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A project report on awareness and accessing behavior of demat account

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A project report on awareness and accessing behavior of demat account

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A project report on awareness and accessing behavior of demat account

  1. 1. Projectsformba.blogspot.com PROJECT REPORT ON “A study on awareness and accessing Behavior of Demat Account in Pune” Prepared for Unicon Securities Pvt. Ltd. Submitted to ISCS, Pune In partial fulfillment of the requirement of PGP Program Submitted by INDIRA SCHOOL OF CAREER STUDIES 1
  2. 2. Projectsformba.blogspot.com CERTIFICATEThis is to certify that ……………… has successfully completed his two monthsproject titled “A Study Of awareness and accessing behviour of Demat Account inPune ” at Unicon Securities Pvt. Ltd., Pune during the academic year 2009- 2011 inpartial fulfillment of the requirement of PGP at Indira School Of Career Studies,Wakad, Pune. 2
  3. 3. Projectsformba.blogspot.com DECLARATIONThis is to certify that the project report is entitled in “A Study Of awareness andaccessing behviour of Demat Account in Pune ” is submited to ISCS, Wakad inpartial fulfillment of the requirement for the degree of PGP + MBA (SMU), is anoriginal work .The matter embodied in this project is a genuine work done by me andhas not been submitted whether to this university or any other university /institute forthe fulfillment of the requirement of any course of study.I guarantee that this project report has not been submitted for the awards to any otheruniversity for degree, diploma or any other such prizes. 3
  4. 4. Projectsformba.blogspot.com ACKNOWLEDGEMENTIt is my pleasure to be indebted to various people, who directly or indirectlycontributed in the development of this work and who influenced my thinking,behavior, and acts during the course of study.I express my sincere gratitude to ……………………….. (Branch Manager), worthyPrincipal for providing me an opportunity to undergo summer training at UniconSecurities Pvt. Ltd.I am thankful to …………………….., Relationship Manager-Equity offline ofUnicon Securities for his support, cooperation, and motivation provided to me duringthe training for constant inspiration, presence and blessings.I also extend my sincere appreciation to ………………… who provided theirvaluable suggestions and precious time in accomplishing my project report.Lastly, I would like to thank the almighty and my parents for their moral support andmy friends with whom I shared my day-to-day experience and received lots ofsuggestion that improved my quality of work. 4
  5. 5. Projectsformba.blogspot.com INDEXS.No. Particulars Page No. 1 EXECUTIVE SUMMARY 6 2 OBJECTIVES OF THE STUDY 8 3 COMPANY PROFILE OF UNICON SECURITIES PVT. LTD. 9 4 INTRODUCTION TO DEMAT ACCOUNT 24 5 STUDY OF “DEMAT ACCOUNT PROCEDURE” 36 6 RESEARCH METHODOLOGY 52 7 DATA ANALYSIS & INTERPRETATIONS 56 8 LIMITATIONS OF THE STUDY 65 9 SUGGESTIONS AND RECOMMENDATIONS 66 10 BIBLIOGRAPHY 67 11 ANNEXTURE 68 5
  6. 6. Projectsformba.blogspot.com EXECUTIVE SUMMARYThe Indian capital markets have seen a lot of economic swing since last decade butstill it has been flourishing with rapid transformations. Reforms are continuing andare bringing a lot of change in structure, process and governance of capital market.This is helping Indian capital market to gain an image of mature market place in thecapital markets of the world. The working mechanisms are now more flexible andtransparent. The stock exchange has been corporatized too. Other than this newinstruments like index future, index options, derivatives etc. has been introduced.Out of the major players showing their presence in the financial markets,Unicon Securities Pvt. Ltd. is one of Indias fastest growing private sector financialservices companies; it is a one-stop-shop, providing end-to-end financial solutionsincluding web-based services. It has the largest non-banking distribution channel withover 900 Business offices in 235 cities and 2,00,000 clients across the country.The objectives of the research were to create awareness about various products andservices of the Unicon Securities Pvt. Ltd. and to know about the investor behaviourand their preferences towards investment decisions and considerations. Other thanthis, the research included the study of position of Unicon Securities Pvt. Ltd in themarket and its comparative position with other players.Descriptive research was used in the whole project. The data was collected throughmeeting investors and potential investors in various areas of Pune and questionnaireswere filled on the basis of their responses. The collected data was analyzed usingpercentage method.Various findings were derived which revealed perception and behaviour of investorsand potential investors toward financial market. Other than this, the attitudes ofinvestors were also observed towards Unicon Securities Pvt. Ltd. Unicon based uponthe findings, various suggestions were given with a view to improve the Position ofUnicon Securities Pvt. Ltd. in the market. 6
  7. 7. Projectsformba.blogspot.comAs a result of research, it was concluded that Unicon Securities Pvt. Ltd has a goodbrand image to the existing clients, but it still has to work upon in various areas toexcel in the financial sector.This report is structural as well as procedural study about the extent of flexibility andtransparency present inside the framework of financial industry.Organization is constantly changing. These changes often result from events whichalter the establishment status in some way such as the introduction of new technologyprocess changes organization merges or restructuring.Unicon Securities Pvt. Ltd in its span of seven years has undergone many innovationswhether it is in its field of technologies or whether it is customer satisfaction. In thisperiod of our training I have learnt all the operations done by Unicon Securities Pvt.Ltd i.e. opening of DEMAT account, filling forms, verification of the form,rectification of the form, checking the status of the clients, handling the queries of thecustomers, gaining knowledge about the various products of other companies forwhich Unicon Securities Pvt. Ltd is doing cross-marketing like IPO, Commodities,Derivatives, etc.During my project I also came to know about the customer service which thecompany provides to its customers. As far as data collection is concerned we haveboth primary as well as secondary data in this report. I have collected primary data byinteractive sessions with the working officials of the company and secondary data arecollected which are more qualitative in nature from the manuals, internet, corporatearticles and other preserved data by the company.This project has been a great learning experience for me; at the same time it gave meenough scope to implement my analytical ability. The first part gives an insight aboutthe Demat Account, IPO and mutual funds and their various aspects. It is purelybased on whatever Unicon Securities Pvt. Ltd.All the quarries of the customer asked by them had been solved with the support ofthe seniors in the organization. The problems of the customer were being recorded forthe purpose of the research and development. 7
  8. 8. Projectsformba.blogspot.com OBJECTIVE OF THE STUDY• The main objective of the study is to know about the potential of the market regarding people’s dealing in share market.• To know the role of DEMAT ACCOUNT .• To know the procedure of opening DEMAT ACCOUNT.• The objective is to know that how many people in the city are aware of the UNICON SECURITIES PVT. LTD.• To know where people have already opened their demat a/c and on what basis. 8
  9. 9. Projectsformba.blogspot.com COMPANY’S PROFILE INTRODUCTION TO UNICON SECURITIES PVT. LTD.S MISSION AND VISION MANAGEMENT TEAM PRODUCTS AND SERVICES OFFERED BY UNICON 9
  10. 10. Projectsformba.blogspot.com INTRODUCTION TO UNICONUnicon has been founded with the aim of providing world class investing experienceto hitherto underserved investor community. The technology today has made itpossible to reach out to the last person in the financial market and give him the samelevel of service which was available to only the selected few.Unicon gives personalized premium service with reasonable commission on the NSE,BSE & DERVATIVES market through their equity broking arm Unicon Securitiesprivate ltd. and commodities on NCDEX and MCX through their UniconCommodities Pvt Ltd. With their sophisticated technology we can trade through ourown computer and if we want human touch we can also deal through our relationshipsmanagers out of more than 100 branches.Unicon also give personalized services on insurance (Life and General)&Investments ( Mutual funds & IPO’S ) needs through their Insurance & Investmentdistribution arm Unicon Insurance Advisors Pvt. Ltd. Their tailormade customizedsolutions are perfect match to different financial objectives. Their distributionnetwork is backed by in house back office support to serve their customers promptly 10
  11. 11. Projectsformba.blogspot.com MISSION AND VISION OF UNICON INVESTMENT SOLUTIONSMISSION:To create long term value by empowering individual investors through superiorfinancial services supported by culture based on highest level of team work,efficiency and integrityVISION:To provide the most useful and ethical investment solutions guided by values drivenapproach to growth, client service and development 11
  12. 12. Projectsformba.blogspot.com MANAGEMENT TEAM OF UNICON SECURITIES PVT. LTD.SFounder& CEO: Mr. Gajender NagpalMr Nagpal with his dynamic leadership brings vision to the company. A managementgraduate by qualification, Mr. Nagpal brings with him over 14 years of experience inthe stock market. Before joining Unicon he has served at senior positions for 5 yearswith Kotak securities at a regional level and Indiabulls securities for 4 years atnational level assignments. Mr. Nagpal brings with him the rich experience ofbuilding a retail broking network.He is a familiar face on the electronic media and is well respected in the brokingindustry for his stock market expertise.Co-Founder& President: Mr. Ram M GuptaMr. Gupta through his aggression and dynamism brings energy to the team. He has 8years of stock market experience behind him and is responsible for driving the salesteam. Mr. Gupta has held senior level postions in Karvy stock broking and IndiabullsSecurities. Mr. Gupta is supported by a team of over 850 relationship mangers spreadover 89 locations across the countryChief Operating Officer: Mr. Sandeep AroraMr. Sandeep Arora brings with him over 11 years of experience of managingoperations of stock broking company. Mr. Sandeep Arora before taking over as headof operations at Unicon was responsible for managing the operations of IndiabullsSecurities Ltd. Mr. Sandeep Arora is supported by his team of over 400 peoplehelping him to give world class service to the clients.Chief Financial Officer: Mr. Vikas Mallan 12
  13. 13. Projectsformba.blogspot.comMr Mallan A Chartered Accountant, Company Secretary and Cost Accountant byprofession. Mr. Mallan has over 14 years of experience in the area of finance. Beforejoining Unicon he has served at senior level positions with Rediff.com, RelianceTelecom and Koshika Telecom. His experience includes a Nasdaq listing of an Indianinternet company and Head of Finance of a leading Law firm. Mr. Mallan is headingDistribution / Mutual Fund initiative and is supported by around 1100 dedicatedemployees nationwide.Chief Compliance Officer: Ms. Anjali MukhijaMs. Anjali Mukhija heads compliance. She brings with her 12 years of experience inthe stock markets. Her current job profile includes broking operations, client relations& grievance redressal, coupled with Public dealings. Prior to joining Unicon, she waswith the National Stock Exchange, Delhi Regional Office for 10 years and had heldsenior position for a brief period in a reputed broking house.National Head (E-Broking): Mr. Trinadh KiranMr Trinadh Kiran is an MBA marketing professional from Aligarh MuslimUniversity and has done 10 months research in Capital Markets from IIM-Ahmedabad. He brings with him a total work experience of 7 years and has workedwith almost all big giants of capital market like India Infoline, India Bulls and Networth Stock Broking. He is associated with Unicon since June 2005. He has extensiveknowledge of Retail Broking and expertise in E-Broking.National Head (Business Alliances): Mr. Vijay ChopraMr. Vijay Chopra is a management graduate from Indian Institute of Foreign Trade,New Delhi. He has a illustrious professional track record of spanning over 11 yearswherein he has handled various assignments at a senior levels with some of the bestnames in the Consulting, FMCG & healthcare space. His forte has been supply chainmanagement, New Product Launches, Sales, Marketing, Product management &Training. Mr. Chopra along with his team handles over 300 business partner networkwhich is spread over the entire geographical spread of the country.Head-Priveleged Client Group: Mr. Ashish KukrejaMr. Ashish has the responsibility of handling PCG business with Unicon. He bringswith him a wide industry exposure and joined Unicon in July 2006 after rendering hisservices to Kotak Securities, where he was taking care of franchisee business andlater started handling HNI desk. He is an MBA (finance) from ICFAI BusinessSchool. 13
  14. 14. Projectsformba.blogspot.com Vice President-HR &Training: Ms. Deepa Mohamed Ms Deepa Mohamed Sqn. Ldr.(Retd). Deepa Mohamed, pioneer as first batch of women Officer in Indian Air Force is an Electronics & Communications engineer from Netaji Subhas Institute of Technology (Delhi). She has also undergone Aeronautical Engineering course from AFTC, Bangalore and Post graduation specialization in Human Resource Management from XLRI-Jamshedpur. She has 12 years of working experience in personnel management and administration and is associated with Unicon since September, 2006. She has been instrumental in setting up Human resource and Training division. She has worked as an OD consultant and her expertise lies in Organization development and change management. PRODUCT & SERVICES OFFERED BY UNICON Unicon deals with a numbers of products & services:• Equity• Commodity• Depository• Privileged Client Group• Properties• Distribution• NRI Services• Back Office 14
  15. 15. Projectsformba.blogspot.com Equity Unicon offers a unique feature of a single Screen Trading Platform of NSE, BSE & Derivatives. Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch locations Online Trading Products:• Unicon plus• Unicon Swift Unicon Plus Browser based trading terminal that can be accessed by a unique ID and password. This facility is available to all our online customers the moment they get registered with us. Unicon Swift Application based terminal for active traders. It provides better speed, greater analytical features & priority access to Relationship Managers. Commodity Unicon offers a unique feature of a single screen trading platform in MCX and NCDEX.Unicon offers both Offline & Online trading platforms. You can Walk in or place your orders through telephone at any of our branch location Online commodity internet trading platform through uniflex. 15
  16. 16. Projectsformba.blogspot.com• Live Market Watch for commodity market (NCDEX, MCX) in one screen• Add any number of scrips in the Market Watch• Tick by tick live updation of Intraday chart• Greater exposure for trading on the margin available• Common window for market watch and order execution• Key board driven short cuts for punching orders quicklyon• Real time updation of exposure and portfolio• Facility to customize any number of portfolios & watchlists.• Market depth, i.e. Best 5 bids and offers, updated live for all scripts• Facility to cancel all pending orders with a single click• Instant trade confirmations• Stop-loss feature. Depository Unicon depositories services offers dematerialization services as a participant in Central Depositry Services Limited (CDSL) through its depository operations. The company believes in efficient and cost-effective and integrated service support to its brokerage business. Unicon Securities Private Limited, as a depository participant, will offer depository accounts for individual investors as well as corporates which will enable them to transact in the dematerialized segment, without any hassles. Depository offers a safe, convenient way to hold securities as compared to holding securities in paper form. Our service provides an integrated single platform for all our clients ensuring a risk free, efficient and prompt depository process. 16
  17. 17. Projectsformba.blogspot.com Facilities Offered by Unicon* De-materialization:You can submit your physical shares at the Unicon branch for dematerialization intoelectronic form.* Re-materialization:You can also request for Re-materialization which enables you to convert thedematerialized shares into physical form.* Transfer:Inter and intra depository services are available through which you can transfershares.IPO:You can apply for IPO using your demat account details and on allotment thesecurities are transferred directly to your demat account.* Corporate Actions:While holding your stock in demat account, in case you are eligible for any bonus andrights issues the allotment would be transferred to your demat account.* Easi: 17
  18. 18. Projectsformba.blogspot.com You can view your demat account over the Internet and avail a host of services. This facility empowers our clients to view, download Priveleged client group We provide customer focused transparent investment planning and solutions. We offer products which benefit your special status. PCG has a specialized advisory team which nurtures all your investment. We ensure that your investments work for you rather than you for them. Products offered by unicon• Unicon Signature Account• Nifty Tracker• Unicon Trade Plus• Stastical Arbitrage• Unicon Wealth Planner Properties Unicon is a specialized property broking company. Our highly experienced and professional teams present retail, office, industrial and residential property opportunities to a broad base of clients. Whether it is a residential or commercial development, Unicon offers a total solution to our clients inclusive of market research, marketing strategy, interaction with the professional teams and sales or leasing of the property. Unicon’s professional team of consultants will assist you to identify suitable premises that satisfy your requirements. We will help you negotiate favorable leases and assist with the preparation of all documentation. “Whether you are looking for a home or a place to conduct business Unicon shall find you one” 18
  19. 19. Projectsformba.blogspot.comDistributionUnicon is fast emerging as a leader in the Insurance and Mutual Funds distributionspace. Unicon has over 100 branches and a huge number of “Business DevelopmentExecutives” who help to source and service theCustomers throughout the country. Unicon is fast becoming the preferred “VendorIndependent” distribution houses because of providing efficient service like free pick-up of collection of cheques/DD’s, Keeping track of the premiums etc to its customers.Unicon offers the following distribution products:-U IPOsU Mutual FundsU InsuranceIPOAt Unicon you can invest in the Primary markets (Initial Public Offerings) onlinewithout going through the hassles of filling up any IPO application forms or any otherpaperwork.We shall make sure that you do not miss the opportunity to subscribe/invest in a goodIPO issue by providing you an online IPOapplication form, transfer of funds online through secured payment Gateways ofleading banks like ICICI, HDFC, AXIS bank.In addition to the above we shall provide you with the In-Depth analysis of the IPOissues which shall be hitting the Indian Markets in near future, IPO Calendar, analysis 19
  20. 20. Projectsformba.blogspot.com on the recent IPO listings, prospectus, offer documents and other IPO research reports so as to help you take an informed decision to invest in the IPO issues. Online IPO facility is open to all our registered clients at no cost whatsoever. All you need is the following to subscribe online to the IPO issues• A trading account with Unicon• A Demat account with Unicon• An access to the net banking facility with the Banks through which Unicon has operational Gateway facility (ICICI, HDFC and AXIS Bank).• You must have signed a Power of Attorney (POA) agreement for applying in IPO’s online Mutual Funds Unicon Provides expert advice to its clients for their investments in equity & debt markets through Mutual Funds. Our experts advice you the best investment solutions that suit you and help you to reach your financial goals. We help you ascertain your risk profile & guide you with the right product mix which reduce your tax liability increase your savings & enhance your wealth. Weather you have a conservative, medium or aggressive investment risk appetite, our experts would guide you to build a portfolio to optimize the return of interest. Classification of Mutual Funds• By structure1. Open-ended Scheme2. Close-ended Scheme3. Interval Schemes• By Investment objective1. Growth Schemes2. Income Schemes3. Balanced Schemes4. Money market Schemes• By Other Schemes1. Tax saving schemes2. Special schemes3. Index Schemes 20
  21. 21. Projectsformba.blogspot.com Insurance General Insurance Unicon offers all products of General Insurance under one umbrella. Unicon comprises of a team of distinguished professionals from insurance, finance and other management disciplines who have vast business & managerial experience. Unicon team evaluates the clients business environment and studies the risk profile based on the results of these evaluations, Unicon team then suggests the most cost effective , integrated insurance package that is perfectly suited to the clients risk profile. Unicon has a nationwide network of branches all over India, equipped with top quality infrastructure facilities, to provide you prompt & efficient service. Life Insurance Unicon offers you a Peace of Mind by offering various life insurance plans for your unique & specific needs. Our philosophy is that for every financial problem, there is a solution also. And we are here to give you complete financial solutions. At the same time we offer you very Prompt & Reliable Policy related service for enduring relationship. We offer a very wide range of products to fulfill your particular requirements. You can always have an access to our 83 Branch Offices situated at prime locations of the city, or you can call our Relationship Manager to guide on your Investments. Following is the glimpse of Life Insurance Plans• Protection Plans• Investment Plans• Child Plans 21
  22. 22. Projectsformba.blogspot.com• Retirement/Pension Plans• Saving Plans• NRI Plans• Health Plans NRI Services With India becoming the epicentre of growth the Global Indian feels the need to be connected to the domestic growth story. Unicon now offers a convenient and hassle-free way of Investing in the Indian Securities Market to the people who are living outside India and wish to participate in the Indian Growth story. Procedure for NRI operations in Indian Capital Markets • The NRI can deal with only one bank at any point of time. • The NRI He is allowed to invest only 5% of the paid up capital of a company. The aggregate paid up value of equity of any company purchased by all NRIs and OCBs cannot exceed 10 percent of the paid up capital of the company and in the case of convertible debentures, the aggregate paid up value of each series of debentures purchased by all NRIs and OCBs cannot exceed 10 % of the paid up value of each series of convertible debentures. • He can enter only into delivery based trades; all deliveries must only be routed through beneficiary accounts and not directly through the broker. • Shares bought by him cannot be sold unless the payout of the same is received from exchange. • All purchase and sale transactions have to be reported to the RBI by the designated bank. • Original brokers contract notes have to be submitted to the designated Bank branch, within 24 hours of the transaction. 22
  23. 23. Projectsformba.blogspot.com • He will be required to make bill to bill payments/ settlements. No adjustments of purchase against sale consideration should be done. • Shares cannot be bought against the shares sold in the same settlement. • All Purchase and Sales will be dealt separately for payments / receipts. • Sale proceeds of any transaction not reported/approved by the RBI is allowed to be credited to the NRE/NRO savings/demat account. The transaction will have to be reversed in the account and losses if any will be borne by the client. • All tax liabilities arising out of buying and selling of securities will be handled by the designated bank. Back Office Unicon through its online back-office aims to increase the transparency and provides you the link to view the details of your account online anytime and anywhere. Here you have the advantage of viewing the following reports online• Sauda Details• Financial Ledger• Net position for the day• Net position Detail (for the complete financial year)• E-Contract Note 23
  24. 24. Projectsformba.blogspot.com DEMAT ACCOUNT 24
  25. 25. Projectsformba.blogspot.com INTRODUCTIONThe trading on stock exchanges in India used to take place through open outcrywithout use of information technology for immediate matching or recording of trades.This was time consuming and inefficient. This imposed limits on trading volumes andefficiency. In order to provide efficiency, liquidity and transparency, NSE introduceda nation-wide on-line fully automated screen based trading system where a membercan punch into the computer quantities of securities and the prices at which he likes totransact and the transaction is executed as soon as it finds a matching sale or buyorder from a counter party. Screen based electronic system electronically matchesorders on a strict price/time priority and hence cuts down on time, cost and risk oferror, as well as on fraud resulting in improved operational efficiency. It allows fasterincorporation of price sensitive information into prevailing prices, thus increasing theinformational efficiency of markets. It enables market participants, irrespective oftheir geographical locations, to trade with one another simultaneous, improving thedepth and liquidity of the market. It provides full anonymity by accepting orders, bigor small, from members without revealing their identity, thus providing equal accessto everybody. It also provides a perfect audit trial, which helps to resolve disputes bylogging in the trade execution process entirety. The sucked liquidity from otherexchanges and in the very first year of its operation, NSE became the leading stockexchange in the country, impacting the fortunes of other exchanges and forcing themto adopt SBTS also. Today India can boast that almost 100% trading take placethrough electronic order matching.Now dematerialisation of shares is introduced “a new concept” which converts paperbased physical trading into electronic trading. It is a safe and convenient way to holdsecurities. Screen based trading system helps in faster transfer of securities and nostamp duty is required on transfer of securities. The trading system operates on astrict price time priority. All orders received on the system are sorted with the bestpriced order getting the first priority for matching i.e. the best buy order match withthe best sell order. Orders are matched automatically by the computer keeping the 25
  26. 26. Projectsformba.blogspot.comsystem transparent, objective and fair. The trading system provides tremendousflexibility to the users in terms of kinds of orders that can be placed on the system.The trading system also provides market information online.In order to promote dematerialization of securities, NSE joined hands with leadingfinancial institutions to establish the national securities depository Ltd. (NSDL), thefirst depository in the country, with the objective of enhancing the efficiency insettlement systems as also to reduce the menace of fake/forged and stolen securities.This has ushered in an era of dematerialised trading and settlement. SEBI has madedematerialised settlement mandatory in an ever –increasing number of securities in aphased manner, thus bringing about an increase in the proportion of shares deliveredin dematerialised form. There is an increasing preference to settle trades, particularlyin high value securities, in demat form. Such high level of demat settlement reassuressuccess of rolling settlement. WHAT IS DEMATIn India, a demat account, the abbreviation for dematerialised account, is a type ofbanking account which dematerializes paper-based physical stock shares. Conversionof Securities from Physical (Paper) Mode into Electronic Mode is CalledDematerialisation. The Client opens Demat Account with any DP. Upon Demat, theCertificates are destroyed and credit entry of exactly equal number of Securities iscreated in Depository in Electronic mode. The B.O. account of holder is credited andthe securities loose their identities. The dematerialised account is used to avoidholding physical shares: the shares are bought and sold through a stock broker.This account is popular in India. The market regulator, securities and exchange boardof India (SEBI) mandates a demat account for share trading above 500 shares. As ofApril 2006, it became mandatory that any person holding a demat account shouldpossess a permanent account number (PAN), and the deadline for submission of PANdetails to the depository lapsed on January 2007.Dematerialisation is the process by which physical certificates of an investor areconverted to an equivalent number of securities in electronic form and credited in theinvestors account with its DP. In order to dematerialize certificates; an investor willhave to first open an account with a DP and then request for the dematerialisation ofcertificates by filling up a dematerialisation request form [DRF], which is availablewith the DP and submitting the same along with the physical certificates. The investorhas to ensure that before the certificates are handed over to the DP for demat, they aredefaced by marking "Surrendered for Dematerialisation" on the face of thecertificates. 26
  27. 27. Projectsformba.blogspot.com ACCOUNT OPENING To avail the services of a depository an investor is required to open an account with a depository participant of any depository.PROCEDURE FOR OPENING AN ACCOUNT • A demat account are opened on the same lines as that of a Bank Account. Prescribed Account opening forms are available with the DP, needs to be filled in. Standard Agreements are to be signed by the Client and the DP, which details the rights and obligations of both parties • The DP officials will make available the relevant account opening form (depending on whether the client is a retail investor or corporate client/clearing member) and specify the list of documents regarding references that should be submitted along with the form. It will also give a copy of the relevant agreement to be entered with the client, in duplicate. • The client will submit the duly filled in account opening form and client has to visit personally for opening the account in DP. The DP officials have to do in person verification and affix the “IN PERSON VERIFICATION” stamp on the account opening form. It should also furnish such documents regarding references, as specified by the DP, along with the account opening form. After executing the agreement the client has to forward it to the DP. 27
  28. 28. Projectsformba.blogspot.com • The DP officials will verify that the account opening form is duly filled in. It will also verify the enclosed documents, if any. Incomplete forms will be forwarded to the client for rectification. • For Corporate Clients, the DP officials will verify if the board resolution for the authorized signatories is enclosed. • In case the documents are not proper, the DP officials will reject the form and intimate the client of the same, stating the reasons for doing so. • If the form is in order; the DP officials will accept the same and affix the stamp “verified with original” on each and every proof after seeing the original proofs. • After completion of all documentation, the DP officials will verify the pan from income tax website. And affix the stamp “PAN VERIFIED” with date and sign on the stamp. • The DP officials will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL & CDSL to the Participant) screen provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture all the details in the DPM and record the client’s signature (on the form) as specimen for authorizations in the future. • After entering client details in the system, a client account number will be generated by the DPM. The DP officials will enter this in the account opening form. After that the officers will verify the details in the DPM captured by the SR. Assist. and activate the account. • The DP officials are not allowed to give the demat a/c no to the clients until the a/c is activate, this is applicable for both NSDL & CDSL. • When the demat a/c is activated the DP officials have to send the client master and the copy of agreement between DP and client at the client’s address. • The account holder is called beneficial owner in a depository system and the account is known as beneficiary account.Features of Beneficary Account· 28
  29. 29. Projectsformba.blogspot.com • No minimum balance is required to be retained in a beneficiary account. • An investor can close a beneficiary account with one DP and open an account with another DP. • To dematerialise existing physical holdings, the beneficiary account must be opened in the same ownership pattern in which the securities are held in the physical form e.g.,if one certificate is in individual name and another certificate is jointly held by X & Y, two different accounts should be opened. However, in case of joint holders, securities can be dematerialised in the same account even though share certificates are in different sequence of names e.g., shares held in joint names of X & Y can also be dematerialised in an account opened in the names of Y & X as well by submitting an additional form (Transposition Form) alongwith Demat Request Form to the DP.However, shares held jointly by X & Y cannot be dematerialised in an account opened in the name of only X or only Y or any . DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT Proof of Identity (POI):• Passport• Voter ID card• Driving license• PAN card with photograph• Identity card with applicant’s photograph issued by1. Central or state government and its department2. Statutory/regulatory authorities3. Public sector undertakings4. Scheduled commercial banks5. Public financial institutions6. College affiliated to universities Proof of Address (POA):• Ration card• Passport• Voter ID card• Driving License• Bank passbook• Verified copies of :1. Electricity bills (not more than 2 months old)2. Residence landline telephone bill (not more than 2 months old)3. Leave & license agreement/agreement to sell (duly attested)4. Self declaration by supreme court/high court judges, giving the new address in respect of their own accounts 29
  30. 30. Projectsformba.blogspot.com• Identity card with applicants photograph issued by1. Central or state government and its department2. Statutory/regulatory authorities3. Public sector undertakings4. Scheduled commercial banks5. Public financial institutions6. College affiliated to universities.• Passport-size photograph• Copy of PAN card along with original PAN card for verification Bank details: • Copy of cancelled cheque with printed name from the bank. • Copy of bank passbook with name and address and copy of cancelled cheque. • Bank statement with name and address (duly authorized by the bank, if statement is on plain paper) not more than 4 months old and copy of cancelled cheque of MICR & bank detail verification. In case of minor • Date of birth certificate duly notarized. • Proof of address and identity documents of the guardian both minor and guardian’s photograph and guardian to sign across both photographs • PAN card of minor as well guardian is mandatory In case of NRI • Foreign address and RBI approval date attested copy of RBI approval • NRO-Indian address alonwith proofs • Bank account details In case of joint holdings In case of joint holdings, POI and POA documents alongwith PAN card must be submitted in respect of all account holders. Original documents must be taken to the DP for verification. D The DP will also provide a copy of the DP-Client agreement. 30
  31. 31. Projectsformba.blogspot.comP Account opening form require the applicants to give the following details: • Name(s) of account holder(s) -The investor should ensure that the name is identical to that which appears on the certificate(s) to be dematerialised. In case of joint holdings, account may be opened in any one combination, irrespective of the sequence in which names are appearing on share certificates. Investors are advised to open their account in their fully expanded name, i.e., to spell to the first name as well as the middle name. This would obviate any doubts about the veracity of the information. • (b) Mailing and communication address(es) - The veracity of the applicants address is determined through the documents submitted for verification like ration card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI accounts, proof is required for both addresses - that of the account holder as well as the constituted attorney. For corporate accounts, a copy of Memorandum of Association, Articles of Association, Board resolution permitting opening of account, the registered address of the company have to be furnished. • (c) Details of guardian in case account holder is a minor -Only a guardian can open a depository account for a minor. The guardian is required to sign the application form, and details of his name and address need to be given in addition to the details of the minor. • (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts -For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish original or attested copies of the power of attorney and the approval letter from RBI permitting them to invest, as the case may be.If the account holder is an FII or an OCB, SEBI registration details along with attested copy of registration certificate issued by SEBI and authorisation letter is required. • (e) Details of bank account -Details of bank account of the account holder, including the nine digit code number of the bank and branch appearing on the MICR cheques issued by the bank have to be filled in the application form. Companies use this information for printing them on dividend/interest warrants etc. 31
  32. 32. Projectsformba.blogspot.com • (f) Nomination declaration - A beneficial owner can make a nomination of his account in favour of any person by filing the nomination form with his DP. Such nomination is considered to be conclusive evidence of the account holder(s) disposition in respect of all the securities in the account for which the nomination is made. • (g) Standing Instruction - a facility of standing instruction is provided to the investors for receiving securities to the credit of their accounts without giving a separate receipt instruction. • The Demat account cannot be operated on "either or survivor" basis like the bank account. In case of the joint account for the beneficial owners, all the joint holders have to sign the account opening form. • The investor will submit to his DP the duly filled in account opening form & DP-client agreement along with the documents. • The DP will verify whether the account opening form has been duly filled in or not. He will also verify the submitted documents. For corporate investors, the DP will also verify whether the board resolution for the authorized signatories has been enclosed. The DP will ensure that clients signature is recorded on the form which will serve as specimen for authorizations in future. • If the application form and documents are in order, then the DP will accept them and give an acknowledgement slip duly signed and stamped to the client. The DP will execute the agreement and give a copy of it to the client. • After completion of all documentation, the DP will enter the client details as mentioned in the account opening form in the DPM (software provided by NSDL to the DP) screen provided for the purpose. After entering client details in the system, a client account number will be generated by the DPM. The DP will enter this in the account opening form. • On successful opening of the account, the DP will give: • Client Id - an eight digit number to be used along with DP Id for any future transactions. • Delivery Instruction slip book. • A copy of the report listing the client details captured in the DPM database to the client. The report will be generated by the DPM. 32
  33. 33. Projectsformba.blogspot.com PREREQUISTIES FOR DEMATERIALISATION REQUEST1. The registered holder of the securities should make the request.2. Securities to be dematerialised must be recognised by NSDL/CDSL as eligible. In other words, only those securities whose ISIN has been activated by NSDL/CDSL, can be dematerialised.3. The company/issuer should have established connectivity with NSDL/CDSL. Only after such connectivity is established that the securities of that company/issuer are recognized to be "available for dematerialisation".4. The holder of securities should have a beneficiary account in the same name as it appears on the security certificates to be dematerialised.5. The request should be made in the prescribed dematerialisation request form. 33
  34. 34. Projectsformba.blogspot.com REASONS FOR DEMATERIALISATION REQUEST REJECTION1. The quantity of shares mentioned in the DRF is more than the actual certificates sent.2. The quantity of shares mentioned in the DRF is less than the actual certificatessent.3The certificates sent are fake.4. The certificates sent are reported Stolen.5. Original certificates present are those for which the duplicates have already beenissued.6. Endorsements on the certificates are forged.7. Securities stand on a different name than those mentioned in the DRF.8. The details mentioned on the certificates do not match with the details on the DRF,or the order of the holders name on the DRF is different from the names given on thecertificates. The scrutiny by the DP is incomplete.9. The securities attached / DRF does not pertain to the R&T Agent to whom the DRFis sent.10. Electronic request received but physical certificates are not received with in 15days.11. Specimen Signature on the DRF differs from the signatures recorded with theRegistrar / Transfer Agents. 34
  35. 35. Projectsformba.blogspot.com 12. The certificates sent have a court injunction against them Precautions:• Corporate investors to enclose Memorandum of Association/Trust deed/Board resolution for the authorized signatories along with the account opening form.• Details with respect to the bank account details of an investor must be indicated in the space provided for the same in the account opening form.• If an investor is interested in availing the facility of standing instructions for credits to his account, then such instructions may be given to the DP. Otherwise, he will need to give a receipt instruction to his DP for receiving credits to his account. BENEFITS OF DEMATERIALISATION • No stamp duty for transfer of securities in the Depository System. In the case of physical shares, stamp duty of 0.25% of sale value is payable on transfer of shares. • Elimination of bad deliveries and all risks associated with physical certificates such as loss in transit, theft, mutilation, damage, etc. • Facility for freezing/locking of investor accounts to make it non-operational for specified period. • Instead of filling up transfer deed(s) a simpler form is to be given `to the DP. • Facility to pledge and hypothecate securities. Pledging Dematerialised securities is easier and advantageous as compared to pledging physical shares. In respect of shares in "compulsory Demat" category, banks prefer to lend against shares held in electronic form, and offer better terms. • Odd lots are not differentiated in the electronic system. Even a single share can be traded at the market rates without any reduction in realisation. • Just like a bank branch, the DP will give a periodical statement of account of holdings. In addition, investor can obtain a statement of holdings as and when required for a fee. • In case investor loses the statement of holdings, he can inform his DP and obtain a duplicate statement. Investors statement of holdings cannot be used by anybody else for trading in his account. 35
  36. 36. Projectsformba.blogspot.com • When an investor opens an account with a DP, he signs an agreement with the DP in which the DP will indemnify the investor for any mis-use of his holdings. The depository will also ensure thatthe interests of the investor are protected. Grievances, if any, against his DP will be resolved by the Depository. • Every transaction in investors account will have to be authorised by him, which ensures total control of the investor over his investment • A safe and convenient way to hold securities and there is immediate transfer of securities. • Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately. • Reduction in paperwork involved in transfer of securities and Reduction in transaction cost • Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. DEMAT PROCESS1. The registered holder of the securities makes the request.2. Securities must be recognised by Depository as eligible.3. Client submits DRF & physical certificates to DP. DP checks securities.4. Client defaces certificates and DP punches two holes on name of company.5. DP enters demat request in system for Depository.6. DP dispatches certificates along with DRF to R&T.7. Depository records the details and sends to R&T.8. R&T agent verifies the details and confirms to Depository.9. Depository credits the demat securities to BO a/c of client and intimates DP electronically. 36
  37. 37. Projectsformba.blogspot.com10. DP issues statement to client. DEMAT -PROCESS Demat Process: Shareholders With Physical Certificate Depository Shareholder goes to DP with his physical share certificates Participants Shareholder opens his account Account Opening with DP. Demat Request Shareholder fills DRF in duplicate, defaces the shares Form (DRF) and hands over to DP The DP sends R&T Depository DP sends information Share certificates electronically to Depository Agent to R&T agent for dematerialisation Dematerialisation Upon confirmation of Demat by R&T Agent, the Depository confirms Dematerialisation. Credit to the BO A/c. of the Investor 37
  38. 38. Projectsformba.blogspot.com INFORMATION NEEDED FOR DEMAT ACCOUNTAn investor has to give his bank account details at the time of account opening. Itis for the protection of investor’s interest. The bank account number will bementioned on the interest or dividend warrant, so that such warrant cannot beencashed by any one else. Further, cash corporate benefits such as dividend, interestwill be credited to the investors account directly through the ECS (ElectronicClearing Service) facility, wherever available, by the company.An investor can change the details of his bank account. Since in the depositorysystem monetary benefits on the security balances are paid as per the bank accountdetails provided by the investor at the time of account opening, the investor mustensure that any subsequent change in bank account details is informed to the DP.An Investor should immediately inform his/her DP if the address of the investorchanges, who in turn will update the records. This will obviate the need of informingdifferent companies.An investor can open more than one account in the same name with the same DPand also with different DPs.An investor has not to keep any minimum balance of securities in his/her accounts.Depository / DP can be chosen by investor as per convenience irrespective of the DPof the broker.The demat account must be opened in the same ownership pattern such as securitiesowned individually in which the securities are held in the physical form. e. g. if oneshare certificate is in the individual name and another certificate is jointly withsomebody, two different accounts would have to be opened. 38
  39. 39. Projectsformba.blogspot.com WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANTDepository can in many ways be compared to a bank. Securities of the investors areheld in electronic / book entry form by the Depository. Apart from holding thesecurities, Depository also provides services related to transactions in securities.In India, a Depository Participant (DP) is described as an agent of the depository.They are the intermediaries between the depository and the investors. Therelationship between the DPs and the depository is governed by an agreement madebetween the two under the Depositories Act. In aStrictly legal sense, a DP is an entity who is registered as such with SEBIunder the provisions of the SEBI Act.Think of it like a bank. The head office where all the technology rests and details ofall accounts held is like the depository. And the DPs are the branches that cater toindividuals.At present two Depositories viz. National Securities Depository Limited (NSDL) andCentral Depository Services (I) Limited (CDSL) are registered with SEBI 39
  40. 40. Projectsformba.blogspot.comNATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)NSDL was the first depository organization promoted by IDBI, UTI, and NationalStock Exchange (NSE). NSDL was set up to provide electronic depository facilitiesfor securities being traded in capital market. The depositories ordinance waspromulgated by the Government of India in September 1995. The Securities andExchange Board of India (SEBI) issued guidelines for depositories in May, 1996.NSDL has minimum net worth of Rs 100 crores. NSDL deals with shares indematerialized form through depository participants who are agents of investor banks,stockbrokers and financial institutions. NSDL Depository Participant can be a publicfinancial institution, bank, custodian, registered stockbroker or a non-bankingfinancial company subject to the approval from the Depository Company and SEBI.NSDL aims at ensuring the safety and soundness of Indian capital market bydeveloping settlement solutions that increase efficiency, minimize risk and reducecosts. 40
  41. 41. Projectsformba.blogspot.comCENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)CENTRAL DEPOSITORY SERVICEES LIMITED (CDSL) is second depository inIndia, is set up to meet the objective the Act & to fulfill the user’s need. CDSL issecured “Certificate of Commencement” of business on Feb 8, 1999 from SEBI. Thebalances in the investors’ account recorded and maintained with CDSL can beobtained through the DP. The DP is required to provide the investor, at regularintervals, a statement of account, which gives the details of the securities holdingsand transactions. The depository system has effectively eliminated paper-basedcertificates, which were prone to be fake, forged, counterfeit resulting in baddeliveries. CDSL offers an efficient and instantaneous transfer of securities.CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leadingbanks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank,Standard Chartered Bank, Union Bank of India and Centurion Bank. Each and everyactivity of CDSL stem from the essential reason behind forming this depository, i.e.to encourage Indias individual investors to benefit from actively participating in adepository. 41
  42. 42. Projectsformba.blogspot.com Services provided by Depository system• Dematerialisation (usually known as demat) is converting physical certificates to electronic form.• Rematerialisation, known as remat, is reverse of demat, i.e. getting physical certificates from the electronic securities.• Transfer of securities, change of beneficial ownership• Settlement of trades done on exchange connected to the Depository• Pledge / Hypothecation of demat shares, viz. Loan against shares• Electronic credit in public offering of the Companies• Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into electronic form• Depository restrict the risk of fraud 42
  43. 43. Projectsformba.blogspot.com The charges for account closure and securities transfer due to account closing.SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advisedthat with effect from January 09, 2006, no charges shall be levied by a depository onDP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers allthe securities lying in his account to another branch of the same DP or to another DPof the same depository or another depository, provided the BO Account/s attransferee DP and at transferor DP are one and the same, i.e. identical in all respects.In case the BO Account at transferor DP is a joint account, the BO Account attransferee DP should also be a joint account in the same sequence of ownership.All other transfer of securities consequent to closure of account, not fulfilling theabove-stated criteria, would be treated like any other transaction and charged as perthe schedule of charges agreed upon between the BO and the DP. Freeze or lock of an accountInvestors can freeze or lock their accounts for any given period of time, if so desired.Accounts can be frozen for debits (preventing transfer of securities out of accounts)or for credits (preventing any movements of hindrances into accounts) or for both. 43
  44. 44. Projectsformba.blogspot.com Trading / SettlementTraditionally settlement system on Indian stock exchanges gave rise to settlement riskdue to the time that elapsed before trades were settled by physical movement ofcertificates. The process of physical moving the securities from seller to his broker toclearing corporation to the buyer’s broker and finally to the buyer took time with therisk of delay somewhere along the chain. Now depository holds securities indematerialised form. The procedure for buying and selling dematerialised securities issimilar to the procedure for buying and selling physical securities. The difference liesin the process of delivery (in case of sale) and receipt (in case of purchase) ofsecurities. In case of purchase:- • The broker will receive the securities in his account on the payout day • The broker will give instruction to its DP to debit his account and credit investors account • Investor will give ‘Receipt Instruction to DP for receiving credit by filling appropriate form. However one can give standing instruction for credit in to ones accounts that will obviate the need of giving Receipt Instruction every time. In case of sale:-The investor will give delivery instruction to DP to debit his account and credit thebroker’s account. Such instruction should reach the DP’s office at least 24 hoursbefore the pay-in as other wise DP will accept the instruction only at the investor’srisk. 44
  45. 45. Projectsformba.blogspot.com Standing Instruction given in the account opening formIn a bank account, credit to the account is given only when a pay in slip issubmitted together with cash/cheque. Similarly, in a depository account Receipt inform has to be submitted to receive securities in the account. However, for theconvenience of investors, facility of standing instruction is given. If you say Yes forstanding instruction, you need not submit Receipt in slip everytime you buysecurities. If you are particular that securities can be credited to your account onlywith your consent, then do not say yes [or tick ] to standing instruction in theapplication form. Delivery Instruction Slip (DIS) and the precautions which one need to observe with respect to Delivery Instruction SlipsTo give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DISmay be compared to cheque book of a bank account. The following precautions are tobe taken in respect of DIS:- • Ensure and insist with DP to issue DIS book. • Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS booklet issued to investor. • Ensure that your account number [client id] is pre-stamped. • If the account is a joint account, all the joint holders have to sign the Instruction slips. Instruction cannot be executed if all joint holders have notsigned • Avoid using loose slips. • Do not leave signed blank DIS with anyone viz., broker/sub-broker. • Keep the DIS book under lock and key when not in use. • If only one entry is made in the DIS book, strike out remaining space to prevent misuse by any one. • Investor should personally fill in target account -id and all details in the DIS. 45
  46. 46. Projectsformba.blogspot.comIt is possible to give delivery instructions to the DP over Internet .Both NSDL andCDSL have launched this facility for delivering instructions to your DP over Internet,called SPEED-e and EASI respectively. The facility can be used by all registeredusers after paying the applicable charges. Lending and borrowing of demat securitiesIf any person required to deliver a security in the market does not readily have thatsecurity, he can borrow the same from another person who is willing to lend as perthe Securities Lending and Borrowing Scheme.Lending and borrowing has to be done through an Approved Intermediary registeredwith SEBI. The approved intermediary would borrow the securities for furtherlending to borrowers. Lenders of the securities and borrowers of the securities enterinto separate agreements with the approved intermediary for lending and borrowingthe securities. Lending and borrowing is affected through the depository system.You can lend your securities through Approved Intermediaries registered with SEBI.One can lend his/her demat seurities by entering into an agreement with the approvedintermediary to be a lender under this scheme. After that, you may lend securities anytime by submitting lending instruction to your DP.Intermediary may return the securities at any time or at the end of the agreed periodof lending. Intermediary has to repay the securities together with any benefitsreceived during the period of the loan.One can receive the corporate benefits which would accrue on these securities duringthe period of lending.The benefits will be given to the Intermediary/borrower.However, whenever the securities are being returned / recalled.Intermediary/borrower will return the securities together with benefits received. 46
  47. 47. Projectsformba.blogspot.com PHYSICAL SEGMENT Change in Name / Status- All requests for change of name should be accompanied by a copy of the notification in Official Gazette or a Newspaper.- Request for change of name consequent upon marriage/divorce should be accompanied with marriage certificate/divorce decree.- For effecting change of status from minor to major, please send proof of age (such as attested copy of Birth Certificate or School Leaving Certificate)- In the case of limited companies, a certified copy of the Certificate of Incorporation consequent to Change of Name issued by the Registrar of Companies should be submitted along with Memorandum & Articles of Association- The new specimen signature duly attested by holders banker should be lodged with the Company to take on record the new signature. Change of Address Please inform the R&TA viz Integrated Enterprises (India) Limited immediately if there is any change in address, quoting Folio No. Duly signed by the main (1st) holder as per specimen signature recorded with us. This is the reason for which we would advise you not to send change of address request by mail. If shares are held in demat form, please advice your DP regarding change of address. 47
  48. 48. Projectsformba.blogspot.com Loss of Share Certificates Any communication to the Company regarding loss of share certificates should always be signed by the shareholder as per specimen signature registered with the Company, accompanied by FIR lodged with local police station giving full details of lost certificate(s) such as certificate(s) Nos., Distinctive Nos. etc. - Please immediately apply for injunction order in appropriate Court of Law for stopping transfer, giving full details of Certificate Nos., Distinctive Nos. etc. - Upon receipt of such communication, the procedure to be followed for obtaining duplicate share certificates will be advised Nomination Nomination when shares are held in physical form Nomination will enable smooth inheritance of ownership of the shares by the Nominee without any procedural difficulties. (Presently, there is no difficulty where shares are registered in joint names. But if the shares are held in an individual name, addition of a joint name can only be done as a transfer, involving share transfer form, stamp duty, surrender of original certificates etc. Following the nomination procedure eliminates all this inconvenience). Therefore, if shares are held in a single name, , with the intention of holding them for some more time, then please advise nomination immediately without delay Following Instructions for the Nomination1. Nomination can be made only by individuals, holding shares on their own behalf singly or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the shares are held jointly, all joint holders must sign the nomination form.2. A minor can be nominated by a holder of shares and in that event the name and address of the Guardian must be given by the holder.3. The nominee shall not be a trust, society, body corporate, and partnership firm, Karta of Hindu Undivided Family or a power of attorney holder. A non-resident Indian can be a nominee on repatriable basis. 4. Nomination will stand cancelled upon transfer of shares.5. The Company will be fully discharged from its responsibility towards the legal heirs of a shareholder, if the shares are transmitted as per the nomination filed with the company, without any further reference to the legal heirs of a deceased individual shareholder(s)6. Where the space provided in the Form is not sufficient, shareholders are requested to attach separate sheet(s) giving details of distinctive nos. of shares. 48
  49. 49. Projectsformba.blogspot.com7. The Nomination Form should be filed in duplicate with the Company, who will return one copy thereof to the shareholder.8. Although Form 2B as prescribed does not provide for specimen signature of nominee, this has been suggested in order to facilitate smooth transmission of title to the nominee when the need arises.9. Please note that if physical shares are subsequently converted into electronic form, any nomination already filed will cease to have effect; the nomination details furnished to the Depository Participant will prevail thereafter ISIN  International Securities Identification Number (ISIN) Each of the securities dematerialised in the NSDL depository bears a distinctive ISIN – an identification number. International Securities Identification Number (ISIN) is a unique identification number for each security issued in any of the International Standards Organisation (ISO) member countries in accordance with the ISIN Standard (ISO 6166). ISO 6166 was developed for use in an international (cross- border) as well as domestic trades. ISIN is a 12-character long identification mark. It has three components - a pre-fix, a basic number and a check digit. The pre-fix is a two-letter country code as stated under ISO 3166 (IN for India). The basic number comprises nine alphanumeric characters (letter and/or digits). The check digit at the end of the ISIN is computed according to the modulus 10 "Double-Add- Double". It establishes that the ISIN is valid. Securities issued by the same company, issued at different times or carrying different rights, terms and conditions are considered different securities for the purpose of allocating ISIN and are allotted distinct ISINs. In India, SEBI assigns ISIN to various publicly traded securities. Different ISINs are allocated to the physical and dematerialised securities of the same issue. SEBI being the national numbering agency for India has permitted NSDL to allot international securities identification number (ISIN) for demat shares. The ISINs allotted by NSDL does not at any point of time breach the uniqueness of ISIN of physical form for the same security. ISIN for a security is allotted when the security is 49
  50. 50. Projectsformba.blogspot.com admitted to NSDL. The numbering system is simple. The numbering system of ISIN is in compliance with the structure of ISIN adopted by SEBI. International Securities Identification Number:1. Issued by International Standards Organisation (ISO) member countries in accordance with ISO 6166.2. ISIN is 12 digit alpha numeric number.3. It has three components, prefix, basic & check digit.4. Prefix is a two letter country code i.e. IN for India.5. The basic number has nine alpha numeric characters.6. The last digit is check digit. It ensures the ISIN is valid. Numbering system of ISIN The numbering structures for securities in NSDL is of 12 digit alpha numeric string. The first two characters represent country code i.e. IN(in accordance wirh ISO 3166). The third characters represents the issuer type as detailed below: Issuers type Issuer type code allotted Central government A State government B Municipal corporation C Union territories D Company, statutory corporation, E Baking company Mutual funds including UTI F 50
  51. 51. Projectsformba.blogspot.comThe list may be expanded per the needs. Maximum issuer types can be 35 (A to Z and0 to 8. the pro-rata dividend shares are identified by 9). The next 4 characters (fourthto seventh character) represent company identity. The first 3 characters are numeric.The fourth character is alpha character. The numbering begins with ‘001A’ andcontinues till ‘999A’ and proceeds to ‘001B’. the next two characters (the eight andninth characters) represent security type for a given issuer. Both the characters arenumeric. The next two characters (the tenth and eleventh characters) are seriallyissued for each security of the issuer entering the system. Last digit is double-add-double check digit.The security types are planned which may be expanded as per the need as detailedbelow:-Security type codeEquity 01Non voting equity 02Convertible preference shares 03Non convertible preference shares 04Mutual fund units –close ended 05Mutual fund units-open ended 06Secured debentures 07Unsecured debentures 08Regular return bonds-promissory notes 09Floating rate bonds 10Deep discount bonds 11Step discount bonds 12Warrants 13 51
  52. 52. Projectsformba.blogspot.com RESEARCH METHODOLOGYResearch methodology refers to the search for Knowledge. It is a way tosystematically solve the research problem. In it we study the various steps that aregenerally adopted by the researcher in studying his research problem along with logicbehind them.Research Methodology concerning a research problem or study provide answers tovarious questions like; why a research study has been undertaken, how the researchproblem has been defined, what data have been collected and what particular methodhas been adopted to collect the data, what technique has been used for analyzing thedata and a host of similar other questionsThough there are more than one alternative approaches available to the researcher, butthis not enough to make the task of selecting the suitable research design simpler.Like the so-called suitable research design may require some in between approach.The objective of study being the main determinant of the validity and reliability of themethod adopted the degree of usefulness of the scientific method. Since there aremany aspects of research methodology, in line of action has to be chosen from varietyof alternatives, so that individual choice of suitable method is further complicated andmake a viable whole. The choice of suitable method is further complicated by thepossibility of many permutations and combinations. The fair selection can be arrivedat through the objective assessment and of course comparison of various alternatives.The finally selected line of action must ensure that this is indeed best one as againstthose rejected by the researcher. in addition, the circumstances and problems alsohaving a bearing in the choice. To count a fem, limitations could be imposed in thesense of funds available, time and urgency in conducting the research. So the finalchoice must be based on assessment of its advantage and disadvantages whenweighted against affecting factors. 52
  53. 53. Projectsformba.blogspot.comResearch methodology can be said to have four major components namely-Researchdesign, Sample design, Data collection procedure and methods of analyzing andreporting the findings. Research DesignThe research problem having been formulated in clear cut terms, the researcher willbe required to prepare a research design i.e., he will have to state the conceptualstructure with in which research would be conducted. The preparation of such adesign facilitates research to be as efficient as possible yielding maximal information.But how all there can be achieved depends mainly on the research purpose. Researchpurpose may be grouped into four categories.(1) Exploration(2)Description(3) Diagnoses and(4) Experimentation.Exploratory research studies are those whose main purpose is that of formulating aproblem for more precise investigation or of developing the working hypotheses fromon operational point of view.Descriptive research studies are those studies which are concerned with describingthe characteristics of a particular individual, or of a groupDiagnostic research studies determine the frequency with which something occurs.Experimental research studies are those where the researcher tests the hypothesis ofcasual relationship between the variables.Research design of this particular research study of dematerialization of shares isprimarily based on descriptive and diagnostic research design. As descriptive anddiagnostic research design describes the characteristics and determines the frequencywith which something occurs respectively, similarly this research determines thecharacteristics of the individuals who deal in share and also determine the frequencyof dealing on the basis of their characteristics. Sample DesignAll the items under consideration in any field of inquiry constitute a ‘Universe’ or‘Population’. A complete enumeration of all the items in the population is known asa census inquiry. This type of inquiry involves a great ideal of time, money and 53
  54. 54. Projectsformba.blogspot.com energy. Hence quite often a few items so selected constitute what is technically called a sample. The researcher must decide the way of selecting a sample or what is popularly known as sample design. A sample design is a definite plan determined before any data are actually collected for obtaining a sample from a given population. Samples can be either probability or non-probability samples. With probability samples each element has a known probability of being included in the sample but non-probability samples are those based on simples do not allow the researcher to determine this probability. Probability samples are those based on simple random sampling, systematic sampling , etc where as non probability samples are those based on convenient sampling, judgment sampling etc. Data collection techniquesThe required data is collected both from primary as well as secondary sources. Primary Sources: The primary data was collected through structured unbiased questionnaire and personal interviews of investors. For this purpose questionnaire included were both open ended & close ended & mulple-choice questions. Secondary Sources: Secondary data is the data, which is collected and complied for different purposes, which are used in research for this study. The secondary data includes material collected from:-Magazines & Bulletins- Brochure of Unicon Securities Pvt. Ltd.Internet- www.sebi.gov.in www.nseindia.com www.uniconindia.inSIZE OF SAMPLE The overall sample involved in the study consisted of 50 individuals. Keeping in view the limited resources of time, a limited sample of individuals. It was fixed before hand and every effort was made to cover the given number of individuals with available time for the collection of data for this project. The data was collected with the help of the questionnaire herself by the researcher.Method used for analysis of study 54
  55. 55. Projectsformba.blogspot.com The methodology used for this purpose is Survey and Questionnaire Method. It is a time consuming and expensive method and requires more administrative planning and supervision. It is also subjective to interviewer bias or distortion. Analysis of Data After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. The unwisely data should necessary be condensed into a few manageable groups and tables for further analysis. Thus researcher should classify the raw data into some purposeful and usable categories. In the process of analysis, relationships or differences supporting or conflicting with original or new hypotheses should be subjected to tests of significance to determine with what validity data can be said to indicate any conclusionInterpretation The interpretation is done on the basis of the analyzed data and also some recommendations are given to fill the loopholes of the actual scenario. 55
  56. 56. Projectsformba.blogspot.com DATA ANALYSIS AND INTERPRETATION Research is conducted for finding the solution of the problem. So to find the solution of the problem data analysis and interpretation is must. There are some questions related to this research to interpret the result. The sample size in this study consisted of 50 individuals and data analyzed from the response of these 50 individuals.1. ARE YOU AWARE OF STOCK MARKET? The basic purpose of this question is to know about how many people are aware of the stock market and its activities. NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 50 100 NO 0 0 56 TOTAL 50 100
  57. 57. Projectsformba.blogspot.com NO Series1 YES 0 20 40 60 80 100 120Interpretation:-This graph shows that all the 50 individuals were aware of stock market. So it canalso be possible that investors will rise in near future. 57
  58. 58. Projectsformba.blogspot.com2. ARE YOU AWARE OF DEMAT ACCOUNT? The basic purpose of this question is to know about awareness of demat account among respondents. NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 40 80 NO 10 20 TOTAL 50 100 58
  59. 59. Projectsformba.blogspot.com YES NOInterpretation:-The above table clearly shows that from a sample size of 50 respondents, 40individuals were aware of demat account. 3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THESTOCK EXCHANGE?The purpose of this question is to know about the duration for which investor hasbeen transact in stock exchange. 59
  60. 60. Projectsformba.blogspot.com NUMBER % OF DURATION OF RESPONSES RESPONSES LESS THAN 1 YEAR 20 40 1 YEAR 5 10 2 YEAR 10 20 MORE THAN 2YEAR 15 30 TOTAL 50 100 60
  61. 61. Projectsformba.blogspot.com LESS THAN 1 YEAR 1 YEAR 2 YEAR MORE THAN 2 YEAERInterpretation:-The above table clearly shows that from a sample size of 50 respondents, 15 havebeen trading in the stock exchange for more than 2 years. 10 investors were tradingfor 2 years and remaining 25 for one year or less than a year4. DO YOU TRADE- FREQUENTLY OR OCCASIONALLY?This purpose of this question is to find out how many persons trade frequently oroccasionally. NUMBER % OF TRADE OF RESPONSES RESPONSES FREQUENTLY 20 40 OCCASIONALLY 30 60 TOTAL 50 100 61
  62. 62. Projectsformba.blogspot.com FREQUENTLY OCCASIONALLYInterpretation:-This chart shows that 30 individuals trade occasionally and 20 individuals tradefrequently.5. WHICH TYPE OF SCRIPTS YOU HAVE?The purpose of this question is to know about which type of scripts the respondentshave. 62
  63. 63. Projectsformba.blogspot.com NUMBER % OF SCRIPTS OF RESPONSES RESPONSES PHYSICAL 15 30 DEMATERIALISED 35 70 TOTAL 50 100 40 35 30 25 20 Series1 15 10 5 0 PHYSICAL DEMATERIALISED 63
  64. 64. Projectsformba.blogspot.comInterpretation:-Above graph shows that many individuals have dematerialised scripts and some havephysical scripts. NUMBER % OF RESPONSE OF RESPONSES RESPONSES YES 30 60 NO 20 40 TOTAL 50 1006. DO YOU CONVERT YOUR SHARES ELECTRONICALLY?The basic purpose of this question is to know about how many persons are interestedto convert their shares electronically. 64
  65. 65. Projectsformba.blogspot.com YES NOInterpretation:-This chart shows that 30 individuals wanted to convert their shares electronically andrest were not.7. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER?The purpose of this question is know satisfaction about demat service provider. 65
  66. 66. Projectsformba.blogspot.com NUMBER % OF RESPONSES OF RESPONSES RESPONSES YES 45 90 NO 5 10 TOTAL 50 100 100 90 80 70 60 50 Series1 40 30 20 10 0 YES NOInterpretation:- 66
  67. 67. Projectsformba.blogspot.comThis graph shows that most of the people were satisfied with demat service provider.8. PROBLEMS BEING FACED BY THE RESPONDENTS RELATING TOTRADING?This question tells us about the type of problems faced by the respondents. NUMBER % OF PROBLEMS OF RESPONSES RESPONSES NO TRANSFER OR BAD DELIVERY OF 10 20 SHARES OTHER TYPE 20 40 OF PROBLEM NO PROBLEM 20 40 TOTAL 50 100 67
  68. 68. Projectsformba.blogspot.com NO TRANSFER OR BAD DELIVERY OF SHARES OTHER TYPE OF PROBLEM NO PROBLEMInterpretation:-From the above chart we can see that 20 investors faced no problem due to theintroduction of DEMAT. Nearly 10 respondents faced problems due to non-transferand bad delivery of shares. Because of many sick companies being listed in the stockexchange, the problem of non-receipt of dividend can be found among 7 investors.There were 20 persons who were facing other problems. Limitations Of The Research Study • Due to the lack of time, it was not possible for the researcher to approach all the people. • The respondents were asked to indicate their true responses to the questions being asked, but rather than giving the response, they might have been in a form of expert comments which might have based the result of the study. • The results of the study may not be universally applicable due to regional constraints. 68
  69. 69. Projectsformba.blogspot.com • Money was also considered as a major constraint during the research work. • Personal biasness may be included in the research work. SUGGESTIONS AND RECOMMENDATIONS • As many of the people who dealt in share market are aware of UNICON’S name but not of its services. So company should advertise its services, so that people can be made aware of all the services provided by the company. 69
  70. 70. Projectsformba.blogspot.com • Most if the people are not finding any spare time to convert their shares electronically. So company should approach to such people at their doorstep to open their demat account. • As far as people preference regarding opening of demat a/c is concerned then they mainly prefer two factors i.e. service and trust. So it becomes necessary for the company to take care of these two factors. BIBLIOGRAPHY• Unicon forms for opening depository and trading account.• Study material of capital market and derivatives market of NCFM. 70
  71. 71. Projectsformba.blogspot.com• Websites Visited www.sebi.gov.in www.nseindia.com www.bseindia.com www.uniconindia.in QUESTIONNAIRE I am a student of PGP from Indira Institute Of Career Studies, Pune, Maharashtra. You are required to fill this questionnaire to enable me to undertake the study on the said project. 71

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