The Securities and Exchange Board of India (SEBI) through a notification earlier this week has replaced the existing contractual agreement to be signed between the depository participant and demat account holder with a more simple term sheet referred as 'Rights and Obligations'. The agreement for demat account opening which was until now required to be signed on a stamp paper has been done away with. The new notification thus waives payment of stamp duty for investors registering with the capital market.
As per the statement of the Central Depository Services Ltd. (CDSL) the move will benefit new demat account holders as they will not have to make the payment of Rs. 100 as stamp duty that was charged earlier for agreements concerning demat account.
With the new guidelines in place, SEBI requires depository participants to provide demat account holders with a copy of the new document and obtain its acknowledgement along with other requirements. The regulator also said that the new document will be binding and mandatory for the depository participants as well as new and existing demat account holders.