Opening of Demat Account in the name of Association of Persons
Summary
SEBI has decided to permit the opening of demat accounts directly in the name of an Association of Persons (AoP) to foster ease of doing business. This permission is subject to conditions regarding permitted securities, PAN verification, and joint liability of members. The provisions become effective from June 2, 2025, requiring depositories to update their systems and bye-laws.
Text
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.
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.
The PAN Card details of the AoP and the Principal Officer of the AoP shall be obtained.
The AoP holds only such securities in dematerialized form as permitted by the statutes governing its constitution.
The demat account is not be used for subscribing / holding equity shares.
In case of any dispute, the Principal Officer of the AoP shall be treated as the legal representative of the AoP.
At all times, members of the AoP shall be jointly and severally liable on behalf of the AoP.
take necessary steps and put in place necessary systems for implementation of the above;
make amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision, as may be applicable/necessary;
bring the provisions of this circular to the notice of market participants (including investors) and also to disseminate the same on their respective websites.
The provisions of this circular shall be effective from June 02, 2025.
This circular is issued in exercise of the powers conferred upon SEBI under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with Section 26(3) of the Depositories Act,1996 and Regulations 59 and 97 of SEBI (Depositories and Participants) Regulations, 2018
Source: SecMarx — Opening of Demat Account in the name of Association of Persons. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.