Capital markets regulator Sebi on Wednesday proposed to enhance the threshold for the basic service demat account (BSDA) to Rs 10 lakh from the current Rs 2 lakh in a bid to boost the participation of retail investors in the securities market.

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A basic service demat account, or BSDA, is a more basic version of a regular demat account. The facility was introduced by Sebi in 2012 for reducing the burden of demat charges on investors with small portfolios.

At present, an individual can hold debt securities worth up to Rs 2 lakh and other than debt securities worth up to Rs 2 lakh in a single demat account to be eligible for BSDA.

In order to further boost participation in the securities market and to facilitate ease of doing investments, the facility of BDSA has been comprehensively reviewed, Sebi said in its consultation paper.

The regulator proposed that the value of securities held in the demat account should not exceed Rs 10 lakh for debt and other than debt securities combined at any point of time.

Listing out eligibility criteria, Sebi said an individual needs to have only one demat account where he/she is the sole or first holder and the individual needs to have only one BSDA in his/her name across all depositories. Additionally, the regulator has proposed to review the maximum annual maintenance charges (AMC) for BSDA.

For portfolio values up to Rs 4, Sebi has proposed that annual maintenance charge for a BDSA should be nil and for portfolio values of between over Rs 4 lakh and up to Rs 10 lakh, the charges should be Rs 100. However, if portfolio value exceeds Rs 10 lakh then BDSA should automatically be converted into a regular demat account.

With regards to services for BDSA, the regulator said that electronic statements should be provided free of cost to such account holders, besides, physical statements can be charged at Rs 25 per statement. The Securities and Exchange Board of India (Sebi) has sought comments till June 26 on the proposal.