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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

CDSL- Operating Guidelines For Opening Of Demat Account In The Name Of Association Of Person

27-May-2025 | CDSL/OPS/DP/POLCY/2025/355

CDSL has issued a communique to participants regarding Communique No. CDSL/OPS/DP/POLCY/2025/137 dated February 27, 2025, in reference to SEBI Circular No. SEBI/HO/MRD/PoD1/CIR/P/2025/24 dated February 25, 2025. This pertains to the opening of Demat Accounts in the name of Associations of Persons (AoPs), effective June 2, 2025. According to the circular, a new paragraph (1.2.6) has been added to Section 1 of the Master Circular for Depositories. This allows AoPs to open a Demat account in their name to hold mutual fund units, corporate bonds, and government securities, in addition to Demat accounts held by natural persons. However, this is subject to the following conditions: (a) Subscriptions are to be made only to financial instruments and securities permitted by statutes. (b) The PAN card details of both the Principal Officer and the AoP must be obtained. (c) The Principal Officer will serve as the legal representative of the AoP in case of any disputes. (d) The Depository Participant (DP) must confirm the following with the AoP when opening a Demat account: (i) The AoP holds only those securities in Demat form that are permitted by the statutes. (ii) The Demat account is not to be used for any purpose other than subscribing to or holding equity shares. DPS are advised to obtain a declaration from the AoP, as per Annexure A, at the time of account opening, along with the Account Opening Form (Annexure 2.1 for individuals or 2.2 for corporate entities). Please refer to the attached document for further details.

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