Types of Accounts
Beneficial OwnerAccountClearing MemberAccountHouseNon-HouseIntermediaryAccount
Any investor who wishes to avail depository services must first open an account with a depositoryparticipant of NSDL. The process of opening a demat account is very similar to a bank account.The investor can open an account with any depository participant of NSDL. An investor mayopen an account with several DPs or he may open several accounts with a single DP. There areseveral DPs offering various depository-related services. Each DP is free to fix its own feestructure. Investors have the freedom to choose a DP based on criteria like convenience, comfort,service levels, safety, reputation and charges. After exercising this choice, the investor has toenter into an agreement with the DP. The form and contents of this agreement are specified bythe Business Rules of NSDL. In this chapter we deal with the procedure for account openingunder the NSDL system.
Types of Accounts
Type of depository account depends on the operations to be performed. There are three typesof demat accounts which can be opened with a depository participant viz. (a) Beneficiary Account(b) Clearing Member Account and (c) Intermediary Account.
A DP may be required to open three categories of accounts for clients - Beneficiary Account,Clearing Member Account and Intermediary Account.
A Beneficiary Account is an ownership account. The holder/s of securities in this type of accountown those securities.
The Clearing Member Account and Intermediary Account are transitory accounts. The securitiesin these accounts are held for a commercial purpose only.
A Clearing Member Account is opened by a broker or a Clearing Member for the purpose ofsettlement of trades.
An Intermediary Account can opened by a SEBI registered intermediary for the purpose of stocklending and borrowing.