Dematerialisation

Dematerialisation is the ferment of converting the somatogenic form of shares into electronic form. Prior to dematerialisation the Indian stock markets have faced several problems like hold up in the steer of certificates, forgery of certificates etc. Dematerialisation helps to overcome these problems as well as reduces the transaction time as compared to the carnal segment. The article discusses the procedures, advantages and problems of dematerialisation.
The Indian Stock markets have seen a major(ip) change with the introduction of sedimentation system of rules and scrip less vocation mechanism. There were various problems like inordinate delays in the transfer of share certificates, delay in receipt of securities and inadequate groundwork in banking and postal segments to handle a large sight of application and storage of share certificates .To overcome these problems physical dealings in securities should be eliminated . The Indian stock market introduced the system of dematerialisation recognizing the need for scrip less trading.
According to the Depositories Act, 1996, an investor has the option to hold shares all in physical or electronic form .The process of converting the physical form of shares into electronic form is called dematerialisation or in short demats.



The converted electronic data is stored with the depository from where they weed be traded. It is similar to a bank where an investor opens an note with whatsoever of the depository participants. Depository participant is a representative of the depository .The DP maintains the investors securities account balances and intimates him about the status of holdings.
Procedure for converting the physical shares into electronic form.
To convert the shares into electronic form the investor should open an account with any of the depository participants. For opening an account the investor has to fill up the account opening form. An account number (client ID) will be allotted after signing the agreement which...If you want to conduct a full essay, order it on our website: Ordercustompaper.com



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