“IIP- 2012- SECOND PROJECT REPORT”
COMPANY: “RELIANCE SECURITIES LIMITED”
PROFILE: CAPITAL INVESTMENT MARKET
P.REWANTH KUMAR 2B2-36- BIFAAS
* INTRODUCTION TO DEMAT ACCOUNT:
* EVOLUTION OF DEMAT ACCOUNT:
The term "demat", in India, refers to a dematerialised account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as required for investors by the Securities and Exchange Board of India (SEBI). In a demat account, shares and securities are held electronically instead of the investor taking physical possession of certificates. A demat account is opened by the investor while registering with an investment broker (or sub-broker). The demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Access to the demat account requires an internet password and a transaction password. Transfers or purchases of securities can then be initiated. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed. Demat accounts are very popular in India. Demat account is the short form of Dematerialised Account. In fact according to SEBI, Demat accounts are now compulsory. Previously during the time of Harshad Mehta (1992), the shares were trading in physical forms. And this was the reason why some fraudsters were taking the advantage of this opportunity to print fake shares and selling it to public. But after Harshad Mehta Scam, SEBI has decided to transact shares only in Dematerialised form (Electronic form) so that every transaction can be monitored and these types of scams can be avoided. Demat account which refers to a dematerialised account. The Demat account is there for individual Indian citizens to trade in listed stocks or debentures the Securities Exchange Board of India (SEBI) requires the investor to maintain a Demat account.
A Demat Account is opened by the investor while registering with an investment broker (or sub broker). The Demat account number which is quoted for all transactions to enable electronic settlements of trades to take place. Let's get to know everything that is there to know about the Demat account. * Is Demat account a Must?
Yes, according to SEBI, Demat accounts are now Must in India. Every Investor Must have a Demat account to transact in the Securities. However, according to SEBI, it has allowed trades up to 500 shares to be settled in physical form. But still nobody prefers Physical shares anymore in India. Everybody is preferring Demat accounts Now a days………!!!!!!!!
Advantages of demat:
A demat account also helps avoid problems typically associated with physical share certificates, for example: delivery failures caused by signature mismatch, postal delays and loss of certificate during transit. Further, it eliminates the risks associated with forgery and due to damaged stock certificates. Demat account holders also avoid stamp duty (as against 0.5 per cent payable on physical shares) and filling up of transfer deeds. Demat account holders usually obtain quicker receipts of benefits like stock splits and bonuses. The other advantage is the ability access stocks, bonds, ETFs, IPO, Gold ETF, - A safe and convenient way to hold securities;
- Immediate transfer of securities;
- No stamp duty on transfer of securities;
- Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.; - Reduction in paperwork involved in transfer of securities; - Reduction in transaction cost;
- No odd lot problem, even one share can be sold;
- Nomination facility;
- Change in address recorded with DP gets registered with all companies in which investor holds securities...