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

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

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

Participants:
Investors
The

Depository

NSDL [national securities depository ltd.]

CDSIL[central depository of securities india ltd.]

The

Depository Participants

The

Issuing Company

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

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.

A 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.

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
Investors depository
a/c would be credited
with the dematerialised
securities

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.

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

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 brokers 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
You

receives payment from the clearing corpo.

receive the payment accordingly.

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

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