Premium Essay

Demat

In: Other Topics

Submitted By balasuresh
Words 1644
Pages 7
DEMAT

Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form.

Rematerialization is the process of converting securities held in electronic form in a demat account back in physical certificate form.

According to the Depositories Act, 1996, an investor has the option to hold securities either in physical or electronic form. Part of holding can be in physical form and part in demat form. However, SEBI has notified that settlement of market trades in listed securities should take place only in the demat mode.

All types of equity/ debt instruments viz. equity shares, preference Shares, partly paid shares, bonds, debentures, commercial papers, certificates of deposit, government securities (G-EC) etc. irrespective of whether these instruments are listed / unlisted / privately placed can be dematerialized with depository, if they have been admitted with the depository.

The depository system, which links the issuers, depository participants (DPs), Depositories and Clearing Corporation/ Clearing house of stock exchanges, facilitates holding of securities in dematerialised form and effects transfers by means of account transfers. This system which facilitates scripless trading offers various direct and indirect services to the market participants.

A depository is an organisation which holds securities (like shares, debentures, bonds, government securities, mutual fund units etc.) of investors in electronic form at the request of the investors through a registered depository participant (DP). It also provides services related to transactions in securities. The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.

It can be compared with a bank, which holds the funds for depositors. A bank - depository analogy is given in the following table:…...

Similar Documents

Premium Essay

Registration

...facility for scrip only through DSE Clearing House on T+1, T+3 basis). "A" and "DA" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software. [pic] The above cycle is valid for A, B, G & N category instruments traded in Public, Block & Odd-lot market. B Group: Number of Instruments are 44(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "B" and "DB" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. G Group: Number of Instrument is 0 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "G" and "DG" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. N Group: Number of Instrument is 11(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "N" and "DN" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. Z Group: Number of Instruments are 34(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+9 basis). "Z" and "DZ" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. [pic] This cycle is valid only for Z group instruments......

Words: 7488 - Pages: 30

Premium Essay

Technology and Indian Banking Sector

...multiple systems with varying service levels to nation-wide uniform and standard business process for all retail payment systems. Also it helps to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion. Mobile Banking: Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.) is a term used for performing balance checks, account transactions, payments, credit applications etc. via a mobile device such as a mobile phone or Personal Digital Assistant (PDA). Dmat Card: The demat account has to be treated virtually like a account with the difference being that instead of actual cash there are shares in the account. A beneficiary account is an account opened by the investors or broker with a Depository Participants (DP) of his choice, to hold shares in detmaterialised (demat) form and undertake scripless trading. The investors must open a demat account with a DP. Opening a demat account Conclusion: Use of technology in expanding banking is one of the key focus areas of banks. The banks in India are using Information Technology (IT) not only to improve their own internal processes but also to increase facilities and services to their customers. Efficient use of technology has facilitated accurate and timely management of the increased transaction volume of banks of that comes with larger customer base. By designing and offering simple, safe and secure technology, banks reach at doorstep of customer with......

Words: 3234 - Pages: 13

Premium Essay

Kkllllll

...1. Separate trading account and demat account needed for trading in e-gold. 2. Not the best way to invest in terms of tax. It treated as physical gold for taxation. 3. Newly launched product in India. Commodity exchanges are not well regulated like stock exchanges. * Gold ETFs Pros 1. Units are backed by corresponding units of physical gold which are kept in secured vaults. 2. Returns close to that of e-gold. 3. Long term capital gains tax of 10% without indexation or 20% with indexation kicks in after 1 year. No wealth tax applies. Cons: 1. Trading account and demat account needed for buying ETFs. * Gold mutual fund Pros 1. Through Systematic Investment Plan (SIP) of gold mutual funds one can affordably have disciplined investment in gold. One can invest as little as Rs 100 every month in gold funds. 2. Long term capital gains tax of 10% without indexation or 20% with indexation applies after 1 year. No wealth tax applies. Cons 1. Expense ratio is higher than in gold ETFs. 2. Returns slightly lower than that of gold ETFs depending on fund’s performance. * Physical gold Cons 1. Banks charge premium is charged on gold bars and coins. Reselling them is difficult. 2. Storage costs and making charges involved. Issue of safety is also large. 3. Most unfavourable way in terms of tax. Long term capital gains tax of 20% with indexation applies only after 3 years of buying it. It attracts wealth tax. Conclusion: If you own a demat account gold ETFs are the best......

Words: 402 - Pages: 2

Free Essay

Demat

...DEMAT ACCOUNT What is Demat Account?  Demat account is mandatory for trading and investing of shares. Demat refers to dematerialized account. Demat Account is a safe secure and convenient way where you can buy and sell the shares without any paper work and all the things will be taken care by the DP (Depository Participants).If you have demat account you need not to show any kind of physical certificate that you have these shares. How to Open a Demat account?  To open a Demat account you have to approach DP and he will be guided you the official procedure to open an account.To see who the register DP is, you can visit NSDL and CDSL website .You can choose the DP of your own choice. On opening a demat account, a unique BOID (Beneficial Owner Identification) Number is allotted, which should be quoted in all future transactions.You can open a Demat account with no balance of shares, there is no minimum balance is required Documents required for opening a Demat Account?   1) To open a demat account you have to fill demat request form  2) One Passport size photograph, proof of address like Voter ID card, electricity bill or Ration Card, Employee ID Card, Bank attestation and Latest IT Return 3) Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer / their R&T Agent. 4) Deface the share certificate(s) you want to dematerialize by writing across Surrendered for dematerialization  5) After dematerialization, your depository......

Words: 415 - Pages: 2

Premium Essay

Types of Bank Accounts

...All of finweb.com ------------------------------------------------- Top of Form Bottom of Form * Mortgage * Loans * Banking & Credit * Investing * Retirement * Insurance * Taxes * Financial Planning * Real Estate * Finance Directory home → Banking & Credit → Banking & Credit 101 → 4 Types Of Bank Accounts Explained Subscribe to news about Banking & Credit  4 Types Of Bank Accounts Explained  Share  comments There are many types of bank accounts for consumers to choose from and each will be able to provide benefits for his or her circumstances. Ads by Google Open A Demat Account Get a Demat, Savings, Trading & MF All-in-1 Kotak Account. Sign Up! www. KotakSecurities. com Checking Account A checking account offers a quick and convenient way for people to access their money as often as they need. You cannot earn interest with most checking accounts, however. Savings Account A savings account offers a simple, hassle-free way to save money. Banks usually set a minimum balance to open and/or maintain these types of bank accounts. The benefit of a savings account over a checking account is that money in the account accrues interest. The downside is that the number of allowable transfers or withdrawals is limited. Money Market Account A money market account combines the benefits of a checking account and a savings account. You can withdraw funds from the account, and you benefit from a high......

Words: 497 - Pages: 2

Free Essay

Quiz on Current Affairs

...Business Quiz Q1. What was founded by Herb Kelleher in 1973 in Dallas, Texas, USA?(South West Airlines). Q2. Big Blue is IBM. Which corporate is referred as 'Big Black' ?(UPS). Q3. Who founded the Amul milk co-operative in Gujarat in the year 1902?(Tribhuvandas Patel) Q4.Who is known as the 'Father of Mustang', a famous brand of car?(Lee Iococca)FMCG & Textile :Q1. Coke ventured into Dairy Products in India this year. Name the product? (Maaza Milky)Q2. Which company dropped its new logo within one week?(GAP)Q3. “Hartmax” a custom suit supplier to president Obama was recently acquired by an Indian suitings company following its Bankrupt. Name the Company(S.Kumars)Stock MarketQ1.Demat is the acronym for................???(Dematerialisation)Q2.What is the name of two share depositories in India?(NSDL and CSDL)Q3.Stock split increases a company's equity capital. True or false?(false)Q4.Which is the first foreign company listed on NYSE.(Sony).Q5. DAX is Acronym of which Stock Exchange?(Frankfurt Stock Exchange) Q6.Name the first public sector share quoted on BSE.(HPCL). | BankingQ1. What is known as the cost of living index which represents the goods and services purchased by consumers?(Consumer Price Index)Q2. Which financial services giant is referred as the "Thundering Herd"?(Merill Lynch)Q3. What is the exchange rate of one currency for another over a fixed period of time called?(Swap or Currency Swap)Q4. Recently WPI was changed base year from 93-94 level to which......

Words: 319 - Pages: 2

Premium Essay

Haha

...trading yourself then you can go for online trading. For online trading you need computer, Internet connection, demat and trading account. Demat account and trading accounts are must for trading in stock market. Offline stock trading - In this method the orders will be placed by the broker on your behalf. Means you have to tell your broker which stocks to buy and sell and based on your instruction he carries out transaction.  In this method you don’t need any computer and internet connection. More details about online trading Opening Demat account and trading account - Demat account is must if you want to do stock trading or investment. Use of demat account - Demat account is used to keep your stocks in electronic format. Now days as there are no any physical shares in paper form, everything is stored electronically so Demat account is required. Trading account - Trading account is required to do buying and selling of stocks. In today’s markets there are lots of brokers with whom you can open the account. DEMAT: Demat account is a safe and convenient means of holding securities just like a bank account is for funds. Today, practically 99.9% settlement (of shares) takes place on demat mode only. Thus, it is advisable to have a Beneficiary Owner (BO) account to trade at the exchanges. Bank Account Vs Demat Account    S. No. | Basis Of Differentiation | Bank Account | Demat Account | 1. | Form of Holdings/Deposits | Funds | Securities | 2. | Used for | Safekeeping of......

Words: 8907 - Pages: 36

Premium Essay

Markets

... say Nifty. The APs deliver the shares comprising the Nifty, in the same proportion as they are in the Nifty, to the AMC and create ETF units in bulk (These are known as Creation Units). Once the APs get these units, they provide liquidity to these units by offering to buy and sell through the stock exchange. They give two way quotes, buy and sell quote for investors to buy and sell the ETFs. ETFs therefore have to be listed on stock exchanges. There are many ETFs presently listed on the NSE. 3.2 SALIENT FEATURES An Exchange Traded Fund (ETF) is essentially a scheme where the investor has to buy/ sell units from the market through a broker (just as he/ he would by a share). An investor must have a demat account for buying ETFs (For understanding what is demat please refer to NCFM module ‘Financial Markets : A Beginners’ Module). An important feature of ETFs is the huge reduction in costs. While a typical Index fund would have expenses in the range of 1.5% of Net Assets, an ETF might have expenses around 0.75%. In fact, in international markets these expenses are even lower. In India too this may be the trend once more Index Funds and ETFs come to the market and their popularity increases. Expenses, especially in the long term, determine to a large extent, how much money the investor makes. This is because lesser expenses mean more of the investor’s money is getting invested today and over a longer period of time, the power of compounding will turn this......

Words: 1846 - Pages: 8

Premium Essay

Ipo-Indian Perspective

...of the paid up capital. 5. The company should have a dividend paying track record for the last 3 consecutive years and the minimum dividend should be at least 10%. 6. Minimum 25% of the company's issued capital should be with Non-Promoters shareholders as per Clause 35 of the Listing Agreement. Out of above Non Promoter holding no single shareholder should hold more than 0.5% of the paid-up capital of the company individually or jointly with others except in case of Banks/Financial Institutions/Foreign Institutional Investors/Overseas Corporate Bodies and Non-Resident Indians. 7. The company should have at least two years listing record with any of the Regional Stock Exchange. 8. The company should sign an agreement with CDSL & NSDL for demat trading. [III] Minimum Requirements for companies delisted by this Exchange seeking relisting of this Exchange The companies delisted by this Exchange and seeking relisting are required to make a fresh public offer and comply with the prevailing SEBI's and BSE's guidelines regarding initial public offerings. [IV] Permission to use the name of the Exchange in an Issuer Company's prospectus The Exchange follows a procedure in terms of which companies desiring to list their securities offered through public issues are required to obtain its prior permission to use the name of the Exchange in their prospectus or offer for sale documents before filing the same with the concerned office of the Registrar of Companies. The Exchange has since...

Words: 9784 - Pages: 40

Premium Essay

Term Paper on Kotak Securities

...the trading volumes on the Exchange showed robust growth. The Exchange provides an efficient and transparent market for trading in equity, debt instruments and derivatives. The BSE’s online trading system (BOLT) is a proprietary system of the Exchange and is BS 7799-2-2002 certified. The surveillance and clearing & settlement functions of Exchange are ISO 9001-2000 certified. DEPOSITORY SYSTEM Depository system essentially aims at eliminating voluminous and cumbersome paper work involved in the script-based system and offers scope for ‘paperless’ trading through state ofthe- art technology. Depository system enables conversion of physical securities in the electronic form through a process of’ dematerialization’ (also known as ‘demat’) of share certificates and facilitates share transactions and transfers electronically without involving any share certificate or transfer deed. Depository system offers option for converting the shares from electronic form to physical or paper from through a process of ‘rematerialization’ (also known as ‘remat’). Depositories in India 1. National Securities Depository Limited(NSDL) It is an organization promoted by UTI and National Stock Exchange of India Ltd. The aim is to provide facilities for holding and handling securities in electronic form. Subsequently, SBI (acquired a 4.76 per cent in NSD) , HDFC. Bank, Deusche bank, Dena Bank, Canara Bank, Global Trust Bank, Standard Chartered bank, Citibank NA and HSBC have......

Words: 15423 - Pages: 62

Premium Essay

Demat Sale Shares

...[pic] FINAL REPORT ON EXECUTIVE TRAINING [pic] TITLE: To sell 24 Demat accounts worth Rs.2,00,000/- for 3 months for Sharekhan Limited in Nagpur city. GUIDED BY- Mrs. Parijad Dongure MR. CHIRAG JOSHI (Faculty Guide) (Company Guide) SUBMITTED BY: AJEET KUMAR Enroll. No.: 8NBNG010 Summer Internship Program 2009 The MBA Program 2008-2010 ICFAI National College, SIP Centre Nagpur CERTIFICATE This is to certify that the Final Report on Executive Training with special reference to the company SHAREKHAN LIMITED submitted by AJEET KUMAR having Enrollment No. as 8NBNG010 during Semester-III of the M.B.A Program (Class of 2008-10) embodies original work done by her. His work has been satisfactory. Mr. Chirag Joshi Mrs. Parijad Dongure (Company Guide) (Faculty Guide) ACKNOWLEDGEMENT My due acknowledgement to all those people who have helped me during my SIP. This includes my respected Company Guide Mr. Chirag Joshi, Faculty Guide Mrs. Parijad Dongure, INC faculty, Office Personals, and Clients. My SIP would not have been possible without the guidance, support and encouragement...

Words: 5953 - Pages: 24

Premium Essay

Demat

... Our project on “Demat System in India” gave us a detailed picture of how securities are transferred electronically in the share market. In our project we had done a comparative study of the various Depository Participants in Ahmedabad on the basis of their services and charges. This study helped us in finding out what additional services other DPs provide and how the charges differ. Another aspect of our project was to get a feedback from the clients regarding the Demat services provided at Anagram Securities Ltd. By meeting the various clients we were able to find out the scope of improvement in the services provided at Anagram. It becomes increasingly important for students of management to understand the developments in the financial infrastructure that facilitates the whole financial system. We were fortunate enough to get an opportunity to do our summer training in such an area as it gave us a wide understanding of the entire demat system in our country. Table of Contents Acknowledgement Executive Summary Certificates 1) Scope of the Project ………………………………………………………………………………………....5 2) About Anagram Securities Ltd ………………………………………………………………………..9 3) Demat System in India…………………………………………………………………………………...14 4) Comparative Study of DPs in Ahmedabad ……………………………………………………38 5) A Clients’ Perspective …………………………………………………………………………………...46 6) Demat System – Problems and...

Words: 16654 - Pages: 67

Premium Essay

A Study on Commodity Market for Share Khan Ltd

...delivery if one book closure is missed. * Faster settlement cycle: The exclusive demat segments follow rolling settlement cycle of T+2 i.e. the settlement of trades will be on the 5th working day from the trade day. This will enable faster turnover of stock and more liquidity with the investor. * Faster disbursement of non cash corporate benefits: NSDL provides for direct credit of non cash corporate entitlements like rights, bonus etc to an investor's account, thereby ensuring faster disbursement and avoiding risk of loss of certificates in transit. * Low brokerage for trading in dematerialized securities Brokers provide this benefit to investors as dealing in dematerialized securities reduces their back office cost of handling paper and also * Eliminates the risk of being the introducing broker: Elimination of problems related to address Change, Transmission etc * In case of change of address or transmission of demat shares, investors are saved from undergoing the entire change procedure with each company or registrar. Investors have to only inform their DP with all relevant documents and the required changes are effected in the database of all the companies, where the investor is a registered holder of securities. * Elimination of problems related to selling securities on behalf of a minor. A natural guardian is not required to take court approval for selling demat securities on behalf of a minor.   I. Company Profile : Sharekhan......

Words: 10211 - Pages: 41

Premium Essay

Report

...Block & Odd-lot Market with trade for trade settlement facility for scrip only through DSE Clearing House on T+1, T+3 basis). "A" and "DA" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software. • B Group: Number of Instruments are 44(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "B" and "DB" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. • G Group: Number of Instrument is 0 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "G" and "DG" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. • N Group: Number of Instrument is 11(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). "N" and "DN" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. • Z Group: Number of Instruments are 34(Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+9 basis). "Z" and "DZ" are marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software. Here is the summary of Dhaka Stock Exchange Limited in a table format. We can easily have an idea about the......

Words: 5235 - Pages: 21

Premium Essay

Invite Friends

... | |[pic]Day Traders- Do you make several trades each day? We can save brokerage by 90%. Just leave your number & we'll take care of the rest. | | | | | | | | Sharekhan Stock Trading, Sharekhan Demat, Sharekhan Brokerage and Reviews | | | |[pic] | | | |[pic] | |Sharekhan is online stock trading company of SSKI Group, provider of......

Words: 2951 - Pages: 12