How to close a demat account with delisted shares (2024)

FAQs

How to close a demat account with delisted shares? ›

If you wish to shut your Demat account, you must go to the Depository Participant's office and submit a Demat account closure form together with the required papers. This form is also available to obtain on the Depository Participant's website.

Basic Account Closure: Under this account holders can close their demat accounts when there are no holdings, pending payments, or charges. All they have to do is submit a request to the appropriate depository participant.

Step 1 - Download the Demat account closure form from your depository participant's (bank or investment agency) website. Step 2 - Then fill in the form accurately and submit it with your KYC documents. Make sure all the proofs are valid.

Even if the shares are delisted from stock exchanges, they are still lying in your demat account as delisting cannot amount to the extinguishment of the shares or your rights in the shares.

Once the depository marks your demat account dormant, you cannot make any debit or credit transactions whatsoever without reactivating the account first. And to do so, you would first need to go through the entire Know Your Customer (KYC) process once again.

The demat account can be closed by the individual once the balance of the account becomes zero. Getty Images If you have a Basic Services Demat Account then no annual maintenance charges should be applicable.

It isn't possible to close a Demat account online. It requires filling out a form and delivering it to a DP's office.

The demat account cannot be closed without closing the trading account for the following reasons: Equity intraday positions have to be settled to the demat account if they are not closed by the end of the day. All stock F&O contracts are settled physically to the demat account.

Fees and maintenance costs are associated with demat accounts. As a result, all inactive or zero balance Demat accounts should be closed. We'll lose money if we don't. As a result, it's critical to understand how to shut a demat account correctly.

Brokers are intermediaries; they cannot operate your trading account without your consent. In addition, they cannot use funds from your account for their purposes. If a broker shuts down, you need to apply for compensation for your trading account with the Investor Protection Fund set up by SEBI.

What happens if you don't sell a delisted stock? ›

Shareholders retain their legal rights and equity interest in a delisted stock even if they cannot sell their stake as readily as previously.

The delisting of shares results in the impossible selling of shares until the company goes through the exit route. It is effectively irrecoverable and is a loss to the taxpayer. Once the company goes through liquidation or is referred to NCLT under IBC, NCLT declares the company to drop the shares and claim the loss.

When a security gets delisted, it ceases to trade on a major exchange. That said, technically, the holding of an investor is intact, and he can still trade in the security, provided there are willing buyers. However, in reality, the ownership right to the security becomes worthless.

Reasons to Close Demat Account:

Investor may no longer be interested to invest in the securities market. Investor is shifting abroad. Investor is opening a new account. Investor wants to change DP.

You can put a general freeze on your demat account, which will prevent any credit or debit transactions. You can also just halt debits from your demat account, as most demat account users do. Finally, you can freeze specific ISIN numbers so that the block only affects those shares and the others can be traded.

There are no such limits. You can hold any value of securities or shares in your demat account.

It's important to note that a demat account cannot be closed solely via an online request for account closure via email. You must make an application in person, along with a hard copy of all the documentation. However, you can speed up the process by uploading the closure form online.

These are charged on a monthly, quarterly, half yearly or annual basis. So, from now on, if an annual AMC has been paid by the BO and if the BO closes or shifts his account in the first quarter, he will be refunded the amount of the balance 3 quarters, which would be 3/4th of the AMC.

Once an account is permanently closed, clients will not be able to log in to the account and access any data. This is irreversible. Visit console.zerodha.com and download the necessary reports such as ledger, contract notes, P&L statements etc. To trade with Zerodha again, open a new account.

Can a Demat account become dormant? ›

Depending on the rules followed by your broker, a demat account can be declared a dormant account if it hasn't had any transaction from 11 months to five years. Receipts of dividends or corporate actions are not counted as transactions by brokers.

Brokerage firms often charge account closure fees. You could pay around $75 or more to close a brokerage account. While you may want to avoid the fee, it could be worth paying it to move to a better broker.

Your DEMAT Account is subsequently credited by the broker with those shares. The seller's bank account is credited with the funds that were deducted from yours to acquire the shares. Due to the T+1 settlement cycle, trade-related settlements must be made a day, or 24 hours, after a transaction is completed.

Selling Of Delisted Shares To Stocx

There are a lot of investors in Stocx that want to invest in various companies. We can help you sell your ESOP shares to those investors and get you the money within the comforts of your own home. We follow a quick and hassle-free process.

Investors holding shares after a delisting will only be able to sell them OTC. That generally means less liquidity, finding it harder to locate buyers at the price you want, and potentially being left in the dark about what the company is up to. Nasdaq.

If a stock that you own delists, you'll be able to sell it in the market, but you won't be able to purchase additional shares. Once a stock delists, the in-app market data will no longer reflect the current trading price.

Did you know? To close an account with delisted shares, they must be transferred to a different demat account using DIS or CDSL easiest if the ISIN is active. Delisted shares cannot be gifted. To learn more, see What are the different ways to transfer shares from my Zerodha account?

They are required to send out the letter of offer to the eligible shareholders along with a bidding form. As a shareholder, you can sell your shares by applying for a buyback. There are chances that the company offers buyback at a premium price when they opt for delisting due to expansion or merger.

If the suspended company complies with all regulations, the exchange might revoke the suspension, and the shares will start trading again. If the company gets suspended and then eventually closes, shareholders of the company will have to write it off as a loss.

Companies have 10 days on the New York Stock Exchange (NYSE) to respond to a notification letter from the exchange. Failure to respond can result in delisting procedures which is on a case by case basis but can range from one to seven months.

What will happen to my Didi shares? ›

Inferred from its official announcement, Didi will not go private before going public but will directly “convert” its U.S. shares into Hong Kong shares (ADSs will be convertible into freely tradable shares).

The demat account cannot be closed without closing the trading account for the following reasons: Equity intraday positions have to be settled to the demat account if they are not closed by the end of the day. All stock F&O contracts are settled physically to the demat account.

Brokers are intermediaries; they cannot operate your trading account without your consent. In addition, they cannot use funds from your account for their purposes. If a broker shuts down, you need to apply for compensation for your trading account with the Investor Protection Fund set up by SEBI.

Yes, that is possible. The trading account can be closed but if it is linked to a demat account then you must ensure that the demat account is a standalone demat account or map it to another DP, otherwise you will have to close both trading and demat account.

Reasons to Close Demat Account:

Investor may no longer be interested to invest in the securities market. Investor is shifting abroad. Investor is opening a new account. Investor wants to change DP.