The problem for small investors and those that are trading in stocks, is that they keep hearing the Sensex hitting new highs and people making money, but, do not know how to invest in the stock markets themselves.
"We do not understand stock markets", is the often heard refrain along with the fact that the entire procedure for opening accounts is laborious.
India's stock market regulator, the Securities and Exchange Board of India (SEBI) has been trying to do its bit to make things simpler for first time investors and the SARAL is one more initiative.
How to Open Saral Account Trading Account?
Individuals investors need to just fill up a simplified Account Opening Form termed as 'SARAL AOF' link is provided here.
Saral account opening form will be available with the intermediaries, one can also download from the Exchanges' and Depositories' website.
The investors who open account through SARAL AOF will also have the option to obtain other facilities, whenever they require, on furnishing of additional information as per prescribed regulations/circulars.
What this means is that they can open the demat and trading account at a broker of their choice and also shortlist based on charges and other criteria.
Documents Needed To Open Saral Trading Account
'Proof of address' documents have been simplified, for individuals who are novice to facilitate ease in understanding.
Now, investors can submit only one proof of address (either residence/correspondence or permanent) while opening a trading account and/or demat account or while undergoing updation.
While, it is not necessary to submit any proof for such correspondence/residence address.
If there is a change in address, one can inform such a change in the address for correspondence to the concerned broker within 2 weeks of such a change.
However, the broker may confirm the address through confirmation measures such as: (1) acknowledgment of receipt and welcome kit and the dispatch of contract notes or any other periodical statement, etc.
A Good Move
This is a good move on the part of the Securities and Exchange Board of India (SEBI) to simplify measures for first time investors.
However, one cannot escape the fact that there are some cumbersome procedures that investors still have to comply with. This is in keeping with existing guidelines that cannot be waived off for any set of investors.