as well?
Yes, you can, with the permission of the bank with whom such shares are pledged.
Can odd lot shares be dematerialised?
Yes, Odd lot share certificates can also be dematerialised.
How do I demat shares with Pre-Marital / Maiden names?
In such cases Account can be opened in the married name & you need to submit a certified true copy (Notarized) of the marriage certificate along with the Demat Request Form (DRF), when you give your shares for dematerialisation. Also provide an attested old & new specimen signature.
Who can nominate?
Nomination can be made only by individuals holding beneficiary accounts either singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, karta of Hindu Undivided Family, holder of power of attorney cannot nominate.
Can joint holders nominate?
Yes. Nomination is permitted for accounts with joint holders. But, in case of death of any of the joint holder(s), the securities will be transmitted to the surviving holder(s). Only in the event of death of all the joint holders, the securities will be transmitted to the nominee. Nomination is not allowed in accounts with more than two holders.
Can a NRI nominate?
Yes, NRI can nominate directly. But, the power of attorney holder cannot nominate on behalf of NRI.
Can a minor nominate?
No, a minor cannot nominate either directly or through its guardian.
Who can be a nominee?
Only an individual can be a nominee. A nominee shall not be a society, trust, body corporate, partnership firm, and karta of Hindu Undivided Family or a power of attorney holder.
Can there be more than one nominee?
No, only one nomination can be made for one depository account.
Can a minor be a nominee?
Yes, a minor can be a nominee. In such a case, the guardian will sign on behalf of the nominee and in addition to the name and photograph of the nominee, the name, address and the photograph of the guardian must be submitted to the DP. The account holder can not be a guardian of a minor nominee.
Can separate nomination be made for each security held in a depository account?
No. Nomination can be made account wise and not security wise.
Can a NRI be a nominee?
Yes, NRI can be a nominee subject to the exchange control regulations in force from time to time.
What is the procedure for nomination?
The prescribed nomination form duly filled-in should be submitted to the DP either at the time of account opening or later. The account holder, nominee and two witnesses must sign this form and the name, address and photograph of the nominee must be submitted. If nomination was not made at the time of account opening, it can be made subsequently by submitting the nomination form.
Can the nominee be changed?
Yes, the nomination can be changed anytime by the account holder/s by simply filling up the nomination form once again and submitting it to the DP.
What does transmission mean in relation to demat accounts?
Transmission is the process by which securities of a deceased account holder are transferred to the account of the surviving joint holder(s)/nominee/legal heirs of the deceased account holder. Process of transmission in case of dematerialised holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting documents to the DP whereas in case of physical securities the surviving joint holder(s)/nominee/ legal heirs has to correspond independently with each company in which shares are held.
What is the procedure for transmission of securities to the nominee in case of the death of the sole account holder?
In case of the death of the sole holder, for the purpose of transmission of securities, the nominee has to submit a duly filled-in transmission form, notarized copy of death certificate and an affidavit in the prescribed format to the DP. After verifying these documents and if found in order, the DP will transmit the securities to the account of the nominee.
What would happen if no nomination is made for the account?
In case nomination is not made by the sole account holder, the securities would be transmitted to the account of legal heir(s), as may be determined by an order of the competent court. However in cases where the value of securities to be transmitted is less than Rs. 1,00,000/- the DP may process the request based on submission of necessary letter of indemnity, surety, affidavits and NOC documents.
What is the procedure for transmission in case of Joint Accounts?
In the event of death of one of the joint holders, the securities will be transmitted to the surviving holder(s) on submission of Transmission Form and notarized copy of the death certificate of the deceased joint holder to the DP. For transmission of securities, the account of the surviving holder(s) must be in the same sequence in which the names appear in the joint account to be closed. If the surviving holder/s maintains or open demat account with another DP they have to produce attested copy of Client Master List duly attested by same DP.