REPORTS STUDY ON

DEMATERIALISATION OF SECURITIES
INDEX
CHAPTER-I:
INTRODUCTION:
Objectives of study
Scope of study
Methodology of study
Limitations of study
CHAPTER-II:
REVIEW OF LIER!"RE
CHAPTER-III;
#OM$!%& $ROFILE
CHAPTER-IV;
'!! !%!L&SIS ( $RESE%!IO%)
*isto+ical bac,g+ound of 'EM!
#u++ent scena+io
!ccount opening and maintenance
Settlements
Remate+ialisation
CHAPTER-V:
#O%#L"SIO%
-I-LIO.R!$*&
0
!$$E%'I#ES
1
CHAPTER-I
INTRODUCTION
2
FINANCE:
Finance is the p+ocess of conve+sion of accumulated funds to
p+oductive usage/ Finance helps to di+ect the flo0 of economic ( facilitate in
the fi+m1s smooth ope+ations/
!cco+ding to *OW!R' !%' O$IO%S Finance is defined as 2the
administ+ation a+ea of set of administ+ative functions in an o+gani3ation
0hich has to do 0ith the management of flo0 of cash so that the
o+gani3ation 0ill have the means 4 ca++y out its objectives as satisfacto+y as
possible and at the same time meet the obligations as they become due2/
FINANCIAL SYSTEMS:
It is a set of ma+,ets and institutions to facilitate the e5change of assets
and +is,s/ Indian financial system comp+ises of th+ee pa+ts vi3/6 FI%!%#I!L
I%SI"IO%S o+ I%ERME'I!RIES6 FI%!%#I!L M!R7ES6
FI%!%#I!L I%SR"ME%S/ Financial Inte+media+ies6 p+ovide funds by
pooling the funds f+om investo+s/ hey a+e the comme+cial ban,s6 mutual
funds6 insu+ance companies6 p+ovident funds6 facto+s (non ban,ing financial
institutions etc///Financial inst+uments6 th+ough 0hich the fi+m can +aise
funds f+om public o+ institutions/ Some of them a+e e8uity sha+es6
p+efe+ential sha+es6 bonds6 comme+cial pape+s6 ce+tificate of deposits etc///
FINANCIAL MARKETS:
Financial ma+,ets consist of t0o pa+ts/
9: #apital ma+,et
4: Money ma+,et
3
Money ma+,et is a ma+,et fo+ dealing in moneta+y assets of sho+t;te+m
natu+e fo+ meeting the tempo+a+y cash +e8ui+ements/ #apital ma+,et is a
ma+,et fo+ long;te+m funds/ #apital ma+,et has t0o
segments/
9: $+ima+y ma+,et <%e0 Issues Ma+,et:
4: Seconda+y ma+,et
he %e0 Issue Ma+,et deals in ne0 secu+ities i/e/ Secu+ities6 0hich a+e not
p+eviously offe+ed to the investo+s/ he p+ima+y ma+,et does not have any
o+gani3ational setup and is +ecogni3ed only by the specialist institutional
se+vices that it +ende+s to the lende+s and bo++o0e+s of capital funds/
he seconda+y ma+,et deals in old=e5isting secu+ities6 0hich 0e+e
g+anted in stoc, e5change listing/ Stoc, e5changes p+ovide li8uidity to
investments/ It has a physical e5istence and a geog+aphical a+ea/
4
OBJECTIVES OF THE PROJECT:
o ,no0 the mechanism in the 'emat
o study the activities in $+ima+y Ma+,et and Seconda+y Ma+,et in
the conte5t of 'emate+iali3ation
o study the activities of 'eposito+y $a+ticipants
o study the p+ocess of Settlement
o study the p+ocess of 'EM!
o ,no0 the advantages of the 'EM!
o ,no0 the se+vices p+ovided by the 'eposito+y $a+ticipant
SCOPE OF THE STUDY:
he scope of the study is confined to the p+ocess of demate+iali3ation of
secu+ities and its advantages/
he scope of the p+oject is limited to the deposito+y pa+ticipant se+vices
th+ough deposito+s/
5
METHODOLOGY OF THE STUDY:
he study is based on both the p+ima+y and the seconda+y sou+ces of
data/
he sou+ce of p+ima+y data is f+om the unst+uctu+ed inte+vie0 of the
officials in the company/
he seconda+y data is collected f+om the 0ebsites)
000/nseindia/com
000/moneycont+ol/com
LIMITATIONS OF THE PROJECT:
-y not conside+ing the enti+e deposito+y pa+ticipant1s implications
elating to the patte+n of t+ading may have been missed in the study/
he study is confined to only deposito+y pa+ticipants se+vices th+ough
'eposito+ies
%S'L/ E5haustive analysis6 p+oblems of listing and management of
t+ade and SE-I guidelines of +elating the+e lot a+e not cove+ed due to
limited & ,eep the study in manageable limits
6
CHAPTER-II
REVIEW
OF
LITERATURE
7
DEMATERIALISATION
DEFINITION:
'emate+iali3ation is the p+ocess by 0hich a -O can get his physical
secu+ities conve+ted into elect+onic fo+m/
$+e;+e8uisites fo+ demate+iali3ation a+e)
9/ Investo+ should have a demat account 0ith any '$ of #'SL/
4/ Secu+ities to be demate+iali3ed must have been admitted in #'SL
i/e/ ISI% fo+ the secu+ities should be available in #'SL
>/ Investo+ should be the +egiste+ed holde+ fo+ the secu+ities in the
boo,s of the company/
he -O submits a +e8uest to the '$ in the 'emate+iali3ation Re8uest
Fo+m <'RF: along 0ith the ce+tificates/ he '$ ve+ifies the info+mation on
the 'RF and physical ce+tificates and ente+s the details in the system to
setup a +e8uest elect+onically/ he '$ sends the physical documents to the
conce+ned issue+=R!/ If the Issue+=R! find the 'RF and ce+tificates in
o+de+6 it +egiste+s #'SL as the +egiste+ed holde+ of the secu+ities and
confi+ms the 'R% elect+onically to #'SL/ On +eceiving such confi+mation6
#'SL c+edits the -O account/ he p+ocess flo06 of a demat +e8uest is
given belo0)
8
If the issue+=R! +ejects all o+ some of the ce+tificates in a demat
+e8uest then the same a+e sent bac, to the '$ mentioning the +ejection
+eason<s:/ '$ 0ill then as, the -O to +ectify the +eason of +ejection and
send the ce+tificates again fo+ demate+iali3ation unde+ a f+esh demat +e8uest/
'emate+iali3ation can be no+mal demate+iali3ation as e5plained above
o+ it can be 2+ansfe+;cum;'emate+iali3ation <#':2 o+ 2+ansposition;cum;
'emate+iali3ation2/
TRANSFER-CUM-DEMATERIALIZATION:
When physical secu+ities a+e sent to the issue+ = R! fo+ t+ansfe+s by
the buye+6 the Issue+=R! completes the t+ansfe+ p+ocess and +eco+ds the
secu+ities in the name of the conce+ned buye+ in the Registe+ of Membe+s/
If the Issue+=R! is p+oviding t+ansfe+ cum demate+iali3ation facility6
the ce+tificates a+e not dispatched to the conce+ned buye+/ Instead the
Issue+=R! intimate the buye+ about the t+ansfe+ and gives the buye+ an
option to hold the t+ansfe++ed secu+ities in demat fo+m by issuing an 2Option
lette+2/
he investo+ on +eceiving such an option lette+ may opt fo+ holding
the t+ansfe++ed secu+ities in demats fo+m/ In such a case6 the investo+ has to
open a demat account6 if not al+eady opened6 fill up a 'RF6 attach the option
lette+ along 0ith the 'RF and submit it to the '$/ Rest of the p+ocess
+emains same as e5plained above fo+ no+mal demat/
9
+ansfe+;cum;demat +e8uest can be set;up fo+ a 8uantity up to ?@@
secu+ities only/ In case the Issue+=R! does not +eceive demat +e8uest
0ithin >@ days of the date of issuing the option lette+ then the physical
secu+ities may be dispatched to the conce+ned buye+ di+ectly/
TRANSPOSITION-CUM-DEMATERIALISATION:
+ansposition is applicable in situation 0he+e the demat account has
been opened in the name of !6-6# and some of the ce+tificates a+e in any
othe+ o+de+ of holde+ names such as !6#6- o+ -6#6 ! o+ #6-6! etc/6 i/e/
holde+s names a+e same but o+de+ in 0hich they appea+ is diffe+ent/
DEMATERIALIZATION PROCEDURE:
ACTION BYB.O.;
NORMAL DEMAT:
Fo+ demate+iali3ation -O should submit the follo0ing documents to the '$
1. 'uly filled 'RF giving all details as +e8ui+ed on the fo+m/ he 'RF
should be signed by account holde+<s: o+ po0e+ of atto+ney <if any:/
4/ $hysical ce+tificates
'emat +e8uests fo+ loc,;in secu+ities cannot be set up along 0ith the f+ee
secu+ities i/e/ the -O 0ill have to fill sepa+ate 'RF fo+ secu+ities 0hich a+e
f+ee <0ithout encumb+ances: and a sepa+ate 'RF fo+ secu+ities unde+ loc,;
10
in 0ith diffe+ent loc,;,n +easons and diffe+ent loc,;in e5pi+y dates/
Lo!-"# $%&'o# &# (% &#) o* +,% *o--o."#/:
9/ 'i+ecto+ = Relative Auota
4/ Employee Auota
>/ $+efe+ential allotment
B/ $+omote+s Auota
?/ "nde+0+ite+s Auota
C/ $+ivate $lacement
D/ ?BE <a: of I !ct 9EC9
F/ ?BE<b:of I !ct 9EC9
TRANSFER CUM DEMAT:
In case of +ansfe+;cum;'emat6 -O should submit the follo0ing documents
to the '$/
9/ 'uly filled 'RF
4/ O+iginal option lette+ +eceived f+om the Issue+=R!
11
TRANSPOSITION CUM DEMAT:
In case the -O intends to t+anspose and demat the secu+ities follo0ing
documents have to the submitted to the '$
9/ 'uly filled 'RF
4/ 'uly filled R$F
ACTION BY DP:
On +eceiving a 'RF along 0ith othe+ documents f+om the -O6 '$
must ensu+e the follo0ing befo+e accepting the same)
9/ he secu+ities intended fo+ demate+iali3ation a+e admitted by #'SL/
If not then the '$ shall info+m the same to the investo+/
4/ #o++ect ISI% is selected 0he+e the secu+ity of an Issue+ has mo+e then
one ISI%/
>/ #e+tificates a+e in names of ma5imum th+ee holde+s only/
12
T,% DP 01'+ 2%$"*) +,% *o--o."#/:
9/ he 'RF6 the R$F <if applicable: a+e filled completely/
4/ he ce+tificate details mentioned on the 'RF and on the
ce+tificates enclosed6 tally/
>/ %ame<s: of the holde+<s: appea+ing on the ce+tificates e5actly
tally 0ith those +eco+ded unde+ the -O account maintained 0ith
#'SL/
B/ !ll the holde+s have signed the 'RF6 the R$F <if applicable: and the
signatu+e of the account holde+s1 match 0ith those +eco+ded by
the '$/
If the+e is any disc+epancy in any of the details6 the '$ 0ill get the
same +ectified f+om the investo+ and the e++o+ f+ee 'RF 0ill be ta,en up fo+
fu+the+ p+ocessing by the '$/ Immediately on +eceipt of 'RF along 0ith the
ce+tificates6 the '$ should give an ac,no0ledgement to the -O/
he details f+om the 'RF ( the ce+tificates a+e ente+ed in the #'SL
system/ On successful ent+y of details6 the system gene+ates a uni8ue
numbe+ called as 'emat Re8uest %umbe+ <'R%:6 0hich se+ves as a
+efe+ence numbe+/ he '$ 0+ites the 'R% on the 'RF/ he 'RF
details a+e immediately available elect+onically to the Issue+=R! afte+ the
'R% is gene+ated/
13
he '$ 0ill deface and mutilate the ce+tificates to avoid misuse in
case they a+e lost in t+ansit/ he '$ 0ill autho+i3e the 'RF by putting his
seal ( signatu+e/ he ce+tificates ( the o+iginal 'RF is sent to the
Issue+=R! along 0ith a cove+ing lette+/ ! copy of the 'RF is to be
maintained by the '$ fo+ its o0n +efe+ence and +eco+ds/
he '$ 0ill then captu+e the dispatch details such as the dispatch
+efe+ence no6 dispatch date6 name of the cou+ie+ etc in the #'SL system/
he '$ must dispatch the physical documents 0ithin D 0o+,ing days f+om
the date of +eceipt of physical documents by the -O/
ACTION BY ISSUER 3 RTA:
he Issue+ = R! must complete the demate+iali3ation p+ocess 0ithin a
pe+iod of 9? days6 o+ any such pe+iod as specified by #'SL f+om time to time6
f+om the date of physical +eceipt of the 'RF/ he p+ocedu+e given belo0 is
also applicable to +ansfe+;cum;'emat = +ansposition/
!fte+ +eceiving 'RF along 0ith physical ce+tificates and othe+
documents as the case may be6 the Issue+ = R! 0ill access elect+onic details
f+om the #'SL system/ he Issue+ = R! 0ill chec, 0hethe+ the)
9/ 'RF is autho+i3ed by the '$/
4/ 'etails as mentioned on the 'RF and as +eceived elect+onically f+om
#'SL6 tally
>/ Signatu+e of -O1s on the 'RF tally 0ith the signatu+es +eco+ded by
him/
14
If the elect+onic and physical details match then the Issue+=R! gives
c+edit in the -O1s demat account and t+ansfe+s the +egiste+ed o0ne+ship of
secu+ities in the name of #'SL/ he Issue+ = R! shall info+m the details of
the secu+ities demate+iali3ed to all stoc, e5changes 0he+e the secu+ity is
listed <as pe+ the +e8ui+ements of the +espective stoc, e5changes:/ he
Issue+ = R! should also fu+nish such a ce+tificate to #'SL on a 8ua+te+ly
basis/
If the elect+onic and physical details do not tally6 the Issue+=R! 0ill
info+m the '$/ he 'RF6 ce+tificates and any othe+ documents +eceived
along 0ith the 'RF 0ill be sent bac, to the '$ unde+ +ejection/ !pp+op+iate
+eason of +ejection must be specified so as to enable the '$ to +ectify the
same/
he majo+ +easons unde+ 0hich a demat +e8uest can be +ejected by an
Issue+=R! a+e as unde+
9/ 'RF=#e+tificates<s: not +eceived 0ithin 9? days f+om the date of
elect+onic +e8uest logged into the system by the '$
4/ 'RF not complete
>/ Signatu+e <s: does not match
B/ Fo+ged=Fa,e=Stolen #e+tificate
?/ 'uplicate ce+tificate al+eady issued
15
9/ *olde+s1 name<s: does not match
4/ #e+tificate details do not match
>/ #ou+t injunction
B/ 'RF sent to inco++ect Issue+=R!
?/ Auantity mentioned on the ce+tificates is mo+e o+ less than elect+onic
+e8uest
C/ Stop t+ansfe+
D/ #e+tificate of inco++ect ISI% being missed up in the 'RF
F/ #e+tificates1 having diffe+ent loc,;in +elease dates being missed up
0ith the same 'RF
E/ 'R% set up unde+ 0+ong ISI9?/+ansfe+ cum demat ;; #e+tificate<s:
sent to -O
16
CHAPTER-III
COMPANY PROFILE
17
COMPANY PROFILE
India is on the th+eshold of ente+ing a ne0 economic e+a/ !n e+a of
fast paces economic g+o0th/ With va+ious ne0 comme+cial oppo+tunities
opening up/ hese ne0 indust+ies and business ventu+es a+e often global
;Multi nationals6 collabo+ations6 joint ventu+es6 technology t+ansfe+s a+e the
ne0 bu33 0o+ds/ Establishing and developing these gen+es of companies is a
complicated p+ocess/ In today1s scena+io of f+enetic activity6 the need fo+
8uality financial se+vices is acute/
o c+ystalli3e these p+ojects a financial company that unde+stands the
individual needs is +e8ui+ed/ hus the need fo+ "S*!7IR!% FI%!%#E
LIMIE' is it p+oviding co+po+ate finance o+ in management of issues o+ in
dealing 0ith the secu+ities ma+,et/
"S*!7IR!% FI%!%#E LIMIE' is an e5isting p+ofit ma,ing
company/ It is an integ+ated finance company established essentially as a
fund based financial se+vice o+gani3ation as dive+sified its +ange of activities
f+om fund based to non fund based activities and fu+the+ stepped up and
e5panded the fund based activities and othe+ financial se+vices/
It is a p+ofessionally managed company comp+ising cha+te+ed
accountants6 #ompany Sec+eta+ies6 M-!s6 #ost !ccountants and soft0a+e
p+ofessionals/ With an inf+ast+uctu+e that matches 0ith the inte+national
standa+ds and p+actices6 staff suppo+t and st+ong net0o+,6 the company
efficiently cate+s financial se+vices to its dive+se clientele/
18
he -oa+d of 'i+ecto+s of the company comp+ises eminent and e5pe+ienced
p+ofessionals 0ho have got abundant e5pe+ience by vi+tue of thei+
association ea+lie+ 0ith public secto+ unde+ta,ings and multi national unde+
ta,ings/ Sh+i /!'I%!R!&!%! the chief p+omote+ is a membe+ of the
Institute of #ha+te+ed !ccountants of India6 the I#W! of India and I#S of
India/ *e 0as associated 0ith the financial institute fo+ about E yea+s and is
0ell ve+sed in all aspects of te+m lending6 p+oject financing6 and p+oject
adviso+y se+vices/ Many Leading indust+ial conglome+ated has used the
se+vices pa+ticula+ly in the a+eas of finance6 ta5ation6 sec+eta+ial and public
issues +elated matte+s/ *e is also a membe+ of the *yde+abad Stoc,
E5change Limited/
he company cate+s mainly to the +e8ui+ements of co+po+ate clients in the
va+iety of activities 0hich include the follo0ing)
Leasing and *i+e pu+chase finance
Inte+ co+po+ate deposits
-ill 'iscounting
Loans Syndication
$lacement of #omme+cial pape+s
Me+ge+s6 !malgamations and !c8uisitions
$+oject #ounseling and !dviso+y Se+vices
$+oject !pp+aisals
"nde+ 0+itings
Me+chant -an,ing
Issue Management
$lacement of Secu+ities
Ma+,eting of $ublic issues
-+ought out deals
$lacement of sha+e to %RGs=O#-s6 FIs6 and FIIs
Fund Management
E8uity Resea+ch !nalysis
Investment -an,ing
Stoc, -+o,ing and #ommodities t+ading
Goint Ventu+es
19
CHAPTER-IV
DATA ANALYSIS
4
INTERPRETATION
20
HISTROCIAL BACKGROUND OF DEMATERIALISATION:
Ea+liest +eco+ds of secu+ities t+ading in India a+e available f+om the
end of the eighteenth centu+y/ -efo+e 9F?@6 the+e 0as business
conducted in Mumbai in sha+es of ban,s and the secu+ities of the East
India #ompany6 0hich 0e+e conside+ed as Secu+ities fo+ buying6 selling
and e5change/ he sha+es of the comme+cial -an,6 Me+cantile -an, and
-an, of -ombay 0e+e some of the p+ominent sha+es t+aded/ he business
0as conducted unde+ a sp+a0ling banyan t+ee in f+ont of the o0n *all6
0hich is no0 in the *o+niman #i+cle $a+,
In 9F?@6 the #ompanies !ct 0as passed and that he+alded the
commencement of the joint stoc, companies in India6 it 0as the !me+ican
civil 0as that helped Indians to establish b+o,ing business/ he leading
b+o,e+6 S,$" P$%0,&#5 Ro),&#5 designed and developed the
p+ocedu+e to be follo0ed 0hile dealing in sha+es/
In 9FDB6 the 'alai St+eet became the p+ominent place fo+ meeting of
the b+o,e+s to conduct thei+ business/ he b+o,e+s o+gani3ed an association
on E
th
Guly 9FD? ,no0n as 2%ative Sha+e and Stoc, -+o,e+s !ssociation2 to
p+otect the cha+acte+6 status and inte+est of the native b+o,e+s/ hat 0as the
foundation of he Stoc, E5change6 Mumbai/ he E5change 0as
established 0ith >9F membe+s/
21
he Stoc, E5change6 Mumbai did not have to loo, bac, as it sta+ted
+iding high in the ladde+ of g+o0th/ he Stoc, E5change is a ma+,et place6
li,e any othe+ cent+ali3ed ma+,et6 0he+e buye+s and selle+s can t+ansact
business in secu+ities at a given point of time in a convenient and
competitive manne+ at the fai+est possible p+ice/ In Ganua+y 9FEE6 M+/ Games
M/ MacLean6 M/$/6 inaugu+ated the -+o,e+s1 *all/
!fte+ the Fi+st Wo+ld Wa+6 the Stoc, E5change 0as housed p+ope+ty at
an old building nea+ the o0n *all/ In 9E4F6 the p+esent p+emises 0e+e
ac8ui+ed su++ounded by 'alai St+eet6 -ombay Samacha+ Ma+g and *amam
St+eet/ ! ne0 building6 the p+esent location6 0as const+ucted and 0as
occupied on 9
st
'ecembe+ 9E>@/
In 9E?@ the +egulation of business in secu+ities and stoc, e5changes
became an e5clusively #ent+al gove+nment subject follo0ing adoption of the
#onstitution of India/ In Secu+ities #ont+acts <Regulation: !ct 0as passed
by the $a+liament of India6 to +egulate the secu+ities ma+,et6 SE-I 0as
initially established on Octobe+ 946 9EFF as an inte+im boa+d unde+ cont+ol of
the Minist+y of Finance6 gove+nment of India/ In 9EE46 the SE-I !ct 0as
passed th+ough 0hich the SE-I came into e5istence/
*ence SE-I ac8ui+ed statuto+y status on >@
th
Ganua+y 9EE4 by passing an
o+dinance6 0hich 0as subse8uently conve+ted into an !ct passed by the
$a+liament on !p+il B6 9EE4/
22
he main objectives of SE-I a+e to p+otect the inte+est of the
investo+s6 +egulate and p+omote the capital ma+,et by c+eating an
envi+onment6 0hich 0ould facilitate mobili3ation of +esou+ces th+ough
efficient allocation6 and to gene+ate confidence among the investo+s/ !s
such6 SE-I is +esponsible fo+ +egulating stoc, e5changes and othe+
inte+media+ies 0ho may be associated 0ith the capital ma+,et and the
p+ocess of public companies +aising capital by issuing inst+uments that 0ill
be t+aded on the capital ma+,et/ SE-I has been empo0e+ed by the #ent+al
.ove+nment to develop and +egulate capital ma+,ets in India and the+eby
p+otect the inte+est of the investo+s/
In 9EE46 Ove+ the #ounte+ E5change of India <O#E: came into
e5istence 0he+e e8uities of small companies a+e listed/ In 9EEB6 %ational
Stoc, E5change <%SE: came into e5istence6 0hich b+ought an end to the
open cut;c+y system of t+ading secu+ities 0hich 0as in vogue fo+ 9?@ yea+s6
and int+oduced Sc+een -ased +ading <S-: system/ -SE1s On Line +ading
System 0as launched on Ma+ch 9B6 9EE?/ %o0 the t+ading in secu+ities is
done using sc+een based t+ading method th+ough duly autho+i3ed membe+s of
the e5change/
In S-6 investo+s place buy and sale o+de+s 0ith thei+ b+o,e+s 0ho
ente+ the o+de+s in the automated t+ading system/ When buy and sale o+de+s
match6 a t+ade is gene+ated and t+ade details a+e given to the +espective
b+o,e+s/ !fte+ a t+ade has ta,en place6 the buye+ has to pay money and the
selle+ has to delive+ secu+ities/
23
On the stoc, e5change<s:6 hund+eds and thousands of t+ades ta,e place
eve+y day/ -uye+s and selle+s a+e sp+ead ove+ a la+ge geog+aphicalH a+ea/ 'ue to
these p+oblems completing a t+ade by paying cash to selle+ and secu+ities to
buye+ immediately in e5ecution of t+ades on an individual basis in
vi+tually impossible/ So the stoc, e5changes allo0 t+ading to ta,e place fo+ a
specified pe+iod6 0hich is called as a 1+ading #ycle1/
! uni8ue settlement numbe+ identifies each t+ading cycle/ Once the
t+ading pe+iod is ove+6 buye+ b+o,e+ pays money and selle+ b+o,e+ delive+s
secu+ities to the ##=#* on a p+edefined day/ his p+ocess is called as $ay;in/
!fte+ pay;in6 secu+ities a+e given to the buye+ b+o,e+s and the ##=#* gives
money to the selle+ b+o,e+/ his p+ocess is called as $ayout/ his p+ocess of
pay;in and payout is called settlement/
Initially the t+ading cycle 0as of one fo+tnight6 0hich 0as +educed to
one 0ee,/ he t+ansactions ente+ed du+ing this pe+iod6 of a fo+tnight o+ one;
0ee,6 0e+e used to be settled eithe+ by payment fo+ pu+chase o+ by delive+y
of sha+e ce+tificates sold on notified days one fo+tnight o+ one 0ee, afte+ the
e5pi+y of the t+ading/ he settlement schedules a+e made ,no0n to the
membe+s of the e5change in advance/
24
he 0ee,ly settlement pe+iod 0as +eplaced by daily settlements6
popula+ly ,no0n as +olling settlements6 in 0hich each day is sepa+ate t+ading
day/ With effect f+om 'ecembe+ 4@@96 I? +olling settlement cycles 0as
int+oduced fo+ all e8uities 0he+e 11 is the 1+ading 'ay1 and pay;in and
$ayout fo+ the settlement 0as done on ?
th
business day afte+ t+ade day/ Fo+
e5ample6 if 0as Monday6 the pay;in and payout 0e+e done on ne5t
Monday6 as Satu+day and Sunday a+e not counted as business days/ I?
cycles 0e+e fu+the+ sho+tened to I> settlement cycle 0/e/f/ !p+il 96 4@@4/
CURRENT SCENARIO:
SE-I has since int+oduced I4 +olling settlements f+om !p+il 96 4@@>/ I4
settlement cycle means that the final settlement of t+ansactions done on 6
i/e/ t+ade day by e5change of monies and secu+ities bet0een the buye+s and
selle+s +espectively occu+s on second business day afte+ the t+ade day
e5cluding Satu+days6 Sundays6 ban, holidays and e5change holidays/
DAY ACTIVITY

+ading and daily do0nloading of statements

sho0ing details of t+ansaction and ma+gins at the end
of each t+ading day
C !=D !J ent+y by the membe+; b+o,e+s=confi+mation by
the custodians
I 9 #onfi+mation of C!=D! data by the custodians up to a
specified deadline time/ 'o0nloading of secu+ities and
funds obligation statement by membe+s/
25
I 4 $ay;in of funds and secu+ities and payout of funds and
secu+ities by $+e;specified deadline times/ he
membe+s a+e +e8ui+ed to submit the pay in inst+uctions
fo+ funds and secu+ities to ban,s and deposito+ies
+espectively/
I > !uction fo+ sho+tages in delive+y of secu+ities
I B !uction pay;in and pay;out of funds and secu+ities/
JC!=D!) ! mechanism 0he+eby the obligation of setting the t+ansactions
done by a membe+ b+o,e+ on behalf of a client is passed on to a custodian
based on his confi+mation/ he custodian can confi+m the t+ades done by the
membe+s on;line/
+ading on the on;line sc+een based system <-SE1s On;Line +ading
system6 -OL fo+ -SE and %ational E5change fo+ !utomated +ading6
%E! fo+ %SE: is conducted f+om Monday to F+iday bet0een E)?? a/m/ and
>)>@ p/m/ he sc+ipts t+aded on he Stoc, E5change6 Mumbai a+e classified
into 1!16 1-916 -4161#16 1F16.16 and 1KLH g+oups/
!6 -96 -4 and # g+oup1s +ep+esent the e8uity ma+,et segment/
F g+oup +ep+esents the debt ma+,et <fi5ed income secu+ities: segment/
-SE has commenced t+ading in .ovt/ Secu+ities fo+ +etail investo+s unde+ .
26
g+oup 0/e/f/ Ganua+y 9C6 4@@>/
K g+oup cove+s the companies6 0hich have failed to comply 0ith listing
+e8ui+ements and=o+ failed to +esolve investo+ complaints o+ have not made
the +e8ui+ed a++angements fo+ demate+iali3ation of thei+ secu+ities 0ith both
the deposito+ies/
PROBLEMS WITH PHYSICAL MODE OF SETTLEMENT:
he capital ma+,et 0as a ma+ginal institution in the financial ma+,et
fo+ almost th+ee decades afte+ India1s independence/ *o0eve+6 until late
eighties the common man ,ept a0ay f+om capital ma+,ets/
%ot many companies accessed the capital ma+,et and6 thus6 the
8uantum of funds mobili3ed th+ough the ma+,et 0as meage+/ ! majo+
p+oblem6 ho0eve+6 continued to plague the ma+,et/ he Indian ma+,ets 0e+e
lite+ally 0eighed do0n by the need to deal 0ith sha+es in the pape+ fo+m/
he+e 0e+e p+oblems galo+e 0ith handling documents ;; fa,e and
stolen sha+es6 fa,e signatu+es and signatu+e mismatches6 duplication and
mutilation of sha+es6 t+ansfe+ p+oblems etc/ he t+ading volumes 0e+e small
due to small investing population/
27
T,% *o--o."#/ &$% 'o0% o* +,% 0&6o$ 7$o(-%0' *&%5 *o$ 7,)'"&-
%$+"*"&+%' () +,% "#2%'+o$':
a/ Ino+dinate delay in +eceiving secu+ities afte+ t+ansfe+ by the
companies/
b/ Retu+n of sha+e ce+tificates as bad delive+ies on account of signatu+e
mismatch o+ fo+ged signatu+e of t+ansfe+o+ o+ fa,e ce+tificates/
c/ 'elay in +eceipt of secu+ities afte+ allotment by the companies/
d/ %on +eceipt of secu+ities/
e/ $+ocedu+al delays in getting duplicate sha+es=debentu+e ce+tificates/
f/ Sto+ing physical ce+tificates/
Lac, of mode+ni3ation became a hind+ance to g+o0th of seconda+y
ma+,et and +esulted in c+eation of cumbe+some p+ocedu+es and pape+ 0o+,/
*o0eve+6 the +eal g+o0th and change occu++ed f+om mid;eighties in the
0a,e of libe+ali3ation initiatives of the .ove+nment/
he +efo+ms in the financial secto+ 0e+e envisaged in the ban,ing
secto+6 capital ma+,et6 secu+ities ma+,et +egulation6 mutual funds6 fo+eign
investments and .ove+nment cont+ol/
28
hese institutions and stoc, e5changes e5pe+ienced that the pape+
ce+tificates a+e the main cause of investo+ dispute+s and a+bit+ation cases/
hus6 the .ove+nment of India decided to set up a fully automated and high
technology based model e5change6 0hich 0ould offe+ sc+een based t+ading
and deposito+ies as the ultimate ans0e+ to all such +efo+ms/
he+efo+e6 the .ove+nment of India p+omulgated the 'eposito+ies
O+dinance in 9EE?/ *o0eve+6 both *ouses of $a+liament passed the
'eposito+ies !ct in 9EEC/ he unpa+alleled success of the int+oduction of
the deposito+y concept in the Indian capital ma+,ets is +eflected in the on;
going successful +eduction in the pe+iod bet0een t+ading and settlement/
PROBLEMS WITH PHYSICAL MODE OF SETTLEMENT:
he capital ma+,et 0as a ma+ginal institution in the financial ma+,et
fo+ almost th+ee decades afte+ India1s independence/ *o0eve+6 until late
eighties the common man ,ept a0ay f+om capital ma+,ets/
%ot many companies accessed the capital ma+,et and6 thus6 the
8uantum of funds mobili3ed th+ough the ma+,et 0as meage+/ ! majo+
p+oblem6 ho0eve+6 continued to plague the ma+,et/ he Indian ma+,ets 0e+e
lite+ally 0eighed do0n by the need to deal 0ith sha+es in the pape+ fo+m/
he+e 0e+e p+oblems galo+e 0ith handling documents ; fa,e and
stolen sha+es6 fa,e signatu+es and signatu+e mismatches6 duplication and
mutilation of sha+es6 t+ansfe+ p+oblems etc/ he t+ading volumes 0e+e small
due to small investing population/
29
T,% *o--o."#/ &$% 'o0% o* +,% 0&6o$ 7$o(-%0' *&%5 *o$ 7,)'"&-
%$+"*"&+%' () +,% "#2%'+o$':
a/ Ino+dinate delay in +eceiving secu+ities afte+ t+ansfe+ by the
companies/
b/ Retu+n of sha+e ce+tificates as bad delive+ies on account of signatu+e
mismatch o+ fo+ged signatu+e of t+ansfe+o+ o+ fa,e ce+tificates/
c/ 'elay in +eceipt of secu+ities afte+ allotment by the companies/
d/ %on +eceipt of secu+ities/
e/ $+ocedu+al delays in getting duplicate sha+es=debentu+e ce+tificates/
f/ Sto+ing physical ce+tificates/
Lac, of mode+ni3ation became a hind+ance to g+o0th of seconda+y
ma+,et and +esulted in c+eation of cumbe+some p+ocedu+es and pape+
0o+,/ *o0eve+6 the +eal g+o0th and change occu++ed f+om mid;eighties
in the 0a,e of libe+ali3ation initiatives of the .ove+nment/
he +efo+ms in the financial secto+ 0e+e envisaged in the ban,ing
secto+6 capital ma+,et6 secu+ities ma+,et +egulation6 mutual funds6
fo+eign investments and .ove+nment cont+ol/
30
hese institutions and stoc, e5changes e5pe+ienced that the pape+
ce+tificates a+e the main cause of investo+ dispute+s and a+bit+ation cases/
hus6 the .ove+nment of India decided to set up a fully automated and high
technology based model e5change6 0hich 0ould offe+ sc+een based t+ading
and deposito+ies as the ultimate ans0e+ to all such +efo+ms/
he+efo+e6 the .ove+nment of India p+omulgated the 'eposito+ies
O+dinance in 9EE?/ *o0eve+6 both *ouses of $a+liament passed the
'eposito+ies !ct in 9EEC/ he unpa+alleled success of the int+oduction of the
deposito+y concept in the Indian capital ma+,ets is +eflected in the on;going
successful +eduction in the pe+iod bet0een t+ading and settlement/
ACCOUNT OPENING AND MAINTENANCE:
!n individual 0ho 0ants to ,eep his = he+ cash safe in a ban, has to
open an account 0ith a ban, as a fi+st step and maintain cash in boo, ent+y
fo+m/ Simila+ly6 an investo+ has to open a demat account 0ith any '$ of
#'SL as a fi+st step to hold secu+ities in demat fo+m in the deposito+y system/
he investo+ can open an account 0ith any '$ of #'SL/ #'SL system
facilitates opening of demat accounts fo+ diffe+ent catego+ies of investo+s/
'emat accounts opened 0ith #'SL a+e +efe++ed as 1-eneficial O0ne+
!ccounts1 o+ 1-O account1/ !s e5plained ea+lie+6 0hen secu+ities a+e held in
physical fo+m name of the investo+ is +eco+ded in the boo,s of the company
as 1Registe+ed o0ne+1/ When the same secu+ities a+e conve+ted into
elect+onic fo+m and held in a demat account6 the deposito+y becomes
+egiste+ed o0ne+ of the secu+ities/
31
Since deposito+y is acting as a custodian of the secu+ities6 o+iginal
investo+ is legally entitled fo+ all +ights = liabilities attached 0ith secu+ities
and hence a+e called a 1-eneficial O0ne+1/ !ll accounts opened on #'SL
system a+e beneficial accounts i++espective of the type of account/
! demat account may be opened and maintained in the name<s: of one
pe+son <sole holde+: o+ mo+e than one pe+sons <joint holde+s:/ !ll the joint;
holde+s have to sing the application fo+m and the ag+eement/
he suppo+ting documents and photog+aph should also be p+ovided
fo+ all joint;holde+s/ hough the beneficial o0ne+ship of jointly held
secu+ities vests e8ually in all joint;holde+s6 communications about the joint
deposito+y account a+e p+ovided only to the fi+st holde+/ he dividend and
inte+est 0a++ants6 annual +epo+ts and notices fo+ meetings a+e also issued to
the fi+st;named joint holde+ only/ !ll -o accounts a+e ope+ated at '$ levelH
ho0eve+6 data is maintained at #'SL level/
! -O does not have di+ect access to #'SL system and must act
th+ough his = he+ '$/ While opening an account6 the -O can give a standing
inst+uction <#onfi+mation 0aive+ o+ $u+chase 0aive+: to allo0 c+edits
automatically to the account 0ithout sepa+ate inst+uctions/
32
ACCOUNT TYPES
T,% &$% +.o 0&"# +)7%' o* &o1#+' +,&+ &# (% o7%#%5 o# CDSL
')'+%0.
9/ !ccounts to be maintained by '$s/
9/ #lea+ing #o+po+ation = #lea+ing *ouse accounts/
ACCOUNT OPENING;
PROCEDURE:
T,% 0&"# o(6%+"2%' o* &o1#+ o7%#"#/ &$% +o &--o. "#2%'+o$' +o
7%$*o$0 +,% *o--o."#/ &+"2"+"%':
9/ 'emate+iali3e physical secu+ities cu++ently held by investo+s and
+eflect secu+ities;o0ne+ship by elect+onic boo,;ent+ies in #'SL/
4/ -uy and sell demate+iali3ed secu+ities6 0hich a+e admitted in #'SL/
>/ Receive statements of all demate+iali3ed holdings of secu+ities as -O/
B/ Receive secu+ities in elect+onic fo+m in case of Initial $ublic
Offe+ings6 Rights Issues6 -onus Issues6 Me+ge+s6 !c8uisitions and
!malgamations6 etc/
?/ $ledging of secu+ities/
33
he -O and the '$ 0ill ente+ into an ag+eement and each one 0ill
abide by the te+ms and conditions of the ag+eement/ he -O 0ill give the
account opening fo+m along 0ith the +elevant documents to the '$/
he '$ 0ill chec, all the documents and in case of any additional
info+mation is +e8ui+ed shall call fo+ the same/ If the '$ finds all the pape+s
as co++ect6 he 0ill send a confi+mation to the -O/ <E/g/ a tea+ off slip on
account opening fo+m as counte+ slip/:
he '$ 0ill captu+e details f+om the account opening fo+m filled by
the -O in the f+ont;end system p+ovided by #'SL/ he '$ 0ill scan the
signatu+e<s: of the -O<s: as 0ell as the po0e+ of atto+ney signatu+es6 if
applicable/ Once the '$ commits the t+ansaction6 the data is captu+ed and
sto+ed at #'SL/
! uni8ue -O account numbe+ is gene+ated by the system and this can
be seen at the '$ f+ont;end system/ his 0ill be done on;one and the
info+mation gets t+ansmitted to #'SL instantaneously/ he '$ 0ill +eco+d
the -O I' on the o+iginal application fo+m and on the '$;-O ag+eement fo+
c+oss;+efe+ence/
! -O 0ill be classified 0ith a -O status/ hese status a+e system
defined/ -O status indicates 0hethe+ the -O/ is an Individual6 %RI and
#o+po+ate -ody6 -an, etc/ the info+mation to be captu+ed fo+ each -O status
0ill be diffe+ent/
34
he use+ 0ill fi+st select p+ope+ status code to use fo+ the set;up of
-O/ Only those fields6 0hich a+e p+e;defined by #'SL fo+ the status code6
0ill come up on the sc+een fo+ the use+ to ente+/
he -O I' is a combination of the #'SL #ode <9:6 '$ ype<l:6 '$
#ode <B: and -+anch #ode <4:6 Se+ial no<D:6 and the #hec, 'igit <9:/;
Figu+es in b+ac,et indicate numbe+ of cha+acte+s/
he system maintains a consistent +unning se8uence of account
numbe+s at the '$ f+ont;end system/ he '$ sends the -O a final
confi+mation lette+ fo+ having opened the account mentioning the account
numbe+ the+ein/ In case of a joint account6 all co++espondence = 8ue+ies
+elating to -O account 0ill be sent to the fi+st holde+ only / he account
cannot be made active till the -O1s signatu+e<s: have been captu+ed/
he account opening fo+m fo+ Individual Investo+s6 Institutional
Investo+s6 #o+po+ate Investo+s6 and #Ms can be common/ *o0eve+6 a '$
may p+int sepa+ate fo+ms fo+ a each type of -O if found necessa+y o+
convenient/= those sections of the application fo+m6 0hich a+e not +elevant to a
pa+ticula+ type of -O6 should be ma+,ed 1%ot !pplicable1 <%/!/:/
he documents specified at the end of the account opening fo+m a+e to
be submitted along 0ith the account opening fo+m/ he -O1s '$ may also
specify additional documents to be supplied 0ith the account opening fo+m/ !
'$ shall6 befo+e opening any account of any -O ma,e in8ui+ies as may be
necessa+y and e5e+cise due ca+e and caution in asce+taining the bonafides of
the intending -O6 sc+utini3e the documents +elating to the secu+ities in
35
+espect of 0hich account is intended to be opened6 fo+ thei+ authenticity/
he '$ should ensu+e that a -O having diffe+ent sub;status fo+
diffe+ent ISI%s6 opens a sepa+ate -O a=c fo+ diffe+ent -O sub;status e/g/
di+ecto+ of a company 0ill have a diffe+ent sub;status fo+ sha+es held by
him in that company and 0ill have anothe+ -O account/
Fo--o."#/ &$% +,% o00o# 5%+&"-' +o (% 7$o2"5%5 o# &o1#+ o7%#"#/
*o$0 *o$ &-- +)7%' o* &o1#+':
9/ %ame of the holde+<s:
4/ !dd+ess ( phone =fa5 numbe+/
>/ -an, details6 li,e6 name of ban,6 type of account
<cu++ent=savings: account numbe+6 -+anch add+ess6 MI#R %o/
etc/
B/ $!% numbe+6 if applicable/
?/ Specimen signatu+es/
36
DP-BO AGREEMENT
Each -O has to sign a '$;-O ag+eement 0ith the '$ befo+e opening a demat
account/ *o0eve+6 a -O belonging to any one of the catego+ies specified
unde+ the #'SL -yela0s need not ente+ into an ag+eement 0ith the '$/
T,%'% BO &+%/o$"%' &$% &' *o--o.':
9/ ! fo+eign institutional investo+ +egiste+ed 0ith the SE-I6 0ho has ente+ed
into an ag+eement 0ith the '$ eithe+ di+ectly o+ th+ough its po0e+ of
atto+ney holde+ in acco+dance 0ith the p+ovisions of Regulation 9C of
SE-I <Fo+eign Institutional Investo+s: Regulation6 9EE?/ $+ovided that
such ag+eement gives the '$ an autho+ity to act on behalf of the
fo+eign institutional investo+ fo+ availing the se+vices of the deposito+yH
and a copy of such ag+eement has been filed 0ith the SE-I/
4/ !n Inte+national Multilate+al !gency and .lobal #ustodian 0ho has
ente+ed into ag+eement 0ith the '$ pu+suant to Regulation 9D of SE-I
<#ustodians of Secu+ities: Regulations6 9EEC and such ag+eement inte+
alias confe+s autho+ity on the '$ to avail of the deposito+y se+vices on
behalf of an Inte+national Multilate+al !gency and .lobal #ustodian/
37
DOCUMENTS TO BE SUBMITTED WHILE OPENING A DEMATS
ACCOUNT
List of documents = info+mation to be submitted by diffe+ent catego+ies
of -Os along 0ith the account opening fo+m is given belo0/ he '$ should
ve+ify copies of the documents against the o+iginal documents/
INDIVIDUAL INVESTORS
9/ Int+oduce+1s %ame6 !dd+ess6 and #ontact %umbe+/
4/ %ame6 !dd+ess6 el %o/ Etc/ of Magist+ate=%ota+y $ublic=E5ecutive
Magist+ate in case of attestation done by any of them/
>/ $o0e+ of !tto+ney6 if applicable/
B/ $hotocopy of d+iving license=Election I' ca+d=$asspo+t=-an,
attestation=$an #a+d to dete+mine intending -O1s identity/
?/ Ration ca+d = passpo+t = vote+1s I' = d+iving license = ban, passboo, as a
p+oof of add+ess/
C/ -i+th #e+tificate in case of mino+s/
D/ One passpo+t si3e photog+aph of applicants 0ith thei+ signatu+es
ac+oss the face of the photog+aph/
38
HUF
9/ !ll the above documents as ta,en fo+ Individual investo+s at the time
of account opening hold good/ In addition *"F signatu+e unde+ the
stamp of *"F/
4/ List of family membe+s/
CORPORATE INVESTORS:
9/ #e+tified t+ue copy of boa+d +esolution fo+ pe+sons autho+i3ed by the
boa+d to act as autho+i3ed signato+ies/
4/ %ames of the autho+i3ed signato+ies6 designation6 and thei+ specimen
signatu+es/
>/ $O! given to the autho+i3ed signato+ies/
B/ %ame6 !dd+ess6 el %o/ etc/ of Magist+ate=%ota+y $ublic=Special
E5ecutive Magist+ate incase of attestation done by any of them/
?/ Memo+andum and !+ticles of !ssociation of the company/
C/ One passpo+t si3e photog+aph of each autho+i3ed signato+y 0ith thei+
signatu+es ac+oss the face of the photog+aph/
39
CM8 FII8 NRI AND OCB
9/ #opy of #e+tificate of Regist+ation 0ith SE-I <0he+e applicable:/
4/ $o0e+ of !tto+ney <if applicable:/
>/ #e+tified t+ue copy of boa+d +esolution fo+ pe+sons autho+i3ed by
the boa+d to act as autho+i3ed signato+ies/
B/ %ames of the autho+i3ed signato+ies6 designation6 and thei+
specimen signatu+es/
?/ %ame6 !dd+ess6 el %o/ etc/ of Magist+ate=%ota+y $ublic=Special
E5ecutive Magist+ate in case of attestation done by any of them/
C/ R-I Regist+ation fo+ FII6 %RI6 O#- <if applicable:/M
D/ -an, !=c details 0ith +espective status li,e %RE6 %RO6 etc/
F/ Memo+andum and !+ticles of !ssociation of the company/
E/ #onduct #e+tificate f+om the stoc, e5changes 0he+e -O is a #M/
9@/ One passpo+t si3e photog+aph of each of the autho+i3ed signato+y
0ith thei+ signatu+es ac+oss the face of the photog+aph/
40
SETTLEMENTS:
When secu+ities a+e pu+chased o+ sold6 the same need to be ta,en
into buye+1s account o+ t+ansfe++ed oEut of selle+1s account/ Since
settlement of t+ades in all listed secu+ities is to be compulso+ily done in the
demate+iali3ed fo+m6 the t+ansaction has to be +outed th+ough the deposito+y
system/ he secu+ities could eithe+ be sold o+ pu+chased th+ough the stoc,
e5change mechanism o+ outside the stoc, e5change mechanism/
! demat account can be debited = c+edited only on inst+uctions of the
-O/ -O the+efo+e needs to give inst+uctions to his = he+ '$ to effect debit =
c+edit of secu+ities out of his = he+ demat account/ *o0eve+6 most of the
time inst+uctions a+e +e8ui+ed only fo+ debit since a -O can give a one;
time standing inst+uction to the '$6 fo+ c+editing the account 0ithout a
c+edit inst+uction6 at the time of account opening/ his one;time
inst+uction is ,no0n as 2$u+chase 0aive+2/ he '$ e5ecutes all
inst+uctions in the #'SL system6 only afte+ ve+ification of the signatu+e of
the account holde+<s:/
T$&#'*%$ o* '%1$"+"%' "# 3 o1$ o* +,% 5%0&+ &o1#+ &# &$"'% "# +,%
*o--o."#/ "#'+&#%'
a: Fo+ e5ecution of off ma+,et t+ansaction i/e/ t+ansactions bet0een t0o
accounts on mutually ag+eeable te+ms6 i/e/ a t+ansaction done on a
pe+son;to;pe+son basic6 0ithout going th+ough the stoc, e5change
mechanism/
41
b: Fo+ settling on ma+,et t+ades i/e/ t+ades done by the investo+s th+ough
stoc, e5change mechanism and settled using the settlement
mechanism of the same e5change/
c: Fo+ inte+ deposito+y t+ansfe+s i/e/ t+ansfe+ of secu+ities f+om an account held
in one deposito+y to an account held in the othe+ deposito+y/
Fo+ t+ansfe+ of secu+ities6 -O is +e8ui+ed to submit a duly filled in
inst+uction slip6 in the fo+mat specified by #'SL6 to his = he+ '$ fo+
e5ecution/ his inst+uction slip can be used fo+ t+ansfe+ of secu+ities
necessitated due to any of the above +easons/
-oo,lets of inst+uction slips a+e issued to the -O afte+ an account has
been opened/ he inst+uction slips have the -O I' and a se+ial numbe+ p+e;
p+inted on them/ he '$ is +e8ui+ed to ,eep a p+ope+ +eco+d in +espect of the
+ange of se+ial numbe+s of the inst+uction slips issued to each -O/
he -O should submit the inst+uction slip6 duly filled in and signed by
all joint holde+s o+ a duly constituted $O! <if any6 to the '$/ he -O should
clea+ly specify the type of t+ansaction fo+ 0hich the inst+uction slip is
submitted/ !ny alte+nations= modifications to the inst+uction slips al+eady
signed by the holde+<s: should be again authenticated by the holde+<s:/
42
OFF-MARKET TRANSACTIONS:
OffNMa+,et t+ansaction can be used fo+ t+ansfe+ secu+ities f+om
9/ One -O account to othe+ -O !ccount
4/ -O account to #M account fo+ pay;in
>/ #M account to -O account fo+ pay;out
he selle+ -O 0ill submit a duly filled in inst+uction slips6 giving details
of the buye+ -O6 ISI%/ Auantity etc/6 to the '$/ On +eceipt of the
inst+uction slip6 the '$ 0ill ve+ify the same and ente+ the off;ma+,et
inst+uction in the #'SL system/ If the buye+ -O has not given one time
standing inst+uction i/e/ pu+chase 0aive+6 the buye+ -O 0ill be
+e8ui+ed to give +eceipt inst+uction to his '$ fo+ +eceiving secu+ities in
the account/
he inst+uction ente+ed by the '$ 0ill be e5ecuted in the 2e5ecution
date2 as specified by the -O in the inst+uction slip/ !t the time of
e5ecution6 if sufficient balances a+e p+esent in the selle+ -O account6 the
account 0ill be debited and co++esponding c+edit 0ill be given in the buye+
-O account/
If the balance in the selle+ -O account is insufficient6 the inst+uction
0ill +emain in the 2Ove+due2 status/ Fo+ all inst+uctions 0ill 2Ove+due2
status6 #'SL system 0ill chec, fo+ availability of balances at p+e;defined
inte+vals till the end of the e5ecution date <till EO':/ !t the end of day of
43
the e5ecution date6 if balances a+e still insufficient the inst+uction 0ill be
ma+,ed as failed/
ON MARKET TRANSACTIONS:
Investo+s buy = sell secu+ities on the t+ading platfo+m p+ovided by the
stoc, e5changes th+ough SE-I +egiste+ed #Ms/ he day on 0hich the t+ade
is e5ecuted is called as the +ading day o+ the 22 day/ On +eceiving
confi+mation6 f+om the #M6 of e5ecution of the t+ade6 the buye+ -O has to
delive+ the funs <money: to his = he+ #M and the selle+ -O has to delive+ the
secu+ities to his = he+ #M/ he #M delive+s the funds and the secu+ities
+eceived f+om the -O to the #* = ## of the stoc, e5change befo+e the
stipulated time specified by the stoc, e5change/
he #h = ## of the stoc, e5change then delive+s the secu+ities to the
buying #Ms and funds to the selling #Ms6 0ho have e5ecuted t+ades on
behalf of thei+ clients/
he activity of the #* = ## of the stoc, e5change of delive+ing funds
and secu+ities to the +espective selle+s = buye+s is ,no0n as 2Settlement of
ma+,et t+ades2/ he date on 0hich settlement ta,es place is ,no0n as
2Settlement date2/
he p+ocess of delive+y of secu+ities by the selle+ #M to the #* = ##
fo+ settlement is ,no0n as 2$ay;in of secu+ities2 and the p+ocess of delive+y
of secu+ities by the #* = ## to the buye+ #M is ,no0n as 2$ay;out of
secu+ities2/ $ay;in and $ayout of secu+ities ta,es place at p+edete+mined
timings decided by the stoc, e5changes/
44
Settlement of on ma+,et t+ades is cu++ently done on a I4 basis i/e/
settlement ta,es place on 4
nd
0o+,ing day afte+ the t+ade has been e5ecuted
by the #M/
ADVANTAGES OF DEMAT:
+ansacting the deposito+y 0ay has seve+al advantages ove+ the
t+aditional system of sha+e ce+tificates/
9/ he investo+ can avoid the e5pense of applying fo+ duplicate
ce+tificates in case of loss = mutilation of ce+tificates/
4/ +ading in demat segment completely eliminates the +is, of bad
delive+ies6 0hich in tu+n all cost and 0astage of time associated 0ith
follo0 up fo+ +ectification/
>/ he investo+ can also +eceive you+ bonuses and +ights into you+
deposito+y account as a di+ect c+edit6 thus eliminating +is, of loss in
t+ansit/
B/ In case of t+ansfe+ of elect+onic sha+es6 @/?O can be saved in stamp
duty/
?/ #ost of delay=cou+ie+=neut+ali3ation the need fo+ fu+the+ follo0 up
0ith the clea+ing membe+ fo+ sha+es +etu+ned fo+ company1s objection6
0hich happens only in case of physical secu+ities scan6 be avoided/
45
C/ Facilitation of cash co+po+ate actions such as dividends/ #'SL
p+ovides details of beneficial o0ne+s as on a given day <the +eco+d
date: to the issue+ company=+egist+a+ so as to enable the company to
#alculate the benefits a+ising out of these hoE9dings/ he company1s
+egist+a+ and t+ansfe+ agents fo+0a+d the cash benefits to the investo+
di+ectly/
D/ Lending and bo++o0ing of secu+ities) ! client eithe+ a lende+ o+ a
bo++o0e+6 having a beneficia+y account 0ith the '$ can lend o+
bo++o0 secu+ities in elect+onic fo+m th+ough an app+oved
inte+media+y6 0ho has opened a special inte+media+y account 0ith a
'$/
F/ he c+eation of lend=bo++o0 inst+uction 0ill be initiated by
lende+=bo++o0e+ +espectively th+ough his '$/
E/ Investo+ can e5pect a lo0e+ inte+est cha+ge fo+ loans ta,en against
demat sha+es as compa+ed to the inte+est fo+ loan against physical
sha+es/
46
REMATERIALISATION:
DEFINITION:
Remate+ialisation is the p+ocess of conve+ting secu+ities6 held in a
demat account <i/e/ elect+onic fo+m: to physical fo+m/ ! -O <-eneficia+y
O0ne+: intending to conve+t the secu+ities into physical fo+m submits a
'emat +e8uest to the '$ in a Remate+ialisation Re8uest Fo+m <RRF:/
'$ ve+ifies the info+mation on the RRF and ente+s the details in the
system to setup a +e8uest elect+onically/ he system gene+ates a uni8ue
se+ial numbe+ called as Remate+ialisation Re8uest %umbe+ <RR%:6 0hich
can be used fo+ futu+e +efe+ence/ he '$ sends the RRF to the conce+ned
Issue+=R!/
If the 'emat +e8uest is in o+de+6 the Issue+=R! app+oves the same and
confi+ms the RR% elect+onically to #'SL/ On +eceiving such confi+mation6
#'SL debits the -O account/ $hysical ce+tificates a+e sent by the
Issue+=R! di+ectly to the investo+/
47
STEPS:
9/ he investo+ +e8uest fo+ the physical ce+tificate to its 'eposito+y
$a+ticipants th+ough Remat Re8uest Fo+m <RRF:
4/ he 'eposito+y $a+ticipants 0ill info+m the 'eposito+y of the +e8uest/
>/ he 'eposito+y $a+ticipants in tu+n 0ill also app+aise the
Regist+a+ =+ansfe+ agents
B/ he deposito+y 0ill fo+0a+d the same +e8uest to the R ( !gent
?/ he Regist+a+ = +ansfe+ agents afte+ p+inting the physical ce+tificates
0ill update the 'eposito+y/
C/ he deposito+y 0ill update the 'eposito+y $a+ticipants
D/ he physical ce+tificates a+e sent to the investo+s di+ectly by the
Regist+a+s/
48
ACTION BY BO
! -O 0ho 0ishes to have balance in his demat account in #'SL6
+emate+iali3ed6 has to fill up a RRF in duplicate6 sign it and submit the same to
his '$/ RRF should be signed by all holde+s = $O! <if any:/
he -O may specify on the RRF that all the 8uantity to be included in
only one ce+tificate <Gumbo Lot: o+ the ce+tificates may be fo+ ma+,etable
losts/ Sepa+ate RRF is to be submitted fo+ +emat of f+ee 8uantity and 8uantity
unde+ loc,;in6 if loc,;in is fo+ diffe+ent +easons then a sepa+ate RRF is to be
submitted fo+ each loc,;in +eason/
ACTION BY DP
On +eceipt of RRF f+om the -O6 the '$ ve+ifies the details mentioned
in the RRF 0ith the -O details maintained 0ith #'SL/ Sufficient 1f+ee
balance1 o+ 1loc,;in balance1 must e5ist in the account fo+ +emat/
Signatu+e<s: of the -O<s: o+ $O! holde+ should match 0ith those +eco+ded
0ith the '$/
If all the details on the RRF a+e co++ect then the same a+e ente+ed in
the #'SL System by the '$ on the same day o+ latest by the ne5t 0o+,ing
day f+om the date of +eceipt of RRF/ When the +e8uest is set up6 #'SL
system gene+ates a uni8ue Remate+ialisation Re8uest %umbe+ <RR%: fo+
each +emat +e8uest/
49
Once a +emat +e8uest is set up6 the balances in the demat account a+e
bloc,ed and such secu+ities cannot be t+ansfe++ed/ '$ +eco+ds the RR% on
the RRF and autho+i3es the RRF 0ith his seal and signatu+e/ he '$ +etains a
copy of the RRF fo+ his +eco+ds and sends the o+iginal RRF to the Issue+ =
R! 0ith othe+ documents6 if any/
he '$ must ensu+e that the +emat +e8uest is sent to the Issue+=R!
0ithin t0o 0o+,ing days of +e8uest +eceived f+om the -O and is hono+ed
0ith a pe+iod of >@ days f+om the date of physical +eceipt of the RRF by the
Issue+=R! /
ACTION BY ISSUER 3 RTA
On +eceiving the physical documents6 the Issue+ = R! access the
elect+onic +e8uest f+om #'SL system and ve+ify the details as pe+ RRF/ If
the +emat +e8uest is acceptable6 Issue+ = R! confi+m the same elect+onically
th+ough the #'SL system debits the -O account 0ith 8uantity accepted fo+
'emate+iali3ation/
On ve+ification6 if the details do not match6 the Issue+ = R! 0ill
elect+onically intimate the +ejection of RRF and send the +ejected RRF to the
'$6 along 0ith all the documents6 fo+ necessa+y co++ection = +ectification/
Fo+ the +ejected RRF6 the '$ 0ill ca++y out the necessa+y +ectification in
consultation 0ith the -O and set up a f+esh +emat +e8uest/
50
A REMATERIALISATION RE9UEST MAY BE REJECTED FOR
REASONS SUCH AS
9/ he details given in RRF do not match 0ith elect+onic intimation +eceived
4/ he RRF is incomplete
>/ he documents a+e sent to 0+ong R! = Issue+
B/ %ecessa+y documents do not accompany the RRF
Fo+ all accepted +emat +e8uests6 the Issue+ = R! ta,e the follo0ing
pa+ticula+s on +eco+d based on RRF
9/ %ame of *olde+<s:
4/ Fathe+1s %ame=*usband1s %ame of the fi+st holde+
>/ !dd+ess
B/ $!%
?/ a5 Status
C/ !ge
D/ -an, !ccount %umbe+
F/ %ame of the #ompany
E/ Auantity of secu+ities +emate+iali3ed
9@/ Signatu+e of all the *olde+s mentioned in the RRF
99/ Whethe+ the secu+ities a+e unde+ loc,;in6 if yes6 then the pe+iod up to
0hich such secu+ities a+e unde+ loc,;in and +easons fo+ such loc,;in
51
94/ E5isting Folio %O/6 if any
9>/ If $O! holde+ ope+ates the -O1s account6 the t+ue copy of the $O!
also 0ill be ta,en on +eco+d/
9B/ Othe+ documents6 if any he Issue+ = R! gene+ate a folio numbe+ fo+
the -O o+ give the e5isting folio numbe+6 if the -O is al+eady holding
the same type of secu+ities of the same Issue+ in the physical fo+m/
he Issue+ = R! +eco+d the name of the -O as the Registe+ed O0ne+<s: of
the +emate+iali3ed secu+ities/ he Issue+ = R! p+int the ce+tificates in the
name of Registe+ed O0ne+<s: and dispatch the same to the -O/
he Issue+ = R! info+m all the stoc, e5changes6 0he+e the secu+ities
a+e listed6 about the ne0s ce+tificate numbe+s6 distinctive numbe+s of the
+emate+iali3ed secu+ities <as pe+ the +e8ui+ements of the va+ious stoc,
e5changes:/ Such a ce+tificate should also be issued to #'SL on a 8ua+te+ly
basis/
52
INTRODUCTION TO DEPOSITORY
WHAT IS A DEPOSITORY:
he 'eposito+ies !ct defines a deposito+y as 2a company fo+med and
+egiste+ed unde+ the #ompanies !ct6 9E?C and 0hich has been g+anted a
ce+tificate of +egist+ation unde+ sub;section <9!: of section 94 of Secu+ities
and E5change -oa+d of India !ct6 9EE4/2
THE DEPOSITORIES ACT:
he 'eposito+ies !ct6 9EEC6 ushe+ed in an e+a of efficient capital
ma+,et inf+ast+uctu+e6 imp+oved investo+ p+otection6 +educed +is,s and
inc+eased t+anspa+ency of t+ansactions in the secu+ities ma+,et/ It also
immensely benefited the issue+ companies6 in te+ms of +educed costs and the
effo+t e5pended in managing thei+ sha+eholde+ populace/ $e+haps6 no othe+
single act othe+ than the deposito+ies !ct has had such p+ofound all +ound
impact on eve+y single sta,eholde+ in the Indian capital ma+,ets/
his legislation envisaged multiple deposito+ies in India to ensu+e
benefits of competition fo+ then use+s of the deposito+y system/ he
'eposito+ies !ct 0hich facilitated establishment of deposito+ies <li,e
#'SL: in India sought to effectively cu+b such i++egula+ities6 and
p+otect the inte+ests of the investo+s6 and paved a 0ay fo+ an o+de+ly
conduct of the financial ma+,ets th+ough f+ee t+ansfe+ability of secu+ities
0ith speed6 accu+acy6 t+anspa+ency etc/
53
ue to the int+oduction of the deposito+y system6 the investo+s a+e able
to enjoy many benefits li,e f+ee and instant t+ansfe+ability in a secu+ed manne+
at lo0e+ costs6 f+ee f+om the p+oblems li,e bad delive+ies6 odd;lots etc/
oday the t+adable lot is +educed to 2one unit2 hence even a common
man is able to invest money in one e8uity sha+e o+ bond o+ debentu+e/ he
investo+ is able to save a lot on account of stamp fee as gove+nment has
e5empted stamp duty on t+ansfe+ of secu+ities at p+esent/ Investo+s a+e also
spa+ed f+om the p+oblems of p+ese+ving the secu+ities held in physical fo+m
VARIOUS SERVICES OFFERED BY A DEPOSITORY:
! deposito+y in India cannot open a demat account of an investo+ and =
o+ p+ovide se+vices to such a pe+son di+ectly/ Fo+ opening a demat account o+
availing the se+vices offe+ed by the deposito+y6 a pe+son is +e8ui+ed to
app+oach a 'eposito+y $a+ticipant <'$: 0ho is an agent of the deposito+y6
complete the account opening fo+malities as pe+ the SE-I +egulations6
'eposito+y byela0s/
he+eafte+6 the investo+ can +eceive secu+ities in the demat account as
0ell as tende+ the secu+ities held by him = he+ in physical fo+m fo+
demate+iali3ation to the '$ <as e5plained in the subse8uent pa+t: and hold the
same in boo,;ent+y fo+m in the account/
When an investo+ holds secu+ities in physical fo+m6 his = he+ name
is +eco+ded as +egiste+ed o0ne+ in the boo,s of the company/ !s pe+ the la0s
cu++ently in fo+ce in India6 0hen the secu+ities a+e conve+ted in elect+onic
fo+m by 0ay of demate+iali3ation6 name of the deposito+y is +egiste+ed in the
boo,s of the company as +egiste+ed o0ne+/
54
*o0eve+6 the investo+ continues to be the +eal o0ne+ of the secu+ities
and is entitled to +eceive all the benefits such as dividend6 inte+est6 bonus
sha+es etc/ in +espect of the said secu+ity and as such is called as -eneficial
O0ne+ <-O: unde+ the deposito+y system/
oday 2demat2 has become a common 0o+d/ he institutional and
individual investo+s sp+ead all ove+ India a+e found to be ma,ing an
e5tensive use of the deposito+y pa+ticipant se+vices fo+ holding thei+
secu+ities in elect+onic fo+m/
FUNCTIONS OF DP:
COMMON FUNCTIONS FOR DP AND RTA:
;.TRANSFER FILES3 UPDATE DATABASE:
#'SL system pa+amete+s a+e defined and set up f+om a cent+al point
and a+e sto+ed in the *ost system/ hese pa+amete+s a+e the base on 0hich
use+ specific pa+amete+s a+e set up6 as such these a+e +e8ui+ed unive+sally to
all '$=R! systems/ his module facilitates the t+ansfe+ of such pa+amete+s to
all '$=R! systems/ his is to be done only once in a day just afte+ the use+
logs in/
55
<. DATABASE ADMINISTRATION:
he 'atabase !dminist+ation module can be used set;up autho+i3ed
use+s/ It also allo0s use+ to set up Wo+,station<s:6 #ou+ie+ info+mation and
$+inte+/
=. MASTER FILES:
Maste+ files module is used to in8ui+e the maste+ files/ ! use+ can only
in8ui+e the maste+ data fo+ the follo0ing basic maste+ tables such as list of
ISI%6 '$s6 Issue+s6 R!s6 *olidays6 E5changes6 Settlement calenda+ etc/
Info+mation in these files is updated by #'SL/
>. REPORT SCHEDULER:
his module helps use+ to gene+ate va+ious +epo+ts fo+ Maste+ files
such as list of ISI%s '$s6 Issue+s6 R!s6 *olidays6 E5changes6 Settlement
calenda+ etc/
?. NON-FINANCIAL HISTORY:
his in8ui+y module gives the complete audit t+ail of changes made
and the t+ansactions causing the changes/ Only those t+ansactions a+e
+eflected 0hich do not affect the holdings of a pa+ticula+ -O;ISI% account/
56
@. RECOVER TRANSACTION INFORMATION:
his module is used to +ecove+ -OI's and use+ details in case of
+einstallation of the #'LS system/
C Indicates communication gate0ay status/
R Indicates 0o+,station +egist+ation status/
S Indicates use+1s sign;on status/
A. OPERATOR CONC9LE:
T,"' 0o51-% 7$o2"5%' *o--o."#/ *1#+"o#':
9/ 0o 0ay communications bet0een the f+ont end and the bac,
end/
4/ 'o0nloading of +epo+ts at the f+ont end/
B. HOST REPORT MANAGER:
his option allo0s the use+ to manage+ the t+ansaction +epo+ts/ It
p+ovides facilities fo+ vie0ing6 p+inting6 copying of the +epo+ts/ "se+ can
do0nload daily ISI% +ate files fo+ billing activity in bac, office/ "se+ can
also do0nload va+ious communi8ues sent by #'SL to '$ = R!/ his
module is also used fo+ pulling +epo+ts/
C. REPORT PARAMETERS:
he module is used to set up diffe+ent +e8uest +epo+ts by using
pa+amete+s such as so+t c+ite+ia6 filte+ c+ite+ia etc/ his module also
57
p+ovides facility to gene+ate On;line +epo+ts fo+ actives such as holding
statement fo+ his -O1s6 Inte+ deposito+y t+ansactions and t+ansaction
jou+nal/
;D. END OF DAY EEODF SCHEDULER
EO' can be decla+ed using this module/ he othe+ options a+e 'S
$u+ge and 'atabase -ac,up/
;;. SIGNATURE DOWNLOAD:
his module allo0s the use+ to do0nload signatu+es of -Os and thei+
$O!s fo+ bac, office activity/
58
CHAPTER-V
CONCLUSION
59
he study +evealed to us that 2'emate+iali3ation of Sha+es2 has b+ought about +evolutiona+y
changes li,e)
Immediate t+ansfe+ of sha+es6 the+eby minimi3ing time
%o Stamp duties on t+ansfe+ sha+es
Elimination of +is, 0ith physical ce+tificates such as bad delive+y6
Fa,e ce+tificates etc/6
hough the+e a+e ce+tain sho+tcomings li,e)
Ove+load of 0o+, due to heavy t+ansactions
Lac, of necessa+y inf+ast+uctu+e and pe+sonnel at the deposito+y
pa+ticipant/
It can be ta,en fo+ su+e that these sho+tcomings 0ill be ove+come in the ne5t fe0
yea+s and this p+ocess 0ill cont+ibute to0a+ds the ma,ing of mo+e efficient and investo+ f+iendly
ma+,et/
60
BIBLIOGRAPHY
.athe+ed info+mation f+om M+/ *!RG $!R*!S!R!*I of
"S*!7IR!% FI%!%#E Ltd
Refe++ed +elated a+ticles6 +efe+ences6 jou+nals and ce+tain 0ebsites/
Mate+ial p+ovided by $/#/S Secu+ities Ltd/
W%( S"+%':
000/?paisa/com
000/googlesea+ch/com
000/nationalstoc,e5change/com
000/moneycont+ol/com
000/sdls/com
61
APPENDICES
Ao1#+ C-o'1$%: ! -O 0anting to close a demat account held 0ith any
'$ shall ma,e an application in the specified fo+mat/ he -O may close its
account if no balances a+e standing to its c+edit in the account/ In case any
balance e5ist6 then the account may be closed by +emate+ialisation of all its
e5isting balances in its account and = o+6 by t+ansfe++ing its secu+ity balances to
its othe+ account held eithe+ 0ith the same '$ o+ 0ith a diffe+ent '$/ he '$
ensu+es that no t+ansactions should be pending fo+ the account
A**"5&2"+ ) is any 0+itten document in 0hich then signe+ s0ea+s unde+ oath
befo+e a nota+y public o+ someone autho+i3ed to ta,e oath that the statements
in the document a+e t+ue
B%#%*""&$) Ao1#+: !n investo+ o+ a b+o,e+ 0ho 0ants to hold sha+es in
demat fo+m and unde+ta,e sc+ipless t+ading must have a deposito+y account
called beneficia+y account 0ith '$ of his choice/
BO: he Stoc, e5change6 Mumbai also ,no0n as -SE is one of the oldest
stoc, e5changes in !sia 0ith ove+ C6@@@ stoc,s listed/
Co$7o$&+% A+"o#: includes any action +elating to payment of inte+est6
dividend6 +edemption6 0a++ants6 bonus6 me+ge+6 split6 amalgamation and any
such othe+ action time to time/
62
Co$7o$&+% B%#%*"+': means benefits li,e dividends6 inte+est6 bonus sha+es6
+ights6 p+efe+ential allotments6 0a++ants6 discount coupons6 +edemption at
p+emium and such othe+ benefits6 acc+uing f+om time to time f+om the issue+
to the -O in +espect of the secu+ities held by such -O/
DRF: In o+de+ to demate+iali3e his physical sha+es the investo+ <+egiste+ed
o0ne+: submits a +e8uest to the '$ in the 'emate+iali3ation Re8uest Fo+m
<'RF: along 0ith the ce+tificates of secu+ities to be demate+iali3ed/
DRN: Is a uni8ue numbe+ gene+ated by #'SL system 0hen a demat +e8uest
is set up/
D%7o'"+o$): ! 'eposito+y is an o+gani3ation 0he+e the secu+ities of an
investo+ a+e held in elect+onic fo+m6 at the +e8uest of the investo+ th+ough the
medium of a '$/ It is a company fo+med and +egiste+ed unde+ he
#ompanies !ct6 9E?C and 0hich has been g+anted a ce+tificate of
+egist+ation unde+ the +elevant sections of the SE-I !ct6 9EE4
D%7o'"+o$) P&$+""7&#+: Is an agent of the deposito+y and is autho+i3ed to
offe+ deposito+y se+vices to the investo+s/ !cco+ding to SE-I guidelines6
financial institutions6 ban,s6 custodians6 stoc,b+o,e+1s etc/ can become '$
of a deposito+y
E-%+$o#" P1(-" O**%$"#/ EEPOF: !n initial public offe+ing6 o+ ne0 issue of
sha+es6 in 0hich the p+ocess of applying fo+ sha+es is handled
elect+onically <via Website:/
63
I#"+"&- P1(-" O**%$"#/ EIPOF: he fi+st offe+ing of a company1s sha+es to
the public/ he sha+es offe+ed may be e5isting ones held p+ivately6 o+ the
company may issue ne0 sha+es to the public/
I#+%$ D%7o'"+o$) T$&#'*%$': Inte+ deposito+y t+ansfe+ means t+ansfe+ of
secu+ities6 0hich a+e admitted6 fo+ demat on both the deposito+ies f+om an
account held in one deposito+y to an account held in the othe+ deposito+y/
ISIN: Means Inte+national Secu+ities Identification %umbe+ <ISI%: is a code
that uni8uely identifies a specific secu+ity6 0hich is allocated at the time of
admitting the same in the deposito+y system/
I''1%: means the numbe+ of sha+es of a company on sale to the public at a
given time/
I''1% P$"%: means the p+ice at 0hich a company1s sha+es a+e offe+ed to the
ma+,et fo+ the fi+st time/ When they begin to be t+aded6 the ma+,et p+ice may
be above o+ belo0 the issue p+ice
IRF: Invocation Re8uest Fo+m
PAN: means $e+manent !ccount %umbe+ issued by Income a5 'epa+tment
RRF: Remate+ialisation Re8uest Fo+m/
64
R%/"'+$&$ &#5 T$&#'*%$ A/%#+ ERTAF ) Means a +egist+a+ to an issue of any
secu+ities and=o+ a t+ansfe+ agent in +espect of any secu+ities appointed by the
Issue+ on its behalf 0ho has been g+anted the ce+tificate of +egist+ation by the
Secu+ities and E5change -oa+d of India unde+ Sub;section<l: of Section 94
of the Secu+ities and E5change -oa+d of India !ct6 9EE4
T$&#'*%$&("-"+) o* S,&$%': Sha+es in a company a+e f+eely t+ansfe+able6
subject to ce+tain conditions6 such that no sha+eholde+ is pe+manently o+
necessa+ily 0edded to a company/ When a membe+ t+ansfe+s his sha+es to
anothe+ pe+son/ he t+ansfe+ee steps into the shoes of the t+ansfe+o+ and
ac8ui+es all +ights of the t+ansfe+o+ in +espect of those sha+es/ Fo+
demate+iali3ed sha+es the '$ debits and c+edits the account of the -O 0ith
an autho+i3ation f+om such -O
Z%$o (&-&#%: !lso ,no0n as nil balance6 a situation 0hen a deposito+y
account has no secu+ities in it/ ! -O account may be opened 0ith any '$
even 0ith 3e+o balance
65