demat

2. What is Demat
Conversion of physical securities into
electronic form
No distinctive number to securities
required as depositing & withdrawing
money from a bank without bothering
about distinctive no. of currency

3. Demat-need ?
bad deliveries due to signature difference
mistakes in completion of transfer deeds
tearing and mutilation of securities
fake certificates
fraudulent interception of certificate in transit
transfer stamp duty
extra consumption of time by the Companies
postal delays and charges etc

4. Dematerialisation
Introduced in India through the enactment of
the Depositories Act, 1996
It is not mandatory
One may keep its holding partly in physical
form and partly in Demat form
A select list of securities announced by SEBI
can be delivered only in demat form in the
stock exchanges connected to NSDL

5. DEMAT-participants
Participants:
Investors
The Depository
 NSDL [national securities depository ltd.]
 CDSIL[central depository of securities india ltd.]
The Depository Participants
The Issuing Company

6. Investors [Beneficial
Owner]Individual
Partnership Firm
HUF
Company
“Beneficial Owner” is a person in whose name
a demat account is opened with Depository
for the purpose of holding securities in the
electronic form

7. Depository
a depository is an organisation, which holds
the beneficial owner's securities in
electronic form, through a registered
Depository Participant (DP).
A depository functions somewhat similar to
a commercial bank.
To avail of the services offered by a
depository, the investor has to open an
account with it through a registered DP.

8. Depository ParticipantA Depository Participant (DP) is an agent of the
depository who is authorised to offer depository
services to investors.
Financial institutions, banks, custodians and
stockbrokers complying with the requirements
prescribed by SEBI/ Depositories can be
registered as DP.

9. Procedure of Demat-
for an investor
Fill DRF(Demat
Request Form)
available with DP
Deface the share
certificate(s) one
wants to
dematerialise by
writing across
“Surrendered for
Dematerialisation”
Submit the DRF and
Share Certificates to
DP
DP would forward
them to the
issuer/their Registrar
& Transfer Agent
Investor’s depository
a/c would be credited
with the
dematerialised
securities

10. The time involved in the
process
Dematerialisation is normally completed within
15 days after the share certificates have reached the
issuer/their R&T agent. Thus it will take only a month
from the date one hands over shares, to receive
Demat Credit.

11. Trading & Settlement in
Dematerialised SecuritiesIf you are a buyer:
Purchase securities in any of the S.E.s(connected
to NSDL) through a broker of your choice and make
payment to your broker
Broker arranges payment to clearing corpo./clearing
house of the stock exchange
Broker receives cr. in his clearing a/c
Broker can directly transfer these securities to your
a/c
Broker gives instructions to your DP to debit his
clearimg a/c and credit your depository a/c.
You give instructions to your DP for receiving Cr.
If instructions match your a/c with your DP is
credited

12. Trading & Settlement in
Dematerialised Securities
If you are a seller
Sell your demat securities in any of the Stock
Exchanges linked to NSDL through a broker
You give instructions to your DP for Debit of your
Depository a/c and Credit of your broker’s clearing
member a/c at least 24 hrs i.e.one working day prior to
the pay-in date or before the deadline prescribed by
your DP
On pay in day your broker gives instruction to his DP
for delivery to clearing corpo.
Broker receives payment from the clearing corpo.
You receive the payment accordingly.

13. Charges
Charges are paid through DPs
Custody charges: 0.01% p.a.(Rs.10 for every
Rs.100,000) of the average market value of
securities held in a/c
Settlement charges: 0.02% (Rs.20 for every Rs.
100,000)of the market value of the securities
being transferred from selling broker to the
clearing corpo.of the stock exchange and same
charges from clearing corpo.to buying agent
Rematerialisation charges of 0.10%(Rs.100 for
every Rs.100,000) of the market value of
securities or Rs.10,whichever is higher

14. Other BenefitsAllotment directly in Demat form possible,
Pledge of Demat holdings possible,
Lending/Borrowing of Demat Securities to/from
an Authorised intermediary,
Freezing of a/c possible
Transmission of holdings,
Nomination facility