How to Open a Demat Account in Nepal

Demat is the process of dematerializing the physical share certificates. A Demat account is an electronic account opened through depository participants that hold shares in electronic form. Think of it as a bank account, you are assigned a unique Demat account number through which you can apply or trade your shares. Demat account has been made mandatory in Nepal and now, people need to have a Demat account for any transaction in the share market. In this article, we are talking about How to open a Demat account in Nepal.

1. Find Depository Participant – DP

You need to find out the company that is providing the service. Usually, Depository participant’s service is given to Commercial banks, Investment banks, Mutual funds, Stockbrokers, and so on. Find out where it is convenient to open a Demat. It doesn’t matter from where you open the Demat account but it would be better to open the account from where you have the bank account.

2. Fill up the form and provide required documents

You will then be provided the Demat account opening form. You have to fill the form. You would require to submit a Nepali citizenship photocopy and a passport size photograph for the form. In the case of the minor, the guardian needs to submit a photo of the minor, a photocopy of the birth certificate, and a photocopy of the guardian’s citizenship.

3. Pay the fees and submit it

It only costs Rs 50 to open the Demat account and Rs 100 as the annual operating charge. You have to pay Rs 100 each year to renew the account. You can also open a Mero share account through which you can easily trade the shares online. You need to pay additional Rs 50 and fill up a form to activate your account in Mero share.

4. Verification and DEMAT account number

After the document being submitted to DP, they enter the information about the investor in CSDC.CSDC verifies the entry and then provides a verification letter. After the verification, the CDSC opens the Demat account and assigns the unique Demat account number to the investor and a checkbook.

5. Deposit your physical shares in your DEMAT account

After your Demat account has been set up, you need to take your physical share certificates to the place where you opened the Demat account. Then, you need to fill up a dematerialization request form with the correct signature and submit it. The physical shares would be now dematerialized and deposited in your account just like a bank account. If you sell the shares, your account would be debited from your account and if you purchase the shares, it would be credited.

Each family member needs to open the Demat account and one can open two Demat accounts at the most. It is mandatory to have a Demat account to buy and sell shares in the primary and secondary markets. So if you still don’t have a Demat, it’s time to open the account asap.

Note – If you have opened a DEMAT account and have not been using it for a long time, then make sure it is renewed. You need to renew your DEMAT account for the secondary market transactions. You can also apply for an automatic renewal system at your respective banks.

Like this Share Gyan for more share market information.

Documents Required for Opening BO/Demat Account

For Individuals

Completely filled up Application form (Annexure 12 of CDS Byelaws, 2068), with signature of the witnesses
A copy of guardianship certificate in case of minor
1 passport size photo of BO. (in case of minor: 1 copy of PP photo of guardian, 1 copy PP photo of minor)
A copy of citizenship certificate
A copy of NRN Certificate issued by Government of Nepal for Non-Residential Nepalese.
Agreement with Beneficial Owner as per Annexure 15 of CDS Byelaws,2068
It is mandatory to provide bank account details while opening a demat account
In case of individual, please provide following documents if you wish to add nominee in your DeMat account.
- A copy of citizenship certificate
- 1 passport size photo of nominee.

For Insitutions

Application form (Annexure 13 of CDS Byelaws, 2068)
A copy of Entity Registration Certificate and PAN certificate
A copy of Board Minute with decision to open the BO a/c
Power of attorney specifying the person authorized to operate the account
One copy of passport size photo of the account operator
Agreement with Beneficial Owner as per Annexure 15 of CDS Byelaws,2068
MOA (Memorandum of Association) and AOA (Article of Association)

For Clearing Members/Brokers

Application form (Annexure 13 of CDS Byelaws, 2068)
A copy of Entity Registration Certificate
A copy of Board Minute with decision to open the BO a/c
Power of attorney specifying the person authorized to operate the account
A copy of License for operation issued by SEBON
One copy of passport size photo of the account operator
Agreement with Beneficial Owner as per Annexure 15 of CDS Byelaws,2068
A copy of membership certificate received from Security Market (NEPSE)

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