ITP NEWS COVER: ARE OUR DEMAT ACCOUNTS WORKING AS PER OUR EXPECTATIONS?

Dear Tax Payers,

Many of our members have demat accounts with various service providers or DPs as they are called.

Most of them are not 'traders' in stocks. On the other hand, they are people who work towards buying or investing in specific companies and hold it possibly for their lifetime! They are really serious investors and they are the people who need to be protected by agencies such as SEBI.

They invest and hold stock.

Now, what the regulatory body does is pretty ridiculous. If I invest and hold stock, then I will have to do a 'transaction' regularly. I would I do that? I need to hold stock and not keep selling and buying every other day or even year. So what our regulatory body, SEBI has instructed freeze those accounts that do not have any transactions for a year!

I got a notice and my demat account is blocked. So is the case with many of my friends who have invested in one or two companies and who don't trade them! So according to SEBI, only those guys who trade in shares can hold shares. Serious investors who want to invest in a company and hold shares for years together have to necessarily move it out from Demat and do a Remat! Crazy!

So if you choose to sell it after five years, I will have to again Demat it and then sell it.

Now the other question is, most of the Demat accounts are connected with the bank accounts. So is mine. They deduct regularly monthly charges from my bank account. I am paying the charges to maintain my demat account. Even then, if there are no transactions, then SEBI says my account should be frozen!

What skewed logic they have, I do not know. My shares, which are my assets, are now locked up. Question is, how can they have the rights to lock my assets? Particularly when I have paid for the shares and the shares are mine! They are just holding a digital copy in their hand. And for that I am also paying every month and it is being debited from my account. Still if you freeze my accounts, I think, the regulation is not a proper one.

Finally, who should be verified? Which kind of share holder should be verified? Is it the one who does not do a transaction or has done only one or the one that is doing 1000 transactions in a year? Who should be verified?

The one who is doing lots of transactions are the ones who need to be verified not the one that is doing only one transaction in three years or four years. Their logics are all skewed!

https://www.sebi.gov.in

Thank you for reading.

Best regards,

Shantha Kumar

President.