Dematerialization And Depositories

FINANCIAL

ACCOUNTS
PROJECT BY :- FYBMS DIV C

183-DEEPAK GOSWAMI 147-DHANANJAY SHARMA 182-NEEL NAIN 176-RAKESH YADAV 162-TEJAS SURVE 136-KEDAR SAWANT 171-DAMIAN VAZ

Meaning
Dematerialization - the economic concept of reducing the quantity of materials required to serve economic functions (doing more with less). Dematerialization of shares refers to conversion of physical share certificates into electronic certificates.

Providing the bank account details at the time of account opening. Change in bank account details. Change in the address of investor as provided to the DP. Opening multiple accounts.

Things Investors Should Know About Account Opening And Dematerialisation.

Account opening and ownership pattern of securities. Allowing somebody else to operate your Demat account. Closing a demat account and transfer of securities to another account with same or different DP.

Freezing/Locking a demat account.

Dematerialised shares do not have any distinctive number.

Rematerialisation.

Demat account

This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a Demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a Demat account should posses a Permanent Account Number (PAN), and the deadline

DEMATERIALISATION PROCESS

Procedure
1. 2. 1. 2. 3. 4. 5.

Opening a Demat Account. Submission of DRF and Share Certificates. Forwarding and Uploading the Records. Verification And Updating the Records. Recording by Depository. Updating of Records by DP. Confirmation to Demat Account

Depository

A system that eliminates the tedious paper work involved while buying and selling shares. A Depository Participant (DP) is the first point of contact with the investor and serves as a link between the investor and the company through the National Securities Depository Ltd [NSDL] or the

Central Securities Depository Ltd

[CSDL] for dematerialization of shares. A depository participant could be a financial institution (like ICICI), bank (HDFC Bank,

BANK-DEPOSITORY AN ANALOGY
1. 2.

3.

BANK Holds funds in an account. Transfers funds between accounts on the instruction of the account holder. Facilitates safekeeping of money.

1.

2.

3.

DEPOSITORY Holds securities in an account. Transfers securities between accounts on the instruction of the BO account holder. Facilitates safekeeping of

Today there are as many as 533 companies where the investor can buy and sell dematerialized shares. Similarly there are 109 DP participants who have as many as 1191 service centers across the country. An investor could look at some of these

Why Demat?

Reduces brokerage charges. Enables quick ownership of securities. Avoids confusion in the ownership title of securities. Provides easy receipt of public issue allotments.

Why Demat?

It also helps you avoid bad deliveries. It eliminates risks. Demat account holders can avoid stamp duty. Demat account holders can avoid filling up of transfer deeds.

Importance of Depository
A) Benefits to investors: 1.Quick transfer of shares. 2.Less paper work. 3.No risk. 4.Less costs.
.

B) Benefits to Companies: 1.Accurate Data of Shareholders. 2.Reduction of Investors Complaints. 3.Quick correspondence (Negotiation). 4.Reduction in Secretarial Work.

C) Benefits to Capital Market: 1.Transparency in Trading. 2.Increase in Investors Confidence. 3.Increase in Foreign Capital Inflow

References

Internet references: http://en.wikipedia.org/wiki/Dematerialisation NKGSB CO-OP.BANK LTD http://www.pdclipart.org/thumbnails.php?album State bank of India-Details of demat. Icon commerce classes. SYJC notes. Subject: Secretarial Practice. Chapter: Demat & Depositories.