Neutral impactEconomy
SEBI weighs two-year dormancy rule for demat accounts
BusinessLine 56 min ago·6 Nov 2026, 2:49 pm
The Securities and Exchange Board of India (SEBI) is considering a proposal to mandate a two-year dormancy rule for demat accounts. This would mean that if an account is not used for trading or transactions for two consecutive years, it will be automatically frozen. The regulator is looking to implement this to align the treatment of demat accounts with existing rules for trading accounts and to prevent the misuse of dormant accounts.
This move is significant for investors as it aims to clean up the market by removing inactive accounts that may be prone to fraud or misuse. For retail investors, it implies a need to keep their accounts active or ensure they are aware of the rules to avoid any inconvenience. The move is expected to enhance the overall integrity and security of the demat account ecosystem.
Investors should watch for the final notification from SEBI, which will outline the specific compliance requirements and timelines. It is advisable to review the status of your demat accounts and ensure they are active to avoid any disruption in trading activities. The implementation of this rule will likely be phased in to give investors adequate time to comply.
Excerpt from BusinessLine
Move seeks to align treatment with trading accounts and curb potential misuse of long-unused accounts The Securities and Exchange Board of India (SEBI) is discussing a proposal to introduce a uniform two-year dormancy period for demat accounts, bringing them in line with trading accounts, amid concerns over the…Read the original at BusinessLine
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