CDSL, BSE, CAMS, KFin Technologies and other broking stocks gain up to 2%; here’s why

CDSL, BSE, CAMS, KFin Technologies and other broking stocks will gain focus in Thursday’s session as the market watchdog SEBI on Wednesday proposed to increase the threshold for a basic service demat account (BSDA) for achieving wider financial inclusion.

In early trade, shares of CDSL traded higher by over 2 per cent at Rs 2,015, while BSE was up over 1 per cent at Rs 2,703.2. Meanwhile other counters, including KFin Technologies and CAMS traded with gains of up to 2 per cent.

At present, an individual can hold debt securities worth upto 2 lakhs and other than debt securities worth upto 2 lakhs in a single demat account to be eligible for  BSDA, which SEBI is proposing to increase to Rs 10 lakh. Zee Business had given this news in July last year.

“Keeping  in  view  the  growth  of  benchmark  indices in  the  previous decade  and  to further enhance the  participation  of  retail  investors in  the securities  market including
participation  of investors  holding  securities  in physical  form ,the  facility  for  BSDA  has  been  reviewed  and  it  is  proposed  to enhance  the  limit  for  a  demat  account  to  be  categorized  as  BSDA,” SEBI said in a note

Further, maximum annual maintenance charges or AMC for BSDA as well as services to be provided to BSDA have also been reviewed in the Draft Circular, it added.

A BSDA account is a demat account targeted at small investors who are not regular investors in different securities, including stocks, mutual funds, ETFs, bonds etc. 

Also, the market regulator is reviewing the account maintenance charges for the BSDA together with the services offered. Currently, the accounts that maintain debt securities amounting to Rs 1 lakh and Rs 50,000 in other securities are not charged any amount. This limit may be modified to Rs 4 lakh. Furthermore, those holding securities worth Rs 4 lakh to Rs 10 lakh are charged Rs 100.

Furthermore, protecting investors’ interest, the process of securities payout directly to the client account shall now be mandatory. In this regular, the regulator’s circular stated that the 
direct payout to client accounts was already facilitated on a voluntary  basis.

So, with this ruling in place, clients’ securities will now be directly transferred by the clearing corporation to them, ensuring that the stock  broker segregates securities  of  the  client  or  clients so  that  they  are  not vulnerable to misuse.