1. Good article, thanks for posting.
    Please clarify:

    1. Is a person permitted to hold multiple demat accounts for shares ?

    2. If Demat account is with bank, how to link it with broker account, for buying/selling transactions? Is it possible ?

    3. Many of us open ‘one account’ with a brokerage (Sharekhan,Religare etc). What are the sub-components of that? Which of those can be held at different places ?

  2. A typical broker has RSA keys provided with the account. You cant sell or buy(even your RM can`t) without the key.

    This is may not be applicable in case of risk management / if you owe them money.

  3. I’m a little(?) confused. How is a broker defined here? Are ICICI direct, sharekhan, etc. termed as brokers? What should I do to make sure that my shares are not controlled by broker?

  4. Uma Shankar Ladha

    There is a misinformation here. The point 1 can happen only, if you give a PoA (Power of attorney) to your broker (bank/sharekhan etc.) All these entities will ask you to sign a PoA if you do online trading with them. They need these PoA to deliver shares to exchange when you trade.

    Point 1 do happen, but if you are concerned about it, then dont have an online account. Have a offline account, where in NDSL/CDSL (where bank/broker opens demat account in your name on your behalf) gives you a delivery book (its like a cheque book). So whenever you do a trade, you need to fill this, sign it and give it your broker/bank. Broker/bank forwards this delivery slip to the exchange and they take care of settlement.

    I hope this clears the confusion with point 1.

    For point 6, always go with reputed brokers. They have a lot to loose than the non-reputed brokers. And most of the time, point 1 is not done by the broker, but by the dealer.

  5. Hi Subra sir,

    is fundsindia.com a good stock brocker, They are charging only 30ps for 100. Please help me if I can start investing through fundsinda.com in stock market.

    Yours faithful reader,
    Rahul

  6. Sir

    I have a demat account with Bajaj and HDFC
    I only use HDFC

    Just for the pain of not closing (since they ask you to come to their office etc etc), I haven’t closed it.

    Is it fine? I dont see any trades being done ….in that account

  7. Hi Subramoney, you have answered an important question, but I would appreciate if you could provide some guidance on the questions below:

    (1) I have a PoA with a share broker, my cash account is with a PSU bank, and the demat account which I can view from PSU bank website is with NSDL.
    (2) The broker as a company is big, however the individuals working there may take advantage, and so what controls and precuations should I take, for the following:
    a) The broker has been given a blanket authority to deal upto a certain amount without contacting me, for buying and selling
    b) My list of portfolio has been categorised into those for trading and those for long term investment purposes
    c) How do I ensure that my broker does not use my idle shares in the demat account for securities lending or some other kind of activity (margin etc) without me knowing or without knowledge of NSDL or without knowledge of PSU bank
    d) What control should I take to ensure that for all sales made, the money always gets transferred to my bank account and not with anybody else bank account
    e) Is it possible for such things as “d” above to happen.
    f) Same scenario in case of a buy transaction, how do I ensure that he debits my cash account and the shares brought gets transferred to another person demat account.

    I would appreciate a response.

    Thank You
    Prakash

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