How to reactivate a dormant trading account?
Although a large number of investors and traders open demat and trading accounts, not all of them use them actively. They also have a habit of forgetting to close the account.
Many investors have received emails from their brokerage firms informing them that their trading accounts have become “dormant” due to a lack of activity.
SEBI and stock exchanges have adopted strict guidelines for recognizing inactive accounts with a legal meaning in the wake of recent incidents.
Why are trading accounts deemed to be dormant?
Dormant trading accounts are defined as those that have been inactive for a long period of time.
If there has been no trading activity in the past or present, a trading account is considered dormant. The broker determines how long a trading account remains inactive. Under the new laws and regulations, the time limit has been shortened to a year.
The depository participant (DP) has the right to disable an investor’s trading account without their consent if no trading activity is identified for a year.
What steps should investors take to reactivate their dormant accounts?
If an investor wants to resume stock market trading after a break, they must first reactivate their Demat account before proceeding to their trading account.
They must pay all outstanding debts, including transaction expenses, before shutting their dormant trading account.
To complete both of the aforementioned requirements at the same time, investors must first activate their trading account before closing it.
Reactivating a trading account is a simple procedure. Demat accounts, on the other hand, accumulate charges over time that must be paid before the account can be closed.
Here is a step-by-step guide to reactivating your trading account.
- The first step in reactivating a trading account is to restart the KYC procedure. The investor must also complete In-Person Verification in addition to the KYC procedure.
- Due to COVID-19, the IPV procedure was carried out using webcams and established protocols that an investor must follow.
- Although the manner and criteria for reactivating a trading account vary based on the Depository Participant, the process and rules are the same.
- Customers must mail a letter to the company’s headquarters or use any other digital options offered by the broker to close their DP and reactivate their trading account.
- Investors can reopen their accounts by sending copies of their PAN and AADHAR cards to the company’s headquarters and following the office’s instructions.
This is a simple way for an investor to reactivate their trading account.