Demat Account - Dematerialized Account Demat account is the place to hold shares electronically, earlier the shares were transacted physically in the form of papers as certificates. Demat account is necessary to do trading in the stock market, along with demat account you must have trading and bank account. If all the three accounts are at the same depository participants the transactions become more feasible and simpler. Demat account act as a trust to hold your shares the custody of which lies with the bank or the broker firm where the account is opened It helps in keeping a track of shares transactions including sales, purchase, no. of units, price etc. Amount to buy the shares is deducted from the linked bank account and goes into the trading account where the purchasing takes place and from there it goes to demat account where the units of shares are hold in electronic form. And the same procedure is repeated in case of selling of the shares just the vice-versa. Documents Required- PAN card, Aadhar card, Passbook/Cheque/ Bank account statement, Passport size photo Charges Involved in Demat account – Account opening charge, Yearly maintenance charge, brokerage charge Advantages of Demat System- Easy and convenient way to hold securities Reduced paperwork for transfer of securities  It ensures transfer settlements and reduces delay in registration of shares. It ensures faster communication to investors.  It ensures faster payment on sale of shares. Disadvantages- For dematerialized securities, the role of key market players such as stock-brokers needs to be supervised as they have the capability of manipulating the market Agreements are entered at various levels in the process of dematerialization. These may cause worries to the investor desirous of simplicity. Thank you for Watching Subscribe to DevTech Finance for more videos

1. DEMAT ACCOUNT
DEVTECH FINANCE

2. INTRODUCTION
• Demat Account- Dematerialized account
• Dematerialization is the process of converting physical records of investment into
electronic records.
• Earlier, share certificates were issued on purchase of shares which is now converted
into electronic form. Thus, A Demat Account is an account that allows investors to hold
their shares in an electronic form.
• Every shareholder should have a Dematerialized account for the purpose of trading in
securities.
• Access to the Dematerialized account requires a Login Id and password which is
provided on account opening

3. FUNCTIONING
Bank
A/c
Demat
A/c
Trading
A/c
Shares Sold
Amount Deposited
Shares Purchased
Amount Deducted
Purchased Shares
Shares Deposited
Sold Shares
Shares Transferred
Stock
Market
Electronic presence
of units of Shares
Transactions of
shares

4. OPENING OF DEMAT ACCOUNT
• Demat Account is just like a bank account that helps you keep track of all share
transactions
• In order to trade in securities investors must fill in a Demat Request Form (DRF),
which is available with the Depository Participants( Banks, Brokers firm) and submit.
• Depository
Participants
Banks Brokers Firm
Full Service
Brokers
Discount
Brokers

5. CONTINUED
• Documents Required- PAN card, Aadhar card, Passbook/Cheque/ Bank account
statement, Passport size photo
• Charges Involved in Demat account – Account opening charge, Yearly
maintenance charge, brokerage charge
• Every security has an ISIN (International Securities Identification Number) and a
separate DRF must be filled for every ISIN.
• Demat accounts are maintained by NSDL(National Securities Depository
Limited) and CDSL(Central Depository Services Limited) and the banks act as
custodian / intermediary to facilitate trading in stock.

6. COMPARISON
ADVANTAGES
• Easy and convenient way to hold securities
• Reduced paperwork for transfer of securities
• It ensures transfer settlements and reduces
delay in registration of shares. It ensures
faster communication to investors. It ensures
faster payment on sale of shares.
• It ensures greater profit due to increase in
volume of trading.
DISADVANTAGES
• For dematerialized securities, the role of key market
players such as stock-brokers needs to be
supervised as they have the capability of
manipulating the market.
• Multiple regulatory frameworks have to be conformed
to, including the Depositories Act, Regulations which
leads to doubt on the ownership of shares
• Agreements are entered at various levels in the
process of dematerialization. These may cause
worries to the investor desirous of simplicity.

7. DEVTECH FINANCE
THANK YOU FOR WATCHING