SEBI Proposes Revamp of Basic Services Demat Account Rules

SEBI has proposed excluding ZCZP bonds from the BSDA portfolio value calculation to enhance financial inclusion. This move aims to streamline investments and ease business operations by ensuring fair eligibility criteria, especially by reassessing account holdings quarterly and treating delisted securities as non-tradable.

The Securities and Exchange Board of India (SEBI) has set forth a proposal to exclude ZCZP bonds from the portfolio value calculation that determines Basic Services Demat Account (BSDA) eligibility. The initiative seeks to bolster financial inclusion by preventing the artificial inflation of portfolios that could deny investors BSDA benefits.

ZCZP bonds, unlike conventional securities, are non-transferable and non-tradable, offering no monetary return. SEBI asserts that their inclusion in demat account valuations can misrepresent an investor's actual assets, making them ineligible for BSDA advantages. Instead, these bonds should be considered as more akin to a social contribution than an investment asset.

Additionally, SEBI suggests a quarterly reassessment of BSDA eligibility by Depository Participants and proposes treating delisted securities akin to suspended ones to ensure fairness and liquidity transparency. The public has been invited to comment on these proposals until December 15.

(With inputs from agencies.)