I’m planning to invest in bonds via Wint Wealth. Earlier they used to connect with Zerodha demat account but now for several reasons, they started offering their own demat account. So they are asking me to complete KYC which will eventually open a demat account for my bond investing.
They claim that this demat account is for bonds, not stocks. So I want to know will this new demat account disqualify me for BSDA? BSDA has criteria of holding one demat account across depositories. So anyone can help?
Yes it will disqualify you from BSDA.
I had to open a demat account ling time back with PayTM money for my MF investment.
2 days back I got mail from PayTM stating my account is converted to Non-BSDA as I hold more than 1 demat account. So yes it will disqualify
This is something SEBI is forcing on all regulated entities.
Till now WintWealth was offering investment advise without being registered as RIA. This was similar to lot of other platforms who were offering direct MF and bond investment. Everybody’s logic was we are just offering execution service and not advice.
SEBI sometime back bought regulations for such execution platforms (mainly for platform offering direct MF) and they had choice to register either as agent of AMC or an Agent of investor (effectively a stock broker)
I think this is continuation of it, and now Wint Wealth also have to register itself as a stock broker (which they did). And since now they are a stock broker, they have to open a demat account. They are still dealing in bonds only and hence the claim that this demat is only for bonds. But practically it is a normal demat account, nothing different.
PayTM money and lot of other execution platform had to do same
The reasoning which I read on Twitter was that it is easier to calculate true P&L. There were lot of issues due to relying on trade calculation on zerodha, etc. making it a sub par experience.
Will this regulation end the concept of holding mutual funds in folio? Will platforms like Kuvera which offers direct mutual fund investments in folio or SOA have to mandate demat accounts?
As of now I’m holding my decision. My purpose was to first test the platform by investing a little amount but because of the demat thing, I’ll reconsider the platform. Since I don’t want to have 2 demats.
No it does not end it. Stock broker can still offer MF in folio format
Nope. PayTM still offers MF in folio format. My demat is empty, but I need to have it
It is more of regulatory requirement + executin requirement.
What I remembered, PayTM uses BSE star MF platform for execution of MF orders. And for that to work, each customer (that is someone like me) needs to have a unique demat number.
In short, MF are still issued in Folio format, but for order to be processed, demat account number is needed. Something like that.
People had MF in folio because they don’t want the hassle of having a demat such as AMC, SMS and email alerts etc. However AMC won’t be changed because of new BSDA rules upto a limit.
Now that demat is mandatory for order processing it destroys the purpose. Getting registered is good but why is it necessary to open demat account for each client? If I use 3 platforms to deal with my finances, having 3 demat is quite illogical.
Slowly but indirectly people will forced to hold MFs in demat. Can you please share the link to the regulation?
Google it out dude. I didn’t make the rules
This is what I remember what PayTM told me when I was forced to open demat.
And you always have the option of directly buying MF through AMC or some utilities like MFcentral, KFINtech etc.
It is not mandatory to use the fintech
People still have their MFs in folio format. Nothing has changed. This is just Wint Wealth issue, other platforms are fine and credit it to my Kite account
