Demat Account Nomenclature for Stock Brokers — The Six Permitted Categories
SEBI requires stock brokers to maintain demat accounts only under six specified categories with appropriate nomenclature to reflect the purpose of each account. Bank accounts and Demat accounts maintained by all stockbrokers shall have appropriate nomenclature to reflect the purpose for which those bank/demat accounts are being maintained. This article explains the six permitted categories, the tagging requirements, and the consequences of non-compliance.
The Regulatory Basis
SEBI Circular SEBI/HO/MIRSD/MIRSD_DPIEA/P/CIR/2022/83 dated June 20, 2022 mandated uniform nomenclature to be followed by stock brokers for Naming/Tagging of Bank and Demat Accounts to reflect the purpose for which those bank/demat accounts are being maintained. Subsequent circulars expanded the categories.
The Six Permitted Demat Account Categories
Stock brokers are required to maintain demat accounts only under the following six categories:
| S. No. | Demat Account Category | Purpose | Suffix |
|---|---|---|---|
| 1 | Proprietary Account | Hold Own Securities | PROP |
| 2 | Pool Account | Settlement Purpose | POOL |
| 3 | Client Unpaid Securities Pledge Account | For pledging of Unpaid Securities of Clients | CUSPA |
| 4 | Client Securities Margin Pledge Account | For Margin obligations to be given by way of Pledge/Re-pledge | CSMPA |
| 5 | Client Securities under Margin Funding Account | Hold funded securities in respect of margin funding | CSMA |
| 6 | Client Nodal MFOS Account | For subscription/redemption of MFOS units | CNMA |
Source: NSDL Circular No. NSDL/POLICY/2025/0138
Nomenclature Requirements
1. Proprietary Account
- Purpose: Hold Own Securities.
- Nomenclature: "Name of Stock Broker — Proprietary Account".
- Suffix: PROP.
2. Pool Account
- Purpose: Settlement Purpose.
- Nomenclature: "Name of Stock Broker — Pool Account".
- Suffix: POOL.
3. Client Unpaid Securities Pledge Account
- Purpose: For pledging of Unpaid Securities of Clients.
- Nomenclature: "Name of Stock Broker — Client Unpaid Securities Pledge Account".
- Suffix: CUSPA.
4. Client Securities Margin Pledge Account
- Purpose: For Margin obligations to be given by way of Pledge/Re-pledge.
- Nomenclature: "Name of Stock Broker — Client Securities Margin Pledge Account".
- Suffix: CSMPA.
5. Client Securities under Margin Funding Account
- Purpose: Hold funded securities in respect of margin funding.
- Nomenclature: "Name of Stock Broker — Client Securities under Margin Funding Account".
- Suffix: CSMA.
6. Client Nodal MFOS Account
- Purpose: For subscription/redemption of MFOS units.
- Nomenclature: "Name of Stock Broker — Client Nodal MFOS Account".
- Suffix: CNMA.
Tagging Requirements
Deadline for Tagging
All demat accounts maintained by stock brokers should be appropriately tagged. The following timeline applied:
- July 01, 2022: Credit of securities shall not be allowed in any demat account left untagged.
- August 01, 2022: Debit of securities shall also not be allowed in any demat account left untagged.
Consequences of Non-Tagging
- Credits: Credits on account of corporate actions shall be permitted.
- Debits: Debit of securities shall also not be allowed in any demat account left untagged from August 01, 2022.
Permission for Tagging
Stock Broker shall obtain permission from Stock Exchanges to allow tagging of such demat accounts from August 01, 2022 onwards. Stock Exchange shall grant such approval within two working days after imposing penalty as per their internal policy.
Exemptions
The framework shall not be applicable for the demat accounts which are used exclusively for banking activities by stock brokers which are also banks.
Naming Proprietary Accounts
Naming proprietary bank accounts of the stock broker as 'Stock Broker — Proprietary Account' is voluntary. All accounts which are not tagged would be deemed to be proprietary.
How We Help
At Anuj Desai & Associates, we help stock brokers implement the demat account nomenclature framework, tag accounts appropriately, and ensure compliance with SEBI's requirements. If you need assistance with demat account compliance, reach out to our regulatory compliance desk.