Demat presentation

Dematerialisation Dematerialisation Of Shares & SecuritiesOf Shares & Securities

BY Sruthi RajendranCMR Institute of Technology

What is Demat ?What is Demat ?

Conversion of physical securities into electronic form

It is a process whereby your securities like shares, debentures,etc are converted into electronic data and stored in computers by a depository.

Depository is the body which is responsible for storing and maintaining investor's securities in demat or electronic format. In India there are two depositories i.e. NSDL and CDSL.

Dematerialization may refer to:

Dematerialization (economics) - the reduction in the quantity of materials required to serve economic functions (doing more with less).

Dematerialization (securities) - moving from handling paper securities certificates to book form, usually electronic.

Dematerialization of the art object - an idea in conceptual art where the art object is no longer material.

Dematerialization (products) - using less or no material to deliver the same level of functionality.

Demat accounts - a type of banking account in India where paper-based physical shares are stored electronically.

Teleportation (disambiguation) - the movement of objects from one place to another without travelling through space.

Benefits of Benefits of DematDemat

•  Demat format reduces the risk of bad deliveries

• Time and money is saved as you are not dealing in paper now. You need not go to the

notary, broker for taking delivery or submitting the share certificate

• Liquidity is very high in case of demat format as whole process in automated.

• All the benefits of corporate action like bonus, stock split, rights etc are managed

through the depository leading to elimination of transit losses

• Interest on loan against demat shares are less as compared to physical shares

• Investors save stamp duty while transferring shares in demat format.

• One needs to pay less brokerage in case of demat shares

DEMAT-participantsDEMAT-participants Participants:

◦ Investors

◦ The Depository NSDL [national securities depository ltd.] CDSIL[central depository of securities

india ltd.]

◦ The Depository Participants

◦ The Issuing Company

Established in August 1996 as the first depository in India.

This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialized form in the Indian capital market.

NSDL has around 1,23,84,644 investors associated with it currently and has 14,336 service centers all over India

NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)

CENTRAL DEPOSITORY OF SERVICES LIMITED (CDSL)CENTRAL DEPOSITORY OF SERVICES LIMITED (CDSL)

CDSL received the certificate of commencement of business from SEBI in February, 1999.

All leading stock exchanges like the National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc. have established connectivity with CDSL.

Currently around 81 lakh investors and 12000 companies have admitted their securities (equities, bonds, debentures, commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system.

CDSL has around 568 Depository Participants (DPs) in around 13000 different locations all over India.

Depository ParticipantDepository Participant

A Depository Participant (DP) is an agent of the depository who is authorized 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.

PRECAUTIONSPRECAUTIONS

Holdings in those securities that have not yet been admitted for dematerialisation by NSDL cannot be dematerialised. List of securities admitted for dematerialisation should be verified before defacing the securities.

Holdings in street name cannot be dematerialised. The combination of names of holders as printed on the physical certificate

should be identical with the names initiating the dematerialisation request. Separate dematerialisation requests will have to be filled for locked-in and

free holdings. Separate dematerialisation requests will have to be filled for holdings

locked-in for different reasons. Separate dematerialisation requests will have to be filled for fully paid up

and partly paid-up holdings. Separate dematerialisation requests will have to be filled for holdings in the

different ISINs of a company.

Investors [Beneficial Owner]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

TO OPEN DEMAT ACCOUNT

Open an account with DP

Fill up the Dematerialization Request Form and submit

together with share certificate which is to be demat.

The DP upon receipt of the shares and the DRF, will issue

an acknowledgement and will send an electronic request to

the Company/Registrars and Transfer Agents of the

Company through the Depository for confirmation of

demat.

Documents Required For Demat Documents Required For Demat AccountAccountTo open a Demat account you have to provide

documents which fulfill the requirements of KYC (Know Your Customer) norms. You have to sign a contract with Stock broker. Generally the documents are:

PAN (Compulsory)Bank statement (last 6 months)One cancelled chequeAddress ProofIncome Tax ReturnTwo colour photos

CERTIFICATION PROGRAMCERTIFICATION PROGRAM"NSDL-Depository Operations Module".

This programme helps the candidate to understand and assimilate the procedures to be followed in conducting various transactions in the NSDL depository system. NSDL has made it mandatory for all branches of Depository Participants (DPs) to have at least one person

qualified in the Certification Programme.

Procedure of Demat- Procedure of Demat- for an investor for an investor Fill DRF(Demat

Request Form) available with DP

Deface the share certificate(s) one wants to dematerialize by writing across “Surrendered for Dematerialization”

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 dematerialized securities

The time involved in the The time involved in the processprocess

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.

SPEED-e

SPEED-e enables demat account holders (including Clearing Members) to submit delivery instructions directly on the Internet through SPEED-e website.

IDeAS

IDeAS (Internet-based Demat Account Statement) is the facility for viewing balances and transactions in the demat account updated on an online basis with a delay of maximum 30 minutes.

VALUE ADDED SERVICES [E- service]VALUE ADDED SERVICES [E- service]

STEADY STEADY is a facility which enables the brokers to

deliver/submit contract notes to custodians/ fund managers electronically by transmitting digitally signed trade information with encryption. It further enables fund managers to enrich the contract note and convert it into instructions for the custodian. STEADY can be used for FII Trades and Domestic Institutional Trades.

Depository Account Validation (DAN) Depository Account Validation (DAN) is an secured

internet based facility which provides an online interface enabling subscribers to validate DP ID, Client ID and PAN of investors through a file upload.

Other BenefitsOther Benefits

Allotment directly in Demat form possible,Pledge of Demat holdings possible,Lending/Borrowing of Demat Securities

to/from an Authorized intermediary,Freezing of a/c possible Transmission of holdings,Nomination facility

REMATERIALISATIONREMATERIALISATION

The process of getting the securities in an electronic form, converted back into the physical form is known as Rematerialisation. An investor can rematerialize his shares by filling in a Remat Request Form (RRF).

STATISTICS AS ON AUGUST 31 2014STATISTICS AS ON AUGUST 31 2014

INVESTOR ACCOUNT 133,03,386 DP SERVICE CENTRES 14,291 DEMAT CUSTODY VALUE 105,59,587 Rs 1,746 billion

NSDL STATISTICSNSDL STATISTICSEQUITY SHARES QUANTITY IN

MILLIONVALUE IN RUPEES MILLION

NSE 4,805 1,209369

BSE 3,020 199,543

TOTAL 7,825 1,408,912

DEBT OR BOND SETTLEMENT

4,42600

THANK YOUTHANK YOU