If market investments get done prudently, you can reach different life goals at a rapid pace. For investing in the share market, you Demat and trading accounts. These get offered by banks and brokerage firms, also called depository participants or DPs. Such accounts can be opened offline as well. You need to complete what is called as KYC compliance while opening these accounts.
Here is what you need to know about how to open Demat Account and its KYC norms. You can open Demat Account both offline and online. The offline process is as follows –
- Visit the branch office of the selected DP
- Fill the account opening form
- Submit photocopies of the PAN card, ID, address, employment, and income proof documents, and carry the original documents for verification
- Complete the KYC compliance by submitting another set of the mentioned documents
- They get verified, and the Demat Account is accessible within seven days
The KYC norms
For opening the Demat and trading accounts, you need to complete the KYC formality. This allows the SEBI to make sure the consumers have all the relevant documents to trade legally. It also enables SEBI to trace the flow of funds through the banking channels. In fact, KYC compliance is essential for all investments.
KYC came into existence for combating corrupt practices such as money laundering, high cash transactions without audit trails, money fraud, and financing anti-national activities.
Documents required
KYC compliance for Demat Account does not complete without essential documents. You should submit the copies of the following papers and present the original ones for verification –
- Original KYC application form which includes details such as name, contact information, home and office address, nominee details, etc.
- Self-attested copies of PAN card along with ID proofs such as passport, driving license, Aadhaar, voter’s ID, etc.
- Address proofs which include current and permanent address, for which you need bank passbook, passport, ration card, utility bills, etc.
- Cancelled cheque with the account holder’s name embossed clearly on the cheque for verifying the bank account details and IFSC code
Once you have submitted all documents for KYC compliance and to open Demat Account, you can access them anytime. There is an online KYC completion process as well called the e-KYC facility. KYC is a one-time activity post which your data gets stored in the central database permanently and linked to the PAN card. With KYC, financial institutes can track your transactions. Also, the capital market activities get connected to your bank account and tax returns.