The Securities and Exchange Board of India (Sebi) on Tuesday said investors with inactive accounts, with zero balance and no trades for a year, will now get their physical annual account statements upon request from the second year.
So far, depository participants (DP) were automatically providing such investors physical annual statements.
As per the new norms issued on Tuesday by Sebi, "DP shall send at least one annual physical statement of holding to the stated address of the Beneficial Owner (BO) in respect of accounts with no transaction and nil balance even after the account has remained in such state for one year".
"The DP shall inform the BO that the dispatch of the physical statement may be discontinued if the account continues to remain zero balance even after one year," the market regulator said in a circular.
However, Sebi said that "if a BO requests for a physical statement, the DPs shall provide the same".
Electronic statement of holding to all the investors whose email ids are registered would continue, it added.
According to the new rules, "the dispatch of the physical statement may be discontinued for the account which continues to remain zero balance even after one year" in case no 'Annual Maintenance Charge' has been received by the DPs.
Sebi clarified that suspended securities may not be considered for the purpose of valuation of holdings.
The watchdog has asked the depositories - NSDL and CDSL- to make necessary amendments to the existing regulations for the implementation of the new norms.
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