The Demat account is where your securities will be held digitally. To open a new Demat account, you have to  furnish the following documents :

• A passport-size photograph.
• A copy of your PAN card.
• Identity proof such as Aadhaar card, passport, voter ID card, driving license, PAN card or any other authorised photo identity.
• Address proof such as ration card, passport, voter ID card, driving license, bank passbook, electricity bill, self-declaration from the High Court or Supreme Court, identity card or address proof given by recognised authority.

After you submit the required documents and they are verified, and a Demat account will be  created.

What is a trading account?

A trading account is a bridge between your Demat and bank account. It is opened with a stock broker. When an investor buys a certain number of shares, the first step is to transfer the amount from the bank account to the trading account. After the money is credited, the transaction is initiated. A trading account is simultaneously created with the Demat account.  Similarly, when an investor sells a certain number of shares, the amount of the transaction is credited to the trading account. You have to submit the following documents to start a trading account:-

• A passport-size photograph.
• A copy of your PAN card.
• Identity proof such as Aadhaar card, passport, voter ID card, driving license, PAN card or any other authorised photo identity.
• Address proof such as ration card, passport, voter ID card, driving license, bank passbook, electricity bill, self-declaration from the High Court or Supreme Court, identity card or address proof given by recognised authority.

The KYC

The KYC, or Know Your Client, application form is an agreement between you and the broker. You have to provide them with the necessary information, which they will validate. Some important regulations that are applied to the KYC form that you must consider are:

• Common KYC form for all investment types registered at the stock exchange.
• Similar set of documents for KYC of all kinds of investment types.
• There are two different forms for individual and non-individual investors.
• Complete the KYC form in all respects and strike-off the blank fields.
• Do not sign an empty form.
• Cross out any page that you leave blank.
• Know the documents required to be submitted to your broker.

The Documents required with a KYC application form for opening of Demat Account

• Identity proof such as Aadhaar, Passport, Voter ID, Driving License, PAN or any other authorised photo identity.
• A latest passport-size photograph.
• Address proof such as Ration Card, Passport, Voter ID, Driving License, Bank Passbook, Electricity Bill, self-declaration from High Court or Supreme Court, or any other identity card, or Address Proof, issued by a recognised authority.
• Photocopy of your PAN card.

After you successfully submit the above form and documents, your broker will open a trading account in your name. You will then get a unique identity number known as a Client Code. You must use this quote for every trade that is carried out on your behalf by the broker.

Here are a few noteworthy points about a trading account:

• It takes nearly 2-3 working days for the trading account to reflect a transaction.
• Investors can create multiple Demat accounts and trading accounts.
• It is not compulsory to open both these accounts with the same broker or bank.
• Investors can open your own Demat account if the broker does not have the facility to do so.
• Investors must ensure that the form they submit to open their own account mentions their account details correctly.

Who are stock brokers?

An investor cannot directly buy or sell shares on a stock exchange. Registered members of a stock exchange are called stock brokers. They trade on an investor’s behalf. They are either an independent service provider, or employed at a brokerage firm. It is ideal for them to have the required qualification and experience in the field of finance. A broker in the stock market scenario is also called a Trading Member.

A stock broker is familiar with the formalities of market and hence, you may depend on their judgment and knowledge. They can enable you to make the right decisions in the market.

Here’s what a broker can do for you:

1. Guide and representative you at the stock market.
2. Buy and sell stocks.
3. Provide right information about the investment options available at the stock market.
4. Provide correct information on shares and their prices obligatorily.
5. Inform you about appropriate market moves.

In case you are dissatisfied with the services of your broker, you may file a complaint with SEBI under the Arbitration Laws.