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 score up in the steer of certificates, forgery of certificates etc. Dematerialisation helps to chasten 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 arrangement of rules and scrip less life history mechanism. There were various problems like inordinate delays in the channelise of share certificates, delay in receipt of securities and inadequate institution in banking and postal segments to handle a large plenitude of application and storage of share certificates .To overcome these problems material dealing in securities should be eliminated . The Indian stock marke t 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 all in physical or electronic form .The treat 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 sediment from where they potful be traded. It is similar to a bank where an investor opens an note with some(prenominal) of the depository participants. Depository participant is a representative of the depository .The DP mainta ins the investors securities posting balanc! es 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 breeding a full essay, order it on our website: OrderCustomPaper.com

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