aims and objective informative report of demat account
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In India, stocks and securities are held electronically in a dematerialized account (or "Demat"), rather than the investor taking physical possession of certificates. A dematerialized account is opened by the investor while registering with an investment broker (or sub-broker). The dematerialized account number is quoted for all transactions that allow the electronic settlement of transactions. Each shareholder will have a dematerialized account in order to transact shares. Access to the dematerialized account requires an Internet password and a transaction password. Transfer or purchase of securities can then commence. Purchases and sales of securities in the dematerialized account are made automatically once transactions are confirmed and completed. Objectives: India has adopted the Demat Electronic Storage System, where stocks and securities are represented and maintained electronically, eliminating the problems associated with paper stock. After the introduction of the deposit system by the Depositary Act of 1996, the process of sales, purchases and transfers of shares became significantly easier and most of the risks associated with paper certificates were mitigated. Demat account form. It was the beginning of a new paperless stock market environment. If an investor buys a stock today, it is credited to the investor's account in two days. Nowadays, the shares are transferred to the demat account of the investor.
Advantages of demat
• The bonus / right shares assigned to the investor will be immediately credited to your account. There is no risk due to losses due to fire, theft or mutilation. Transaction costs are usually lower than the physical segment.
• A demat account also helps avoid problems typically associated with physical stock certificates.
For example: delivery failures caused by mismatch of signatures, postal delays and loss of certificate during transit. In addition, it eliminates the risks associated with forgery and due to damaged stock certificates.
• Demat account holders also avoid the stamp duty (as opposed to 0.5 percent payable on physical stocks) and the filing of transfer deeds.
• The biggest advantage of having demat account is that you do not have to pay the stamp since these are stored electronically that reduce the transaction cost.
Demat Benefits
Demat account of shares and securities for commercial purposes
The benefits of demat are as follows:
• Easy and convenient way of maintaining values
• Immediate transfer of securities
• No stamp duty on the transfer of securities
• More secure than papers (previous risks associated with physical certificates such as poor delivery, false values, delays, theft, etc. are mostly eliminated)
• Reduction of paperwork for the transfer of securities
• Reduced transaction cost
• No "odd batch" problem: even an action can be sold
• The change in registered address with a Depositary Participant (DP) is recorded with all companies in which the investor maintains securities, eliminating the need to correspond with each of them separately.
• The transfer of securities is carried out by the DP, eliminating the need to notify companies.
• Automatic credit in demat account for shares arising from bonus / split, consolidation / merger, etc.
• A single demat account may have investments in both equity and debt instruments.
• Operators can work from anywhere (for example, even from home).