What Documents are Required to Open a Trading Account?

Opening a trading account requires you to go through a process called Know Your Client or KYC, which includes submission of key documents to the broker along with the account opening form. There are several documents required for opening a trading account and broadly can be classified like proof of identity, proof of residence, proof of income, etc. SEBI insists that customers adhere to all the documents required for opening a trading account and submit the same in duplicate and also carry originals for verification.

What Documents are Required to Open a Trading Account?

If we were to bucket the documents required for opening a trading account into categories, there are 5 sets of documents as under:

• Mandatory documents like PAN Card and Photograph
• Proof of Identity
• Proof of Residence
• Proof of Income (mandatory only for F&O trading activation)
• Bank mandate verification

Documents for proof of identity or POI

The Proof of Identity is meant to establish that you are actually who you claim to be. The following work is proof of identity.

• PAN Card (normally brokers insist on POI other than PAN card)
• Aadhar Card with the verifiable UID number
• Passport issued by the Government of India having minimum of 6 months to expiry
• Voter ID card
• Digital / Electronic Driving license issued by the RTO
• Valid identity card by the Central or State government with embedded photograph

Documents for proof of address

For proof of address, you can submit any of the below as documents required for opening a trading account. You must submit proof of correspondence address and permanent address. If these two are different, submit two sets of documents. Here is the list of documents accepted as proof of address or POA.

• Resident Indian Passport issued by Government of India
• Aadhar Card issued by the UIDAI
• Voter ID card issued by the election commission
• Ration card (there are varying opinions on accepting this)
• Driving license issued by an Indian state RTO
• Signed/Stamped Bank account statement or bank passbook front page
• Utility bills like electricity bill, MTNL bill or gas bill with link document

Documents for proof of income

Brokers do not insist on income documents unless you also want to activate F&O trading. As proof of income, you can submit any of the following documents.

• Copy of Income Tax Return (ITR) filed with the IT Department with Acknowledgement
• Annual income copy audited and certified by a CA
• Stamped, bank account statement of last 6 months
• Demat holding statement
• Salary Slip / Form 16

Few additional points to remember

While this sums up the documentation part for opening a trading account, there are a few points to remember. Since extant SEBI regulations encourage only bank transactions for your trading account, submit documents to verify your corresponding bank account mapped to your trading and Demat account. As stated earlier, you can give a copy of the canceled cheque with the name printed.

Alternatively, you can also submit a bank passbook with an IFSC code. Most brokers insist on a copy of the canceled cheque. Lastly, all documentary proofs must be submitted with originals for verification. In case you don’t have originals in any of the documents, such documents have to be mandatorily attested by a Notary Public or Gazetted Officer.

How can I check my trading account balance?

Your trading account balance can be checked by logging into your online trading account. You can go to the fund’s available section and you get the margins available in the trading account in the form of cash and also in the form of stock. This can be checked in the online account or through the Online Trading App. You can also call up the helpdesk or the customer care center of your broker to access this information after authenticating yourself.

How does a trading account work?

The trading account is the platform where transactions are executed on the stock exchange. You can buy and sell equities, futures, options, currencies, and ETFs using the trading account. When you place an order, it first goes into the order book and once it is executed it goes into the trade book. Trading account orders can only be canceled or modified as they are not executed. The trading account interfaces with a bank account and Demat account also.

Frequently Asked Questions

Do I need any additional documents for trading in F&O?

Under the current SEBI regulations, for trading in the F&O segments you need to submit documents to verify your income. The idea is to ensure that the trader has the capacity to take on financial risk in F&O. You can submit any of the documents below.

• Income Tax Return or ITR submitted to Income Tax Department
• Copy of annual income audited and certified by a CA
• Bank account statement of last 6 months
• Demat account holding statement
• Salary slip / copy of Form 16
• Net Worth certificate

Can I Submit my documents online?

Yes, you can submit documents online if you opt for Aadhar based authentication of your trading account. In this case, you don’t worry about attestation or taking printouts as long as your mobile number is mapped to your Aadhaar card. The online interface of the broker will automatically pick up information about you from the UIDAI Aadhar Card database. This is called Aadhaar-based eKYC. In this case, document submission is online, although in-person verification or IPV still has to be done.