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A DEPOSITORY account holder (beneficiary account) may freeze securities lying in the account for as long the holder wantsto. By freezing, the account holder can prevent unexpected debits or credits, or both, creeping into the account.

The following types of freeze facility available in the NSDL system may be availed of by submitting freeze instruction to the Depository Participant (DP) in the prescribed form.

Freeze for debits only

A demat account holder may freeze the account only for debits by submitting a freeze instruction to its DP. On execution of the freeze instruction by the DP, the status of the account will change to `Suspended for Debit'.

Further, no debits can be made in this account even if the account holder issues debit instruction, unless, of course, the account holder has issued `unfreeze' instruction.

However, during the period of freeze, the account holder will continue to receive credits such as bonus or credits arising out of any other corporate action.

Freeze for debits/credits

An account holder may freeze the account for debits as well as credits. If such instruction is issued, the status of the account will change to `Suspended for All' after the execution of the instruction.

Further, no debits and credits can be made in the account even if the account holder issues instructions, unless the account holder issues unfreeze instructions.

This facility is beneficial to clients who do not use their account for long periods. By freezing their account for debits and credits, they can avoid undue credits to their accounts in addition to preventing debits.

Freeze a particular ISIN

ISIN stands for International Security Identification Number. An account holder may freeze a particular ISIN (security of a specific company) from being debited from the account, without freezing the whole account.

If this type of freeze facility is used, all other securities in the account can be debited or credited but the securities under the specific ISIN will be frozen for debit.

The client will be able to use other securities lying in its demat account and also receive credits in the ISIN which has been frozen for debit. This facility will enable the account holder to segregate its holdings into trading and non-trading assets.

The account holder may freeze the ISINs that are not intended for sale and can prevent even accidental debits occurring in specified securities.

Freezing a specific number of securities

An account holder may freeze a specific quantity of a specific security in an account. Thus, this facility will enable the account holder to earmark some quantity of securities as "not for trade" within a specific security, without disturbing the movement of other securities in the account.

An account holder can freeze the account for any of the above-mentioned types by giving an appropriate instruction to its DP — forms for freeze/unfreeze are available with the DPs.

Such instructions have to be given to the DP at least one clear working day prior to the date of freeze. (for example, if the client wishes to freeze its account with effect from Friday, such instruction must be given latest by Wednesday).

The freeze is reflected in the Transaction Statement and is shown under the heading `Status' in the statement.

If a particular ISIN or certain specific number of securities are frozen in an account, the status of the account will remain `Active', but the securities or the ISIN frozen will be shown as a separate entry in the Transaction Statement indicating that these securities or ISINs have been frozen and cannot be debited.

On unfreezing, the status of the account will be shown as `Active' and on removing the freeze on the securities or the specific ISIN, the statement will show them as free balance in the account. A sample format of Transaction Statement showing different types of freezes is as follows:

Freeze facility on Speed-e: All the above-mentioned types of freeze/unfreeze facilities are also available to the account holders who have subscribed to SPEED-e facility offered by their DPs, with smart card authentication. These clients can freeze/un-freeze their accounts through the SPEED-e Web site. If this is done, only such account holder can unfreeze the account through SPEED-e.

Thus, once the client has frozen its account through SPEED-e, no debit transaction can be carried in the account until the account holder unfreezes the account using SPEED-e.

The freeze/unfreeze instructions given through SPEED-e will be directly applied on the depository system and the DP cannot override such freeze/unfreeze instructions.

(Sourced from the latest newsletter of the National Securities Depository Ltd (NSDL).

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