uTrade AlgosNo, a minor cannot be a joint holder in a Demat account as per SEBI regulations. However, a minor can have a Demat account in their name, operated by a guardian, and a trading account can be opened under specific conditions.
Why Can’t a Minor Be a Joint Holder?
As per SEBI guidelines, financial transactions require legal capacity, which minors do not have. Since a Demat account involves contractual obligations, a minor cannot be a joint holder of it. The Demat account of a minor must be managed by a parent or legal guardian until they turn 18.
Trading Account for Minors – Limited Purposes Only
A trading account in the minor’s name can only be opened for the sole purpose of selling securities that the minor has acquired through:
- Investment in IPOs
- Inheritance
- Corporate Actions (such as stock splits, dividends, or bonuses)
- Off-market transfers under specific conditions, including:
- Gift or donation
- Transfers between family members
- Implementation of government or regulatory directions/orders
The minor cannot engage in intraday trading, derivatives, or other speculative activities. Once the minor turns 18, they must convert the account into a regular trading and Demat account.