Everything You Need to Know About Demat Account Nomination and Transmission
A demat account, also known as a dematerialized account, is an electronic account that holds securities and shares in digital format. The Securities and Exchange Board of India (SEBI) introduced the Demat account system to encourage paperless securities trading. The Demat account system has revolutionized securities trading in India, making it more secure, transparent, and efficient. In this article, we will focus on Demat account nomination and transmission.
Demat Account Nomination
Nomination in a Demat account is like nomination in a bank account. It is a process where the account holder can nominate an individual to receive securities in the event of death. This ensures that the securities are transferred to the nominee without any hassle and according to the account holder’s wishes. You learn about these facts once you explore the question – how to open demat account?
To nominate a person for a Demat account, the following steps must be taken:
Fill up the nomination form The first step to nominate a person in a Demat account is to fill up the nomination form provided by the depository participant (DP). The form requires personal details of the nominee, such as their name, address, and phone number.
Provide the necessary documents. Along with the nomination form, the account holder must provide supporting documents such as the nominee’s identity and address proof. The nominee should self-attest the documents.
Submit the form After filling up the nomination form and attaching the necessary documents, the form needs to be submitted to the DP. The DP will verify the documents and add the nominee’s name to the account and check how to open demat account?
It is essential to note that a single nominee can be added to a Demat account in most cases. The nominee can be changed or deleted by submitting an updated nomination form.
Demat Account Transmission
Transmission, in the context of a Demat account, refers to the transfer of shares or securities from the account of a deceased person to the account of the legal heirs or the nominee. The legal heirs, in this case, are the individuals who are entitled to inherit the shares or securities of the deceased person. This is as per their will or as per the statutory provisions and know how to open demat account.
The transmission process in a Demat account can be initiated by legal heirs or nominees, depending on the circumstances. The first step in this process is to submit the transmission request form to the depository participant (DP). The transmission request form requires details about the account holder, the securities to be transmitted, and the legal heirs or nominees who will receive the securities. The form must be supported by relevant documents such as the death certificate of the account holder. It must also include a copy of the will, and relevant identification and address proofs of the legal heirs or nominees. Do you need to know how to open demat account?