One person has been filling in from 50-60 accounts. IPO HIMANCHAL (name changed) has brought photocopies of citizenship of his brothers, sisters and friends in the village. He opened a demat account and a broker account in his name. He assured that if the photocopy of citizenship was for men, it would be his own. If he is a woman, he takes his wife and assures her that he is a person. The purpose of opening a demat account was to fill the IPO in the name of everyone and take the profit from the sale in the secondary market. Many people like Himachal are now cultivating IPO. One person has filed IPO in the name of 50-60 people. A demat account is required to fill an IPO. You can apply for IPO online from home.
Purna Prasad Acharya, CEO of CDS & Clearing, said that there are many complaints that others have opened demat accounts in their own names and paid for IPOs. "There are thousands of such complaints, especially those that have been misused by their own relatives by opening a demat account. The issues are not being addressed," he said. Therefore, action cannot be taken, 'Acharya told Sethopati. If the aggrieved party files a case and goes to court, the person operating the demat account in the name of others will be prosecuted for banking offenses. Following the direction of CDSC, many DPs have started opening demat accounts only in the presence of individuals. But the DP does not have the ability to tell whether the person who came to open the account with a photocopy of citizenship is the same or not. There is a provision to renew demat account every year. There is no need to be present for the renewal, there is also an arrangement to renew by paying the fee online.
Lately, IPO cultivators have been a bit shocked. At present, the number of demat account openers is 3 million 41 thousand, but the number of people filling IPO is only 1.5 million on average. This means that many demat accounts already opened are now inactive. A person is not allowed to open more than two such accounts. According to CDSC, only 170,000 people have opened two accounts.
Complaints to the CDSC show that there are still plenty of IPO cultivators. Now, CDSC is working in such a way that it cannot cultivate IPO by opening demat account in the name of others, said CEO Acharya. Now when opening a demat account, DP is developing separate software to fill in the details of its customers.
"We are going through the bidding process by preparing the specifications required for software development," said Acharya. Once the specification is ready, the DPs are linked to the CDSC. He said that there will be no hassle of filling up KYC forms again and again after the centralized KYC details are available. He also said that the system is ready to use artificial intelligence to detect whether the person's citizenship photo and the person present are the same.
"If the citizenship photo and the person present are not the same, you cannot open a demat account," said Acharya. Not only that, the renewal of all the demat accounts opened earlier will also be done through the same arrangement.
If the device indicates that the photo of the citizen and the person opening the demat account are not the same, the demat account of that person will not be renewed. This means that the demat account will be renewed only after identifying the person.
"Even those who currently have a demat account will be updated with the new system. It will not be able to fill an IPO in the name of others," he said. Acharya said that CDSC is working to fully implement it in a year. The Securities Distribution Guideline says that everyone should be given 10 shares by the time they reach, otherwise they should choose from the round. If it reaches more than 10 lots, the number of shares to be divided by that number will have to be given to everyone.
The directive aims to consolidate scattered capital and establish a principle of proportionality in distribution. According to the guideline, when you apply in the name of many people, everyone gets 10-10 lots until they reach, but if they don't get enough, even if they go round, it can happen to some people. Securities and Exchange Board officials say that the cultivation of IPO has flourished due to this belief. The board claims that the number of farmers cultivating in the name of others will come down as IPOs can also be issued with an additional premium.
