SEBI permits opening of Demat Account in the name of Association of Persons.
SEBI in view of the representations to permit opening of demat accounts directly in the name of Association of Persons (AoP) has decided to allow opening of demat account in the name of the AoP for holding securities, such as units of mutual funds, corporate bonds and Government Securities in demat account.
Accordingly, Master Circular for Depositories dated December 03, 2024 has been modified by inserting paragraph 1.2.6.A. titled “Opening of Demat Account in the name of Association of Persons (AoP) as under:
1.2.6.A Apart from opening of demat account by AoP in the name of natural persons as provided in paragraph 1.2.6, an AoP may also open a Demat account in its own name for holding units of mutual funds, corporate bonds and Government Securities in dematerialized form, subject to the following conditions:
1.2.6.A.1 AoP shall be responsible for ensuring that it only subscribes to the financial instrument/ securities that are permitted by statutes governing the constitution of AoP.
1.2.6.A.2 The PAN Card details of the AoP and the Principal Officer of the AoP shall be obtained. Explanation: For this purpose, “Principal Officer” with reference to AoP means the secretary, treasurer, manager or agent or any person connected with the management or administration of the AoP.
1.2.6.A.3 While opening a demat account in the name of the AoP, the Depository Participants shall seek confirmation from the AoP with respect to the following:
1.2.6.A.3.1 The AoP holds only such securities in dematerialized form as permitted by the statutes governing its constitution.
1.2.6.A.3.2 The demat account is not be used for subscribing/holding equity shares.
1.2.6.A.4 In case of any dispute, the Principal Officer of the AoP shall be treated as the legal representative of the AoP.
1.2.6.A.5 At all times, members of the AoP shall be jointly and severally liable on behalf of the AoP.
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