Demat Trading
Instead of signing the transfer deed as seller and delivering
share certificates to a broker, you shall give your DP debit
instruction when you sell your shares in the electronic form. You
can trade through any broker of your choice registered with the
stock exchanges connected with NSDL but will have to provide the
details of your account with the DP. The money would be received
from the broker/ paid to the broker in the same fashion as done in
case of buying/ selling of physical shares. The DP will provide
you a statement updated every fortnight giving details of your
holdings.
Shares bought in the electronic form can be pledged/ hypothecated
by making application to the DP in the prescribed form. For the
purpose of calculation of capital gains tax, the cost of
acquisition of shares would be determined on the principle of
first in first out. The process of opening an account with a DP is
similar to the opening of bank account. Photograph, Introduction
and signing the prescribed agreement form are some of the
requirements.
If there are any discrepancies in your holdings statement or pass
book entries, you can contact your DP. If the problem cannot be
resolved at DP end, you can approach NSDL. There is absolutely no
restriction to the number od DPs you can open accounts with. Just
as you can have savings or current accounts with more than one
bank, you can open accounts with more than one DP.
There is no minimum balance required for your account with DP. In
fact you could have nil security in your account.
What's the security that a person have with respect to proof of
his holdings? Upon opening an account with DP, you sign an
agreement where the DP indemnifies you for any misuse of your
holdings.
When any company announces right, bonus or dividend for a
particular security, the DP will give details of the clients
having electronic holdings of that security as of record date/
book closure to the registrar. The registrar will then calculate
the benefits due to all shareholders. The disbursement of cash
benefits like dividend or interest will be done by the registrar
whereas distribution of securities entitlements will be done by
the DP based on information provided by the registrar.
The investor retains the choice of receiving the corporate
benefits in physical or electronic form. For discrepancies in
corporate benefits in the form of securities, you can approach
your DP who will then approach the registrar. In case of
discrepancies in cash benefits, you will have to contact the
registrar directly.
|
