Demat securities

What is Lending and Borrowing of Securities?
If any person required to deliver a security in the market does not readily have that security, he can borrow the same from another person who is willing to lend as per the Securities Lending and Borrowing Scheme.

Can lending and borrowing be done directly between two persons?
No. Lending and borrowing has to be done through an ‘Approved Intermediary’ registered with SEBI.

Can I lend the securities lying in my account?
Yes. You can lend your securities through Approved Intermediaries registered with SEBI.

How an investor can participate in lending and borrowing of security?
You may enter into an agreement with the approved intermediary to be a lender under this scheme. After that, you may lend securities any time by submitting lending instruction to your DP.

How would I lend my demat securities?
Intermediary may return the securities at any time or at the end of the agreed period of lending. Intermediary has to repay the securities together with any benefits received during the period of the loan.

Can lending and borrowing be done through CDSL demat account?
Yes. CDSL system is being enabled to undertake lending and borrowing of securities through demat account opened with it.

How would I receive the corporate benefits which would accrue on these securities during the period of lending?
The benefits will be given to the Intermediary/borrower. However, whenever the securities are being returned / recalled. Intermediary/borrower will return the securities together with benefits received.

What is transmission of demat securities?
Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. 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 necessary documents to the DP

Whether I need to give bank account details at the time of account opening?
It is for your own protection. The bank account number will be mentioned on the interest or dividend warrant, so that such warrant cannot be encashed by any one else. Further, cash corporate benefits such as dividend, interest will be directly credited to your account through the ECS (Electronic Clearing Service) facility, wherever available, by the company. This would reduce the paper work at your end for depositing the cheque, loss of cheques in transit etc.

Do I need to maintain a minimum balance in my account?
No you are required to maintain any minimum balance of securities in your DP account. You can hold even 1 share of a company.

Whether I can change the details of my bank account?
Yes. Since in the depository system monetary benefits on the 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 DP immediately.

Can I close my demat account with one DP and transfer all securities to another account with another DP?

Yes you can. You can submit account closure request to your DP in the prescribed form. The DP will transfer all the securities lying in the account, as per the instruction, and close the demat account.

Whether I can freeze or lock my account?
You can freeze or lock your account for any given period of time, if so desired. Accounts can be frozen for debits (preventing transfer of securities out of accounts) or for credits (preventing any movements of securities into accounts) or for both.