SEBI has announced a tweak to the Basic Services Demat Account (BSDA) rules that will make it easier for small investors to qualify and reduce paperwork for depository participants.
What the change means
Effective from March 31, 2026, the regulator will no longer count Zero Coupon Zero Principal (ZCZP) bonds or delisted securities when calculating the value of a portfolio for BSDA eligibility. In simple terms, these assets will be ignored in the eligibility test.
Why it matters for investors
- Lower compliance burden: Depository participants (DPs) won’t need to include hard‑to‑price securities in their calculations.
- Clearer eligibility: Investors with holdings under ₹10 lakh can more easily meet the BSDA threshold.
- Automatic conversion: If you qualify, the DP must convert your regular demat account to a BSDA unless you actively opt out.
New quarterly review rule
DPs will now reassess every demat account’s BSDA eligibility every quarter, rather than on an ad‑hoc basis. For illiquid securities, the last available closing price will be used, and if market prices are missing, the most recent traded price or NAV will apply.
How the valuation works
- Listed securities: valued at daily closing price or NAV.
- Unlisted securities (except mutual fund units): face value can be taken.
- Illiquid securities: use the last closing price.
- Suspended, delisted, and ZCZP bonds: not considered for BSDA eligibility.
Background on BSDA
The BSDA was introduced in 2012 to give investors with small portfolios (under ₹10 lakh) a cheaper, simpler demat account option. By removing certain low‑liquidity assets from the eligibility calculation, SEBI aims to further reduce the cost and complexity for these investors.
Remember, this is perspective, not prediction. Do your own research and consider your personal financial situation before making any decisions.