**Executive Summary**
This circular, issued by the Securities and Exchange Board of India (SEBI) on December 24, 2025, aims to further enhance the "Facility for Basic Services Demat Account (BSDA)" to ease investments and doing business. Key changes include excluding certain securities from the BSDA threshold calculation and requiring quarterly eligibility reassessments. The provisions of the circular will come into effect on March 31, 2026.
**Key Points / Main Content**
* **Securities Excluded from BSDA Threshold:**
* Zero Coupon Zero Principal (ZCZP) bonds
* Delisted securities
* **BSDA Eligibility and Valuation:**
* The valuation of illiquid securities shall be at last closing price for calculating the threshold for BSDA.
* DPs must reassess BSDA eligibility every quarter.
* DPs shall open only BSDA for Beneficial Owners (BOs), if such demat accounts are eligible for BSDA, unless such BOs specifically provide their consent through authenticated and verifiable channel to avail the facility of a regular demat account.
* **Beneficiary Owner Consent:**
* DPs shall require the beneficiary owner to submit consent to avail / continue to avail the facility of a regular demat account by active consent through a verifiable channel as specified by the Depositories.
* DPs shall also reassess the eligibility of all the existing BOs with respect to BSDA at the end of every quarter and shall convert all such eligible demat accounts into BSDA unless such BOs specifically provide their consent through authenticated and verifiable channel, as specified by Depositories, to continue to avail the facility of a regular demat account.
* **Valuation of Holdings:**
* The value of holding shall be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds, as the case may be. Where such price is not available, the last traded price may be taken into account. For unlisted securities other than units of mutual funds, face value may be taken in to account. For illiquid securities, last closing price may be taken into account. The value of suspended securities, delisted securities and Zero Coupon Zero Principal bonds may not be considered for the purpose of determining eligibility of demat account as BSDA.
* **Implementation and Effective Date:**
* This circular comes into force with effect from March 31, 2026 superseding paras 2.2(a), 2.2(b) and 2.3(c) of the circular.
* **Depositories' Responsibilities:**
* Amend relevant bye-laws, rules, and regulations immediately.
* Bring the provisions of this circular to the notice of their DPs and disseminate the same on their website.
* Put in place appropriate systems and procedures to give effect to the provisions within 75 days, and implement the provisions after user testing within 90 days from the date of issuance of this circular.
**Impact Analysis**
**Depositories**
* **Impact:** Required to update their systems, rules, and regulations to align with the new guidelines for BSDA eligibility and reporting.
* **Action Required:** Amend bye-laws and rules, disseminate the circular to DPs, and implement the necessary systems and procedures within the stipulated timelines.
**Depository Participants (DPs)**
* **Impact:** Need to implement the changes related to BSDA eligibility reassessment, valuation of securities, and obtaining consent from beneficiary owners.
* **Action Required:** Reassess BSDA eligibility quarterly, obtain consent from BOs for regular demat accounts, and update systems to reflect changes in valuation methods.
**Beneficial Owners (BOs)**
* **Impact:** Existing BOs need to provide consent to continue with regular demat accounts instead of BSDA. New BOs are impacted by eligibility rules for BSDA accounts.
* **Action Required:** Provide consent through authenticated and verifiable channel if they wish to continue with a regular demat account instead of a BSDA.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The primary regulator issuing the circular and overseeing the securities market.
Facility for Basic Services Demat Account (BSDA): The demat account type that is the subject of the policy, impacting eligibility and conditions.
Depositories Act, 1996: The act that empowers SEBI to protect investors and regulate the securities market, referenced as the basis for the circular.
All Depository Participants (DPs): Entities that must implement the changes detailed in the circular, handling demat accounts.
CIRCULAR
HO/38/11/11(3)2025-MIRSD-POD/I/1101/2025 December 24, 2025
To,
All Depositories
All Depository Participants (DPs) through Depositories
Madam / Sir,
Subject: Ease of investments and ease of doing business measures – enhancing
the ‘Facility for Basic Services Demat Account (BSDA)’
1. SEBI, vide circular no. SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/91 dated June
28, 2024 (‘the circular’), specified provisions related to enhancing the facility of
BSDA to boost investor participation in securities market. SEBI received
stakeholder inputs for further enhancing the facility of BSDA.
2. Thus in order to provide ease of doing business to the depository participants (DPs)
and ease of doing investments for the investors, it has been decided to exclude the
following securities for reckoning the threshold for BSDA
2.1. Zero Coupon Zero Principal (ZCZP) bonds
2.2. Delisted securities
3. The valuation of the illiquid securities shall be at last closing price for calculating
the threshold for BSDA; and
4. DPs shall now be required to reassess the BSDA eligibility every quarter.
5. DPs shall require the beneficiary owner to submit consent to avail / continue to
avail the facility of a regular demat account by active consent through a verifiable
channel as specified by the Depositories.
6. The effect of this circular shall replace paras 2.2(a), 2.2(b) and 2.3(c) of the circular,
which stand modified as under:
Para 2.2(a)
The DPs shall open only BSDA for Beneficial Owners (BOs), if such demat
accounts are eligible for BSDA as per para 2.1 above, unless such BOs specifically
Page 1 of 3provide their consent through authenticated and verifiable channel to avail the
facility of a regular demat account.
Para 2.2(b)
The DPs shall also reassess the eligibility of all the existing BOs with respect to
BSDA as provided in para 2.1 above at the end of every quarter and shall convert
all such eligible demat accounts into BSDA unless such BOs specifically provide
their consent through authenticated and verifiable channel, as specified by
Depositories, to continue to avail the facility of a regular demat account.
Para 2.3(c)
The value of holding shall be determined by the DPs on the basis of the daily
closing price or NAV of the securities or units of mutual funds, as the case may be.
Where such price is not available, the last traded price may be taken into account.
For unlisted securities other than units of mutual funds, face value may be taken in
to account. For illiquid securities, last closing price may be taken into account. The
value of suspended securities, delisted securities and Zero Coupon Zero Principal
bonds may not be considered for the purpose of determining eligibility of demat
account as BSDA.
7. The provisions of this circular shall come into force with effect from March 31, 2026
in supersession of paras 2.2(a), 2.2(b) and 2.3(c) of the circular.
8. The Depositories are advised to:-
8.1. make amendments to the relevant bye-laws, rules and regulations for the
implementation of the above decision immediately, as may be
applicable/necessary;
8.2. bring the provisions of this circular to the notice of their DPs and also to
disseminate the same on their website; and
8.3. put in place appropriate systems and procedures to give effect to the provisions
made in this circular within a period of 75 days, and implement the provisions
after user testing within 90 days from the date of issuance of this circular.
9. This circular is being issued in exercise of powers conferred under section 11 (1)
of the Securities and Exchange Board of India Act, 1992 and section 19 of the
Page 2 of 3Depositories Act, 1996 to protect the interests of investors in securities and to
promote the development of, and to regulate the securities market.
10. This circular is available on SEBI website at www.sebi.gov.in under the category:
‘Legal → Circulars’.
Yours faithfully,
Aradhana Verma
General Manager
Market Intermediaries Regulation and Supervision Department
Tel. No. 022-2644-9633
Email id – aradhanad@sebi.gov.in
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