Demat is the process of dematerializing the physical share certificates. A Demat account is an electronic account opened through depository participants that hold shares in electronic form. Think of it as a bank account, you are assigned a unique Demat account number through which you can apply or trade your shares. Demat account has been made mandatory in Nepal and now, people need to have a Demat account for any transaction in the share market. In this article, we are talking about How to open a Demat account in Nepal.
1 Find the company providing DP service
You need to find out the company that is providing the service. Usually, Depository participant’s service is given to Commercial banks, Investment banks, Mutual funds, Stockbrokers, and so on. Find out where it is convenient to open a Demat. It doesn’t matter from where you open the Demat account but it would be better to open the account from where you have the bank account.
2. Fill up the form and provide required documents
You will then be provided the Demat account opening form. You have to fill the form. You would require to submit a Nepali citizenship photocopy and a passport size photograph for the form. In the case of the minor, the guardian needs to submit the photo of the minor, a photocopy of the birth certificate, and a photocopy of the guardian’s citizenship.
3. Pay the fees and submit it
It only costs Rs 50 to open the Demat account and Rs 100 as the annual operating charge. You have to pay Rs 100 each year to renew the account.You can also open a Mero share account through which you can easily trade the shares online. You need to pay additional Rs 50 and fill up a form to activate your account in Mero share.
4. Verification and Demat account number
After the document being submitted to DP, they enter the information about the investor in CSDC.CSDC verifies the entry and then provides a verification letter. After the verification, the CDSC opens the Demat account and assigns the unique Demat account number to the investor and a checkbook.
5. Deposit your physical shares in your Demat account.
After your Demat account has been set up, you need to take your physical share certificates to the place where you opened the Demat account. Then, you need to fill up a dematerialization request form with the correct signature and submit it. The physical shares would be now dematerialized and deposited in your account just like a bank account. If you sell the shares, your account would be debited from your account and if you purchase the shares, it would be credited.
Each family member needs to open the Demat account and one can open two Demat accounts at the most. It is mandatory to have a Demat account to buy and sell shares in the primary and secondary markets. So if you still don’t have a Demat, it’s time to open the account asap.
Note – If you have opened a DEMAT account and not been using it for a long time, then make sure it is renewed. You need to renew your DEMAT account for the secondary market transactions. You can also apply for an automatic renewal system at your respective banks.
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