Wednesday, August 20, 2014
   
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Q1. Can one get an account opening form from NSDL?
Ans The account opening form can be obtained from the DP (Abhipra Capital Ltd.). This is similar to procuring an account opening form from a bank branch in order to open a bank account. 

Q2. Do depository accounts have nominee facility?
Ans Yes. The nomination facility has been extended for shares as per the recent amendments to the Companies Act, 1956.

Q3. If an investor has certificates belonging to the same security, in the same order of holders, does he have to open as many accounts as the number of folios?
Ans No. The investor can choose to have all securities deposited in a single account.

Q4. Can an investor dematerialise all his depository eligible securities through the same account?


Ans Yes. The investor can choose to have all his securities deposited in a single account provided the securities have the same holding pattern.

Q5. Can a sole holder of the share certificates add one more name as a joint holder at the time of dematerialising his share certificates?
Ans No. However, if the investor wants to transfer the ownership from his individual name to a joint name, he should first open an account as the sole holder (account A) and dematerialise the share certificates. He should then open another depository account (account B) in which he is the first holder and the other person is the second holder and make an off market transfer of the shares from the account A to account B. The investor will incur a charge on this transaction. Alternatively, the certificates can be transferred to the joint ownership and then sent for dematerialisation.

Q6. Can an investor open a second account with another DP?
Ans A client can choose to open more than one account with same DP. In addition to this, he has a choice of opening accounts with more than one DP. However a broker can open just one Clearing Member account per card/stock exchange for clearing purpose, but he can still open multiple beneficiary accounts.

Q7. Is it necessary for an investor to open account with the same DP as his broker for settling trades done through him?
Ans There is absolutely no compulsion for the client to open his account with the same DP as that of his broker. Even of he has an account with another DP, he can carry out normal business with his broker. There is no loss in operational efficiency. But, it is possible that opening account with his broker's DP may work out to his advantage, as some DPs may offer special charge structure if the broker and his clients are dealing through him. 


Q8. Why does a broker have only one Clearing Member-pool-account?
Ans One Clearing Member pool account is opened per card/stock exchange to settle trades in the dematerialised form. The Clearing Corporation/ House just deals with one designated account for pay-in and pay-out and the broker's clients know to which account they have to deliver and receive securities from.


Q9. Why cannot a clearing member hold his personal holdings in his clearing member account?
Ans A broker may deal in the depository system as a clearing member only through a special account, known as the Clearing Member account. This account can be used only for clearing purposes and not for holding his own securities in it. As this is a transitory account, the securities held in this account are not eligible for corporate actions. Therefore, the broker will have to open a separate beneficiary owner account to hold his investments.


Q10. Can a broker open more than one beneficiary account?
Ans Yes, the broker can open more than one beneficiary account for holding his own securities as any other investor.


Q11. In the event of death of the sole shareholder, how can the successors claim the securities lying in the beneficiary account?
Ans In the case of transmission, the claimant will have to fill in a transmission request form (which is available with the DP), supported by valid documents. The DP, after ensuring that the application is genuine, will transfer securities to the account of the claimant. For this, the claimant must have a depository account. The major advantage in transmission of dematerialised holdings is that the transmission formalities for all securities held with a DP can be completed in one go, unlike in the case of share certificates, where the claimant will have to interact with each issuing company or its R&T Agent.

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