How to close your Demat Account
Shares are kept in the dematerialized or electronic form in two depositories – Central Depository Services Limited and National Securities Depository Limited. Depositories receive shares through depository participants (DP) and not directly from investors. DPs are registered with the Securities Exchange Board of India (SEBI) and acts as agents for depositories.
To trade in shares, you need to have two accounts – a trading account with a share broker and a demat account with a DP. You can have these two accounts with different entity, but it is advisable to keep trading and depository accounts with the same entity to avoid settlement issues. You can change your DP if your current one is not prompt with settlement of shares you buy or sell. For that, you will have to open a new depository account and then close the old one.
How to close a Depository Account
Following are the 4 points by which you can close your depository account.
1. Submit Application: Submit the Application in the prescribed format, annexure Q, to your DP. You can download the application from the DP website, for example www.nsdl.co.in. Submit all unused delivery instruction slips, which are issued by DPs and are used by investors for transferring the shares, with the request form. All the stocks would be transferred to your new depository account, which would be mentioned in the application form. A demat account can be closed only if there are no shares in it.
2. Negative Cash Balance: If your account has negative cash balance, settle it before submitting the request for its closure. Negative cash balances arise on account of charges related to the account, like the annual maintenance charge. If you request closure without settling the negative balance, the DP can either reject your application or accept it with a waiver of charges.
3. Dead ISIN: The account cannot be closed if it contains ISINs. The International Securities Identification Number (ISIN) is an ID number that is unique for all the shares of a company. There is no problem in transferring live ISINs, which belong to companies whose shares are being traded on stock exchanges, but what do you do with dead ISINs, which are companies whose shares are no longer being traded? In this case, apply for dematerialization of the dead ISINs (conversion of electronic holdings into share certificates, the opposite of dematerialization) to your DP before placing your account closure request. The DP passes on the request to the concerned depository, which then intimates the registrar, which finally issues the share certificates to you. If you do not get share certificates from the registrar and are unable to get your account closed due to pending remat requests, you should get it frozen.
4. How to Freeze an Account: Open a new account and request your current DP to transfer the ISINs from your old account to it. All active ISINs will get transferred, leaving only dead ISINs in the old account. Apply for freezing, or suspension of this account in the prescribed format, annexure P. To revive the frozen accounts again apply to the old DP in annexure P.
How to close your Demat Account
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Account closure form dully signed is with me. Now, to close my account where I have to submit it. My account at Amreli- Gujarat & at present I am in Baroda. Please inform me. At present no share with me & my account remain idle since last three years & no interest for future.
Please inform me why I have not received any interest from my Demat account.