Depoistorysystem and dematerialisation Presentation Transcript

It is system where by it transfer and settlement of scrips take place not through the traditional method of transfer deeds and physical delivery of scrips through the modern system of effective transfer takes of ownership of securities by means of book entry on the ledgers of the depository without physical movement of scrips1.

2. : A depository is a firmwherein the securities of an investor are heldin electronic form and who carries out oftransaction of securities by means of bookentry. The depository act as defector ownerof securities lodged with it limited purpose oftransfer of ownership . It function as acustodian of securities of client. There twodepository in India.(a) national securitiesdepository ltd (b) central depository servicesltd

Banking services can be availed through a branch whereas depository services can be availed through a DP3. A Participant is an agent of the depository .He function as bridge in between the depository and beneficial owners. He maintains the ownership record of every beneficial owner in the book entry form.

4. Beneficial ownermeans a person whose name isrecorded as such with depository. Abeneficial owner of securities who haslodged his securities with thedepository in the form of book entry.He has all the rights and liabilitiesassociated with securities.

5. The issuer is a companywhich issues the security. It maintainsa register for recording the name ofregistered owner of securities, thedepositors. these issues send a list ofshareholders ,who opt for thedepository system ,to the depositors.

Nomination facility; No odd lot problem, even one share can be traded; Reduction in transaction cost; Reduction in paperwork involved in transfer of securities; Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc. Immediate transfer of securities; No stamp duty on transfer of securities; A safe and convenient way to hold securities;6.

Holding investments in equity and debt instruments in a single account. Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc. Transmission of securities is done by DP eliminating correspondence with companies; Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;7.

Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. Process of transmission in case of dematerialised holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting documents to the DP, whereas in case of physical securities the legal heirs/nominee/surviving joint holder has to independently corr8. espond with each company in which securities are held.

Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. Process of transmission in case of dematerialised holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting documents to the DP, whereas in case of physical securities the legal heirs/nominee/surviving joint holder has to independently correspond with each company in which securities are held.9.

Dematerialisation is a process where in share certificates held in physical form converted into electronic form and credited to demat account of an investor opened with a depository participants.10.

11. 1 The investor has to open a beneficiary account With a depository participant(DP) of his choice to hold shares in demat.2 Investor has to submit Demat Request form (DRF) and share certificates to DP who in turn will check whether securities are available for demat.

12. 3 The investor should deface the share certificates by stamping surrendered for dematerialisation and DP will punch two holes on the name of the company and draw two parllel lines across the face of the certificates.4 DP enter the demat request to be sent to depository. DP despatches the physical certificates along with the demat request for to the registrar and tranfer agent(TRA) or issuer company.

13. 5 depository records the details of the electronic requests in the system and forward the request to RTA or issuer company.6 RTA or the issuer company on receiving the electronic request and the physical document verifies and checks them. once the RTA company finds that the document are in order, dematerialisation of the securities is electronically confirmed to the depository.

14. 5 depository records the details of the electronic requests in the system and forward the request to RTA or issuer company.6 RTA or the issuer company on receiving the electronic request and the physical document verifies and checks them. once the RTA company finds that the document are in order, dematerialisation of the securities is electronically confirmed to the depository.

15. 7 Depository credits the dematerialised securities to the beneficiary account of the investor and intimates the DP electronically. the DP then issue a statement of transaction of the client.