Want to know which account is need to trade in stock exchange.
Want to know which account is need to trade in stock exchange.
In order to trade in securities, one needs to open a Demat account and a trading account from a DP (Depository Participant) that could be a Bank, NBFC (Non-Banking Financial Company), Brokerage firm , or any other financial institution .
A securities account, also known as a brokerage account, is an account that holds financial assets such as securities on behalf of an investor with a bank, broker, or custodian. Investors and traders typically have a securities account with the broker or bank through which they buy and sell securities.
A Demat account is also referred to as a Dematerialised account. The physical shares and securities that you purchased are converted or dematerialized and stored in an electronic format here. The SEBI (Securities Exchange Board of India) passed a regulation in 1996 mandating the use of a Demat Account in order to trade on the stock exchanges such as the BSE (Bombay Stock Exchange) or the NSE (National Stock Exchange).
A Demat Account is comparable to a bank account. When you sell or buy shares, the number of shares in your account is either debited or credited.
CAclubindia
