Professional Documents
Culture Documents
Bharti
Bharti
DEMAT ACCOUNT
ON
AT
UNICON SECURITIES PVT. LTD
1
DECLARATION
I Bharti Pamnani, student of BBA 3rd year, studying at Aryabhatta International College
Of Technical Education, Ajmer, hereby declare that the summer training report on
“DEMAT ACCOUNT” is submitted to UNOCON SECURITIES PVT.LTD, AJMER, for
completing summer training for fulfillment of Degree of Bachelor’s Of Business
Administration is the original work conducted by me.
The information and data given in the report is authentic to the best of my knowledge.
This summer training report is not being submitted to any other Institute for award of any
other Degree, Diploma and Fellowship.
(Bharti Pamnani)
2
ACKNOWLEDGEMENT
I express my sincere gratitude to Mr. Sandeep Gaur, worthy lecturer for providing me an
opportunity to undergo summer training at Unicon Investment Solutions
I am thankful to Mr. Lalit & Lokesh Sharma head of Unicon Investment Solution, Ajmer.
for his support, cooperation, and motivation provided to me during the training for constant
inspiration, presence and blessings
.
I also extend my sincere appreciation to Miss. Priya Jainani, (lecturer) who provided her
valuable suggestions and precious time in accomplishing my project report.
Lastly, I would like to thank the almighty and my parents for their moral support and my
friends with whom I shared my day-to-day experience and received lots of suggestion that
improved my quality of work.
(Bharti Pamnani)
3
TABLE OF CONTENTS
5. 5. RESEARCH METHODOLOGY
9. 9. BIBLIOGRAPHY
10 10. APPENDIX
. ANNEEXURE – 1 QUESTIONNAIRE
COMPANY’S PROFILE
4
INTRODUCTION TO UNICON INVESTMENT SOLUTIONS
MANAGEMENT TEAM
INTRODUCTION TO UNICON
5
Unicon has been founded with the aim of providing world class investing experience to
hitherto underserved investor community. The technology today has made it possible to
reach out to the last person in the financial market and give him the same level of service
which was available to only the selected few.
Unicon gives personalized premium service with reasonable commission on the NSE, BSE
& DERVATIVES market through their equity broking arm Unicon Securities private ltd.
and commodities on NCDEX and MCX through their Unicon Commodities Pvt Ltd. With
their sophisticated technology we can trade through our own computer and if we want
human touch we can also deal through our relationships managers out of more than 100
branches
.
Unicon also give personalized services on insurance (Life and General) & Investments
(Mutual funds & IPO’S ) needs through their Insurance & Investment distribution arm
Unicon Insurance Advisors Pvt. Ltd. Their tailor-made customized solutions are perfect
match to different financial objectives. Their distribution network is backed by in house
back office support to serve their customers promptly
6
MISSION AND VISION OF UNICON INVESTMENT SOLUTIONS
MISSION:
To create long term value by empowering individual investors through superior financial
services supported by culture based on highest level of team work, efficiency and integrity.
VISION:
To provide the most useful and ethical investment solutions guided by values driven
approach to growth, client service and development
7
MANAGEMENT TEAM OF UNICON INVESTMENT
SOLUTIONS
8
Chief Financial Officer: Mr. Vikas Mallan
Mr. Mallan A Chartered Accountant, Company Secretary and Cost Accountant by
profession. Mr. Mallan has over 14 years of experience in the area of finance. Before
joining Unicon he has served at senior level positions with Rediff.com, Reliance Telecom
and Koshika Telecom. His experience includes a NASDAQ listing of an Indian internet
company and Head of Finance of a leading Law firm. Mr. Mallan is heading Distribution/
Mutual Fund initiative and is supported by around 1100 dedicated employees nationwide.
9
Head-Privileged Client Group: Mr. Ashish Kukreja
Mr. Ashish has the responsibility of handling PCG business with Unicon. He brings with
him a wide industry exposure and joined Unicon in July 2006 after rendering his services to
Kotak Securities, where he was taking care of franchisee business and later started handling
HNI desk. He is an MBA (finance) from ICFAI Business School.
10
PRODUCT & SERVICES OFFERED BY UNICON
• Equity
• Commodity
• Depository
• Properties
• Distribution
• NRI Services
• Back Office
11
EQUITY
Unicon offers a unique feature of a single Screen Trading Platform of NSE, BSE &
Derivatives.Unicon offers both Offline & Online trading platforms. You can Walk in or
place your orders through telephone at any of our branch locations
• Unicon plus
• Unicon Swift
Unicon Plus
Browser based trading terminal that can be accessed by a unique ID and password. This
facility is available to all our online customers the moment they get registered with us.
Unicon Swift
Application based terminal for active traders. It provides better speed, greater analytical
features & priority access to Relationship Managers.
12
COMMODITY
Unicon offers a unique feature of a single screen trading platform in MCX and NCDEX.
Unicon offers both Offline & Online trading platforms. You can Walk in or place your
orders through telephone at any of our branch location Online commodity internet trading
platform through uniflex.
• Live Market Watch for commodity market (NCDEX, MCX) in one screen
• Add any number of scrips in the Market Watch
• Tick by tick live updation of Intraday chart
• Greater exposure for trading on the margin available
• Common window for market watch and order execution
• Key board driven short cuts for punching orders quickly on
• Real time updation of exposure and portfolio
• Facility to customize any number of portfolios & watch lists.
• Market depth, i.e. Best 5 bids and offers, updated live for all scripts
• Facility to cancel all pending orders with a single click
• Instant trade confirmations
• Stop-loss feature.
13
DEPOSITORY
* De-materialization:
You can submit your physical shares at the Unicon branch for dematerialization into
electronic form.
* Re-materialization:
You can also request for Re-materialization which enables you to convert the
dematerialized shares into physical form.
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* Transfer:
Inter and intra depository services are available through which you can transfer shares.
IPO:
You can apply for IPO using your demat account details and on allotment the securities are
transferred directly to your demat account.
* Corporate Actions:
While holding your stock in demat account, in case you are eligible for
any bonus and rights issues the allotment would be transferred to your
demat account.
* Easy:
You can view your demat account over the Internet and avail a host of services. This facility
empowers our clients to view, download.
15
Priveleged client group
We provide customer focused transparent investment planning and Solutions. We offer
products which benefit your special status.PCG has a specialized advisory team which
nurtures all your investment. We ensure that your investments work for you rather than you
for them.
• Nifty Tracker
• Stastical Arbitrage
16
Properties
Unicon is a specialized property broking company. Our highly experienced and professional
teams present retail, office, industrial and residential property opportunities to a broad base
of clients. Whether it is a residential or commercial development, Unicon offers a total
solution to our clients inclusive of market research, marketing strategy, interaction with the
professional teams and sales or leasing of the property.
Unicon’s professional team of consultants will assist you to identify suitable premises that
satisfy your requirements. We will help you negotiate favorable leases and assist with the
preparation of all documentation.
Distribution
Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution space.
Unicon has over 100 branches and a huge number of “Business Development Executives”
who help to source and service the customers throughout the country. Unicon is fast
becoming the preferred “Vendor Independent” distribution houses because of providing
efficient service like free pick-up of collection of cheques/DD’s, Keeping track of the
premiums etc to its customers.
Unicon offers the following distribution products:-
IPO's
Mutual Funds
Insurance
17
IPO
At Unicon you can invest in the Primary markets (Initial Public Offerings) online without
going through the hassles of filling up any IPO application forms or any other paperwork.
We shall make sure that you do not miss the opportunity to subscribe/invest in a good IPO
issue by providing you an online IPO application form, transfer of funds online through
secured payment Gateways of leading banks like ICICI, HDFC, AXIS bank.
In addition to the above we shall provide you with the In-Depth analysis of the IPO issues
which shall be hitting the Indian Markets in near future, IPO Calendar, analysis on the
recent IPO listings, prospectus, offer documents and other IPO research reports so as to help
you take an informed decision to invest in the IPO issues.
Online IPO facility is open to all our registered clients at no cost whatsoever. All you need
is the following to subscribe online to the IPO issues
18
Mutual Funds
Unicon Provides expert advice to its clients for their investments in equity & debt markets
through Mutual Funds. Our experts advice you the best investment solutions that suit you
and help you to reach your financial goals.
We help you ascertain your risk profile & guide you with the right product mix which
reduce your tax liability increase your savings & enhance your wealth. Weather you have a
conservative, medium or aggressive investment risk appetite, our experts would guide you
to build a portfolio to optimize the return of interest.
• By structure
1. Open-ended Scheme
2. Close-ended Scheme
3. Interval Schemes
• By Investment objective
1. Growth Schemes
2. Income Schemes
3. Balanced Schemes
4. Money market Schemes
• By Other Schemes
19
Insurance
General Insurance
Unicon offers all products of General Insurance under one umbrella.Unicon comprises of a
team of distinguished professionals from insurance, finance and other management
disciplines who have vast business & managerial experience.
Unicon team evaluates the client's business environment and studies the risk profile based
on the results of these evaluations, Unicon team then suggests the most cost effective,
integrated insurance package that is perfectly suited to the client's risk profile. Unicon has a
nationwide network of branches all over India, equipped with top quality infrastructure
facilities, to provide you prompt & efficient service.
Life Insurance
Unicon offers you a Peace of Mind by offering various life insurance plans for your unique
& specific needs. Our philosophy is that for every financial problem, there is a solution also.
And we are here to give you complete financial solutions. At the same time we offer you
very prompt & Reliable Policy related service for enduring relationship. We offer a very
wide range of products to fulfill your particular requirements. You can always have an
access to our 83 Branch Offices situated at prime locations of the city, or you can call our
Relationship Manager to guide on your Investments.
Following is the glimpse of Life Insurance Plans
• Protection Plans
• Investment Plans
• Child Plans
• Retirement/Pension Plans
• Saving Plans
• NRI Plans
• Health Plans
20
NRI SERVICES
With India becoming the epicenter of growth the Global Indian feels the need to be
connected to the domestic growth story.
Unicon now offers a convenient and hassle-free way of Investing in the Indian Securities
Market to the people who are living outside India and wish to participate in the Indian
Growth story.
Procedure for NRI operations in Indian Capital Markets
• The NRI can deal with only one bank at any point of time
• The NRI He is allowed to invest only 5% of the paid up capital of a company. The
aggregate paid up value of equity of any company purchased by all NRI's and
OCBs cannot exceed 10 percent of the paid up capital of the company and in the
case of convertible debentures, the aggregate paid up value of each series of
debentures purchased by all NRI's and OCBs cannot exceed 10 % of the paid up
value of each series of convertible debentures.
• He can enter only into delivery based trades; all deliveries must only be routed
through beneficiary accounts and not directly through the broker.
• Shares bought by him cannot be sold unless the payout of the same is received
from exchange.
• All purchase and sale transactions have to be reported to the RBI by the designated
bank
• Original brokers’ contract notes have to be submitted to the designated Bank
branch, within 24 hours of the transaction.
• He will be required to make bill to bill payments/ settlements. No adjustments of
purchase against sale consideration should be done
• Shares cannot be bought against the shares sold in the same settlement
• All Purchase and Sales will be dealt separately for payments/ receipts
• Sale proceeds of any transaction not reported/approved by the RBI are allowed to
be credited to the NRE/NRO savings/demat account.
• The transaction will have to be reversed in the account and losses if any will be
borne by the client.
21
• All tax liabilities arising out of buying and selling of securities will be handled by
the designated bank
Back Office
Unicon through its online back-office aims to increase the transparency and provides you
the link to view the details of your account online anytime and anywhere.
Here you have the advantage of viewing the following reports online:
• Sauda Details
• Financial Ledger
• E-Contract Note
22
OBJECTIVE OF THE STUDY
The main objective of the study is to know about the potential of the
market regarding people’s dealing in share market.
The objective is to know that how many people in the city are aware of
the UNICON SECURITIES PVT. LTD.
To know where people have already opened their demat a/c and on
what basis.
23
INTRODUCTION OF DEMAT ACCOUNT
The trading on stock exchanges in India used to take place through open outcry without use
of information technology for immediate matching or recording of trades. This was time
consuming and inefficient. This imposed limits on trading volumes and efficiency. In order
to provide efficiency, liquidity and transparency, NSE introduced a nation-wide online fully
automated screen based trading system where a member can punch into the computer
quantities of securities and the prices at which he likes to transact and the transaction is
executed as soon as it finds a matching sale or buy order from a counter party. Screen based
electronic system electronically matches orders on a strict price/time priority and hence cuts
down on time, cost and risk of error, as well as on fraud resulting in improved operational
efficiency. It allows faster incorporation of price sensitive information into prevailing
prices, thus increasing the informational efficiency of markets. It enables market
Participants, irrespective of their geographical locations, to trade with one another
simultaneous, improving the depth and liquidity of the market. It provides full anonymity
by accepting orders, big or small, from members without revealing their identity, thus
providing equal access to everybody.
It also provides a perfect audit trial, which helps to resolve disputes by logging in the trade
execution process entirety. The sucked liquidity from other exchanges and in the very first
year of its operation, NSE became the leading stock exchange in the country, impacting the
fortunes of other exchanges and forcing them to adopt SBTS also. Today India can boast
that almost 100% trading take place through electronic order matching.
Now dematerialization of shares is introduced “a new concept” which converts paper based
physical trading into electronic trading. It is a safe and convenient way to hold securities.
Screen based trading system helps in faster transfer of securities and no stamp duty is
required on transfer of securities.
The trading system operates on a strict price time priority. All orders received on the system
are sorted with the best priced order getting the first priority for matching i.e. the best buy
order match with the best sell order. Orders are matched automatically by the computer
keeping the system transparent, objective and fair.
24
The trading system provides tremendous flexibility to the users in terms of kinds of orders
that can be placed on the system. The trading system also provides market information
online.
In order to promote dematerialization of securities, NSE joined hands with leading financial
institutions to establish the national securities depository Ltd. (NSDL), the first depository
in the country, with the objective of enhancing the efficiency in settlement systems as also
to reduce the menace of fake/forged and stolen securities. This has ushered in an era of
dematerialized trading and settlement.
25
WHAT IS DEMAT
In India, a demat account, the abbreviation for dematerialized account, is a type of banking
account which dematerializes paper-based physical stock shares. Conversion of Securities
from Physical (Paper) Mode into Electronic Mode is Called Dematerialization. The Client
opens Demat Account with any DP. Upon Demat, the Certificates are destroyed and Credit
entry of exactly equal number of Securities is created in Depository in Electronic mode.
The B.O. account of holder is credited and the securities loose their identities.
The dematerialized account is used to avoid holding physical shares: the shares are bought
and sold through a stock broker.
This account is popular in India. The market regulator, securities and exchange board of
India (SEBI) mandates a demat account for share trading above 500 shares. As of April
2006, it became mandatory that any person holding a demat account should possess a
permanent account number (PAN), and the deadline for submission of PAN details to the
depository lapsed on January 2007.
26
ACCOUNT OPENING
27
• After completion of all documentation, the DP officials will verify the pan from
income tax website. And affix the stamp “PAN VERIFIED” with date and sign on
the stamp.
• The DP officials will enter the client details as mentioned in the account opening
form in the DPM (software provided by NSDL & CDSL to the Participant) screen
provided for the purpose. In case of NSDL A/c opening the SR. Assist will capture
all the details in the DPM and record the client’s signature (on the form) as
specimen for authorizations in the future.
• After entering client details in the system, a client account number will be generated
by the DPM. The DP officials will enter this in the account opening form. After that
the officers will verify the details in the DPM captured by the SR. Assist. and
activate the account.
• The DP officials are not allowed to give the demat a/c no to the clients until the a/c
is activate, this is applicable for both NSDL & CDSL.
• When the demat a/c is activated the DP officials have to send the client master and
the copy of agreement between DP and client at the client’s address
The account holder is called 'beneficial owner' in a depository system and the account is
known as 'beneficiary account'.
28
Features of Beneficiary Account·
• No minimum balance is required to be retained in a beneficiary account.
• An investor can close a beneficiary account with one DP and open an account with
another DP.
• To dematerialize existing physical holdings, the beneficiary account must be
opened in the same ownership pattern in which the securities are held in the physical
form e.g., if one certificate is in individual name and another certificate is jointly
held by X & Y, two different accounts should be opened. However, in case of joint
holders, securities can be dematerialized in the same account even though share
certificates are in different sequence of names e.g., shares held in joint names of X
& Y can also be dematerialized in an account opened in the names of Y & X as well
by submitting an additional form (Transposition Form) along with Demat Request
Form to the DP.However, shares held jointly by X & Y cannot be dematerialized in
an account opened in the name of only X or only Y or any.
29
DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT
30
Identity card with applicants photograph issued by
1. Central or state government and its department
2. Statutory/regulatory authorities
3. Public sector undertakings
4. Scheduled commercial banks
5. Public financial institutions
6. College affiliated to universities.
• Passport-size photograph
• Copy of PAN card along with original PAN card for verification
Bank details:
• Copy of cancelled cheque with printed name from the bank.
• Copy of bank passbook with name and address and copy of cancelled cheque.
• Bank statement with name and address (duly authorized by the bank, if statement is
on plain paper) not more than 4 months old and copy of cancelled cheque of MICR
& bank detail verification.
In case of minor
• Date of birth certificate duly notarized
• Proof of address and identity documents of the guardian both minor and guardian’s
photograph and guardian to sign across both photographs
• PAN card of minor as well guardian is mandatory
In case of NRI
• Foreign address and RBI approval date attested copy of RBI approval
• NRO-Indian address along with proofs
• Bank account details
31
In case of joint holdings
In case of joint holdings, POI and POA documents along with PAN card must be submitted
in respect of all account holders. Original documents must be taken to the DP for
Verification.
The DP will also provide a copy of the DP-Client agreement. Account opening form
requires the applicants to give the following details:
• (a) Name(s) of account holder(s) -The investor should ensure that the name is
identical to that which appears on the certificate(s) to be dematerialized. In case of joint
holdings, account may be opened in any one combination, irrespective of the sequence
in which names are appearing on share certificates. Investors are advised to open their
account in their fully expanded name, i.e., to spell to the first name as well as the middle
name. This would obviate any doubts about the veracity of the information.
• (b) Mailing and communication address (es) - The veracity of the applicant's
address is determined through the documents submitted for verification like ration
card, passport, voter ID, PAN card, driving license, bank passbook, etc. For NRI
accounts, proof is required for both addresses - that of the account holder as well as
the constituted attorney. For corporate accounts, a copy of Memorandum of
Association, Articles of Association, Board resolution permitting opening of
account, the registered address of the company have to be furnished.
• (c) Details of guardian in case account holder is a minor -Only a guardian can
open a depository account for a minor. The guardian is required to sign the
application form, and details of his name and address need to be given in addition to
the details of the minor. ·
• (d) Foreign Address and RBI approval details for NRI, FII or OCB accounts
-For foreign-based applicants like NRIs, Flls, OCBs, etc., the applicant must furnish
original or attested copies of the power of attorney and the approval letter from RBI
permitting them to invest, as the case may be. If the account holder is an FII or an
OCB, SEBI registration details along with attested copy of registration certificate
issued by SEBI and authorization letter is required.
32
• (e) Details of bank account -Details of bank account of the account holder,
including the nine digit code number of the bank and branch appearing on the MICR
cheques issued by the bank have to be filled in the application form. Companies use
this information for printing them on dividend/interest warrants etc.
• (f) Nomination declaration - A beneficial owner can make a nomination of his
account in favour of any person by filing the nomination form with his DP. Such
nomination is considered to be conclusive evidence of the account holder'(s) disposition
in respect of all the securities in the account for which the nomination is made.
• (g) Standing Instruction – A facility of standing instruction is provided to the
investors for receiving securities to the credit of their accounts without giving a
separate receipt instruction.
The demat account cannot be operated on "either or survivor" basis like the bank account.
In case of the joint account for the beneficial owners, all the joint holders have to sign the
account opening form.
The investor will submit to his DP the duly filled in account opening form & DP-client
agreement along with the documents.
The DP will verify whether the account opening form has been duly filled in or not. He will
also verify the submitted documents. For corporate investors, the DP will also verify
whether the board resolution for the authorized signatories has been enclosed. The DP will
ensure that client's signature is recorded on the form which will serve as specimen
for authorizations in future.
If the application form and documents are in order, then the DP will accept them and give
an acknowledgement slip duly signed and stamped to the client. The DP will execute the
agreement and give a copy of it to the client.
After completion of all documentation, the DP will enter the client details as mentioned in
the account opening form in the DPM (software provided by NSDL to the DP) screen
provided for the purpose. After entering client details in the system, a client account number
will be generated by the DPM. The DP will enter this in the account opening form.
33
On successful opening of the account, the DP will give:
• Client Id - an eight digit number to be used along with DP Id for any future
transactions.
• A copy of the report listing the client details captured in the DPM database to the
client. The report will be generated by the DPM.
3. The company/issuer should have established connectivity with NSDL/CDSL. Only after
such connectivity is established that the securities of that company/issuer are recognized to
be "available for dematerialization".
4. The holder of securities should have a beneficiary account in the same name as it appears
on the security certificates to be dematerialized.
34
REASONS FOR DEMATERIALISATION REQUEST REJECTION
1. The quantity of shares mentioned in the DRF is more than the actual Certificates sent.
2. The quantity of shares mentioned in the DRF is less than the actual certificates sent.
3. The certificates sent are fake.
4. The certificates sent are reported Stolen.
5. Original certificates present are those for which the duplicates have already been issued.
6. Endorsements on the certificates are forged.
7. Securities stand on a different name than those mentioned in the DRF.
8. The details mentioned on the certificates do not match with the details on the DRF, or the
order of the holders name on the DRF is different from the names given on the certificates.
The scrutiny by the DP is incomplete.
9. The securities attached / DRF does not pertain to the R&T Agent to whom the DRF is
sent.
10. Electronic request received but physical certificates are not received with in 15 days.
11. Specimen Signature on the DRF differs from the signatures recorded with the Registrar/
Transfer Agents.
12. The certificates sent have a court injunction against them.
Precautions:
· Corporate investors to enclose Memorandum of Association/Trust deed/Board resolution
for the authorized signatories along with the account opening form.
· Details with respect to the bank account details of an investor must be indicated in the
space provided for the same in the account opening form.
· If an investor is interested in availing the facility of standing instructions for credits to his
account, then such instructions may be given to the DP. Otherwise, he will need to give a
receipt instruction to his DP for receiving credits to his account.
35
BENEFITS OF DEMATERIALISATION
• No stamp duty for transfer of securities in the Depository System. In the case of
physical shares, stamp duty of 0.25% of sale value is payable on transfer of shares.
• Elimination of bad deliveries and all risks associated with physical certificates such
as loss in transit, theft, mutilation, damage, etc.
• Facility for freezing/locking of investor accounts to make it no operational for
specified period.
• Instead of filling up transfer deed(s) a simpler form is to be given to the DP.
• Facility to pledge and hypothecate securities. Pledging Dematerialized securities is
easier and advantageous as compared to pledging physical shares. In respect of
shares in "compulsory Demat" category, banks prefer to lend against shares held in
electronic form, and offer better terms.
• Odd lots are not differentiated in the electronic system. Even a single share can be
traded at the market rates without any reduction in realization.
• Just like a bank branch, the DP will give a periodical statement of account of
holdings. In addition, investor can obtain a statement of holdings as and when
required for a fee.
• In case investor loses the statement of holdings, he can inform his DP and obtain a
duplicate statement. Investor's statement of holdings cannot be used by anybody else
for trading in his account.
• When an investor opens an account with a DP, he signs an agreement with the DP in
which the DP will indemnify the investor for any mis-use of his holdings. The
depository will also ensure that the interests of the investor are protected.
Grievances, if any, against his DP will be resolved by the Depository.
• Every transaction in investor's account will have to be authorized by him, which
ensures total control of the investor over his investment.
• A safe and convenient way to hold securities and there is immediate transfer of
securities.
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• Change in address recorded with DP gets registered with all companies in which
investor holds securities electronically eliminating the need to correspond with each
of them separately.
• Reduction in paperwork involved in transfer of securities and Reduction in
transaction cost
• Automatic credit into demat account of shares, arising out of bonus/ split / merger/
consolidation etc.
DEMAT PROCESS
37
INFORMATION NEEDED FOR DEMAT ACCOUNT
An investor has to give his bank account details at the time of account opening. It is for the
protection of investor’s interest. The bank account number will be mentioned on the interest
or dividend warrant, so that such warrant cannot be encashed by any one else. Further, cash
corporate benefits such as dividend, interest will be credited to the investors account
directly through the ECS (Electronic Clearing Service) facility, wherever available, by the
company.
An investor can change the details of his bank account. Since in the depository system
monetary benefits on the security balances are paid as per the bank account details provided
by the investor at the time of account opening, the investor must ensure that any subsequent
change in bank account details is informed to the DP.
An Investor should immediately inform his/her DP if the address of the investor changes,
who in turn will update the records. This will obviate the need of informing different
companies.
An investor can open more than one account in the same name with the same DP and also
with different DPs.
An investor has not to keep any minimum balance of securities in his/her accounts.
Depository / DP can be chosen by investor as per convenience irrespective of the DP of the
broker.
The demat account must be opened in the same ownership pattern such as securities owned
individually in which the securities are held in the physical form. e. g. if one share
certificate is in the individual name and another certificate is jointly with somebody, two
different accounts would have to be opened.
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WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANT
Depository can in many ways be compared to a bank. Securities of the investors are held in
electronic / book entry form by the Depository. Apart from holding the securities,
Depository also provides services related to transactions in securities.
In India, a Depository Participant (DP) is described as an agent of the depository. They are
the intermediaries between the depository and the investors. The relationship between the
DPs and the depository is governed by an agreement made between the two under the
Depositories act. In a Strictly legal sense, a DP is an entity who is registered as such with
SEBI under the provisions of the SEBI Act.
Think of it like a bank. The head office where all the technology rests and details of all
accounts held is like the depository. And the DPs are the branches that cater to individuals.
At present two Depositories viz. National Securities Depository Limited (NSDL) and
Central Depository Services (I) Limited (CDSL) are registered with SEBI
NSDL has minimum net worth of Rs 100 crores. NSDL deals with shares in dematerialized
form through depository participants who are agents of investor banks, stockbrokers and
financial institutions. NSDL Depository Participant can be a public financial institution,
bank, custodian, registered stockbroker or a non-banking financial company subject to the
approval from the Depository Company and SEBI. NSDL aims at ensuring the safety and
soundness of Indian capital market by developing settlement solutions that increase
efficiency, minimize risk and reduce costs.
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CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)
CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading
banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank,
Standard Chartered Bank, Union Bank of India and Centurion Bank. Each and every
activity of CDSL stem from the essential reason behind forming this depository, i.e. to
encourage India's individual investors to benefit from actively participating in a depository.
40
The charges for account closure and securities transfer due to
account closing.
SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advised that
with effect from January 09, 2006, no charges shall be levied by a depository on DP and
consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all the securities
lying in his account to another branch of the same DP or to another DP of the same
depository or another depository, provided the BO Account/s at transferee DP and at
transferor DP are one and the same, i.e. identical in all respects. In case the BO Account at
transferor DP is a joint account, the BO Account at transferee DP should also be a joint
account in the same sequence of ownership.
All other transfer of securities consequent to closure of account, not fulfilling the above-
stated criteria, would be treated like any other transaction and charged as per the schedule of
charges agreed upon between the BO and the DP.
Investors can freeze or lock their accounts for any given period of time, if so desired.
Accounts can be frozen for debits (preventing transfer of securities out of accounts) or for
credits (preventing any movements of hindrances into accounts) or for both.
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Trading / Settlement
Traditionally settlement system on Indian stock exchanges gave rise to settlement risk due
to the time that elapsed before trades were settled by physical movement of certificates. The
process of physical moving the securities from seller to his broker to clearing corporation to
the buyer’s broker and finally to the buyer took time with the risk of delay
Somewhere along the chain. Now depository holds securities in dematerialized form. The
procedure for buying and selling dematerialized securities is similar to the procedure for
buying and selling physical securities. The difference lies in the process of delivery (in case
of sale) and receipt (in case of purchase) of securities.
In case of purchase:-
• The broker will receive the securities in his account on the payout
day
• The broker will give instruction to its DP to debit his account and
credit investor's account
• Investor will give ‘Receipt Instruction to DP for receiving credit by
fill appropriate form. However one can give standing instruction for credit in to ones
accounts that will obviate the need of giving Receipt Instruction every time.
In case of sale:-
The investor will give delivery instruction to DP to debit his account and credit the broker’s
account. Such instruction should reach the DP’s office at least 24 hours before the pay-in as
other wise DP will accept the instruction only at the investor’s risk.
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not submit 'Receipt in' slip every time you buy securities. If you are particular that securities
can be credited to your account only with your consent, then do not say 'yes' [or tick ] to
standing instruction in the application form.
• If the account is a joint account, all the joint holders have to sign the
instruction slips. Instruction cannot be executed if all joint holders have not signed.
• Do not leave signed blank DIS with anyone viz., broker/sub broker.
• Keep the DIS book under lock and key when not in use.
• If only one entry is made in the DIS book, strike out remaining space
to prevent misuse by any one.
• Investor should personally fill in target account -id and all details in
the DIS.
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It is possible to give delivery instructions to the DP over Internet .Both NSDL and CDSL
have launched this facility for delivering instructions to your DP over Internet, called
SPEED-e and EASI respectively. The facility can be used by all registered users after
paying the applicable charges.
If any person required to deliver a security in the market does not readily have that security,
he can borrow the same from another person who is willing to lend as per the Securities
Lending and Borrowing Scheme. Lending and borrowing has to be done through an
'Approved Intermediary' registered with SEBI. The approved intermediary would
borrow the securities for further lending to borrowers. Lenders of the securities and
borrowers of the securities enter into separate agreements with the approved intermediary
for lending and borrowing the securities.
Lending and borrowing is affected through the depository system. You can lend your
securities through Approved Intermediaries registered with SEBI. One can lend his/her
demat securities by entering into an agreement with the approved intermediary to be a
lender under this scheme. After that, you may lend securities any time by submitting
lending instruction to your DP. Intermediary may return the securities at any time or at the
end of the agreed period of lending. Intermediary has to repay the securities together with
any benefits received during the period of the loan. One can receive the corporate benefits
which would accrue on these securities during the period of lending.The benefits will be
given to the Intermediary/borrower. However, whenever the securities are being returned /
recalled. Intermediary/borrower will return the securities together with benefits received.
44
PHYSICAL SEGMENT
- All requests for change of name should be accompanied by a copy of the notification in
Official Gazette or a Newspaper.
- The new specimen signature duly attested by holder's banker should be lodged with the
Company to take on record the new signature.
Change of Address
Please inform the R&TA viz Integrated Enterprises (India) Limited immediately if there is
any change in address, quoting Folio No. Duly signed by the main (1st) holder as per
45
specimen signature recorded with us. This is the reason for which we would advise you not
to send change of address request by mail. If shares are held in demat form, please
advice your DP regarding change of address.
Any communication to the Company regarding loss of share certificates should always be
signed by the shareholder as per specimen signature registered with the Company,
accompanied by FIR lodged with local police station giving full details of lost certificate(s)
such as certificate(s) Nos., Distinctive Nos. etc.
- Please immediately apply for injunction order in appropriate Court of Law for stopping
transfer, giving full details of Certificate Nos., Distinctive Nos. etc.
- Upon receipt of such communication, the procedure to be followed for obtaining duplicate
share certificates will be advised
Nomination
Nomination when shares are held in physical form. Nomination will enable smooth
inheritance of ownership of the shares by the Nominee without any procedural difficulties.
(Presently, there is no difficulty where shares are registered in joint names. But if the shares
are held in an individual name, addition of a joint name can only be done as a transfer,
involving share transfer form, stamp duty, surrender of original certificates etc. Following
the nomination procedure eliminates all this inconvenience). Therefore, if shares are held in
a single name, with the intention of holding them for some more time, then please advise
Nomination immediately without delay
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Following Instructions for the Nomination
1. Nomination can be made only by individuals, holding shares on their own behalf singly
or jointly. Non-individuals including society, trust, body corporate, partnership firm, Karta
of Hindu Undivided Family, holder of power of attorney cannot nominate. If the shares are
held jointly, all joint holders must sign the nomination form.
2. A minor can be nominated by a holder of shares and in that event the name and address
of the Guardian must be given by the holder.
3. The nominee shall not be a trust, society, body corporate, partnership firm, Karta of
Hindu Undivided Family or a power of attorney holder. A non-resident Indian can be a
nominee on repatriable basis.
5. The Company will be fully discharged from its responsibility towards the legal heirs of a
shareholder, if the shares are transmitted as per the nomination filed with the company,
without any further reference to the legal heirs of a deceased individual shareholder(s)
6. Where the space provided in the Form is not sufficient, shareholders are requested to
attach separate sheet(s) giving details of distinctive nos. of shares.
7. The Nomination Form should be filed in duplicate with the Company, who will return
one copy thereof to the shareholder.
8. Although Form 2B as prescribed does not provide for specimen signature of nominee,
this has been suggested in order to facilitate smooth transmission of title to the nominee
when the need arises.
47
9. Please note that if physical shares are subsequently converted into electronic form, any
nomination already filed will cease to have effect; the nomination details furnished to the
Depository Participant will prevail thereafter
Securities issued by the same company, issued at different times or carrying different rights,
terms and conditions are considered different securities for the purpose of allocating ISIN
and are allotted distinct ISINs. In India, SEBI assigns ISIN to various publicly traded
securities. Different ISINs are allocated to the physical and dematerialized securities
Of the same issue.
SEBI being the national numbering agency for India has permitted NSDL to allot
international securities identification number (ISIN) for demat shares. The ISINs allotted by
NSDL does not at any point of time breach the uniqueness of ISIN of physical form for the
same security. ISIN for a security is allotted when the security is admitted to NSDL. The
numbering system is simple. The numbering system of ISIN is in compliance with the
structure of ISIN adopted by SEBI.
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International Securities Identification Number:
1. Issued by International Standards Organization (ISO) member countries in accordance
with ISO 6166.
2. ISIN is 12 digit alpha numeric numbers.
3. It has three components, prefix, basic & check digit.
4. Prefix is a two letter country code i.e. IN for India.
5. The basic number has nine alpha numeric characters.
6. The last digit is check digit. It ensures the ISIN is valid. Numbering system of ISIN
The numbering structures for securities in NSDL are of 12 digit alpha numeric string. The
first two characters represent country code i.e. IN(in accordance with ISO 3166). The third
character represents the issuer
type as detailed below:
Issuers type
49
character) represent company identity. The first 3 characters are numeric. The fourth
character is alpha character. The numbering begins with ‘001A’ and continues till ‘999A’
and proceeds to ‘001B’. the next two characters (the eight and ninth characters) represent
security type for a given issuer. Both the characters are numeric. The next two characters
(the tenth and eleventh characters) are serially issued for each security of the issuer entering
the system. Last digit is double-add-double check digit.
The security types are planned which may be expanded as per the need as detailed below:-
50
RESEARCH METHODOLOGY
51
Research methodology can be said to have four major components namely-Research design,
Sample design, Data collection procedure and methods of analyzing and reporting the
findings.
Research Design
The research problem having been formulated in clear cut terms, the researcher will be
required to prepare a research design i.e., he will have to state the conceptual structure with
in which research would be conducted. The preparation of such a design facilitates research
to be as efficient as possible yielding maximal information. But how all there can be
achieved depends mainly on the research purpose. Research purpose may be grouped into
four categories.
(1) Exploration
(2)Description
(3) Diagnoses &
(4) Experimentation.
Exploratory research studies are those whose main purpose is that of formulating a
problem for more precise investigation or of developing the working hypotheses from on
operational point of view.
Descriptive research studies are those studies which are concerned with describing the
characteristics of a particular individual, or of a group
Diagnostic research studies determine the frequency with which something occurs.
Experimental research studies are those where the researcher tests the hypothesis of
casual relationship between the variables.
52
Research design of this particular research study of dematerialization of shares is primarily
based on descriptive and diagnostic research design. As descriptive and diagnostic research
design describes the characteristics and determines the frequency with which something
occurs respectively, similarly this research determines the characteristics of the individuals
who deal in share and also determine the frequency of dealing on the basis of their
characteristics.
Sample Design
All the items under consideration in any field of inquiry constitute a ‘Universe’ or
‘Population’. A complete enumeration of all the items in the population is known as a
census inquiry. This type of inquiry involves a great ideal of time, money and energy.
Hence quite often a few items so selected constitute what is technically called a sample.
The researcher must decide the way of selecting a sample or what is popularly known as
sample design. A sample design is a definite plan determined before any data are actually
collected for obtaining a sample from a given population. Samples can be either probability
or no probability samples. With probability samples each element has a known probability
of being included in the sample but non-probability samples are those based on simples do
not allow the researcher to determine this probability.
Probability samples are those based on simple random sampling, systematic sampling , etc
where as non probability samples are those based on convenient sampling, judgment
sampling etc.
The required data is collected both from primary as well as secondary sources.
Primary Sources: The primary data was collected through structured unbiased
questionnaire and personal interviews of investors. For this purpose questionnaire included
were both open ended & close ended & multiple-choice questions.
Secondary Sources: Secondary data is the data, which is collected and complied for
different purposes, which are used in research for this study. The secondary data includes
53
material collected from:-
Magazines & Bulletins - Brochure of unicon investment solutions.
Internet
www.sebi.gov.in
www.nseindia.com
www.uniconindia.in
SIZE OF SAMPLE
The overall sample involved in the study consisted of 50 individuals. Keeping in view the
limited resources of time, a limited sample of individuals. It was fixed before hand and
every effort was made to cover the given number of individuals with available time for the
collection of data for this project. The data was collected with the help of the Questionnaire
herself by the researcher.
The methodology used for this purpose is Survey and Questionnaire Method. It is a time
consuming and expensive method and requires more administrative planning and
supervision. It is also subjective to interviewer bias or distortion.
Analysis of Data
After the data have been collected, the researcher turns to the task of analyzing them. The
analysis of data requires a number of closely related operations such as establishment of
categories, the application of these categories to raw data through coding, tabulation and
then drawing statistical inferences. The unwisely data should necessary be condensed
into a few manageable groups and tables for further analysis. Thus researcher should
classify the raw data into some purposeful and usable categories. In the process of analysis,
relationships or differences supporting or conflicting with original or new hypotheses
should be subjected to tests of significance to determine with what validity data can be said
to indicate any conclusion
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Interpretation
The interpretation is done on the basis of the analyzed data and also some recommendations
are given to fill the loopholes of the actual scenario.
The basic purpose of this question is to know about how many people are \aware of the
stock market and its activities.
50
0 20 40 60
NO.OF RESPONSES
YES NO
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This graph shows that all the 50 individuals were aware of stock market. So it can also
be possible that investors will rise in near future.
The basic purpose of this question is to know about awareness of demat account among
respondents.
100%
80%
60%
40%
20%
0%
RESPONSES
YES NO
Analysis :-
The above table clearly shows that from a sample size of 50 respondents, 40 individuals
were aware of demat account.
56
3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THE STOCK
EXCHANGE
The purpose of this question is to know about the duration for which investor has been
transact in stock exchange.
20
15
10
5 no.of
0 responses
than 1
2 year
Less
year
duration
Analysis:-
The above table clearly shows that from a sample size of 50 respondents, 15 have been
trading in the stock exchange for more than 2 years. 10 investors were trading for 2 years
and remaining 25 for one year or less than a year.
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4. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER?
The purpose of this question is know satisfaction about demat service provider.
50
40
NO. OF 30
YES
RESPONSES 20
NO
10
0
RESPONSES
This graph shows that most of the people were satisfied with demat service provider.
58
5. PROBLEMS BEING FACED BY THE RESPONDENTS RELATING TO
TRADING
This question tells us about the type of problems faced by the respondents.
PROBLEMS
PROBLEMS NO. OF RESPONSES % OF RESPONSES
NO TRANSFER OR BAD 10 20
DELIVERY OF SHARES
OTHER TYPES OF PROBLEMS 20 40
NO PROBLEM 20 40
TOTAL 50 100
20
No Transfer or Bad Delivery
15
Of Shares
No. Of Responses 10 Othes Types of Problem s
5
No Problems
0
Responses
Analysis:-
From the above chart we can see that 20 investors faced no problem due to the introduction
of DEMAT. Nearly 10 respondents faced problems due to non-transfer and bad delivery of
shares. Because of many sick companies being listed in the stock exchange, the problem
of non-receipt of dividend can be found among 7 investors. There were 20 persons who
were facing other problems.
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Limitations of the Research Study
• Due to the lack of time, it was not possible for the researcher to
approach all the people.
• The respondents were asked to indicate their true responses to the
questions being asked, but rather than giving the response, they might have been in a
form of expert comments which might have based the result of the study.
• The results of the study may not be universally applicable due to
regional constraints.
• Money was also considered as a major constraint during the research
work.
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BIBLIOGRAPHY
• Unicon forms for opening depository and trading account.
• Study material of capital market and derivatives market of NCFM.
• Zikmund, William G; “Business Research Methodology”, Seventh
Edition, Thompson South Western Publication
• Websites Visited
www.sebi.gov.in
www.nseindia.com
www.bseindia.com
www.nseindia.com
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QUESTIONAIRE
I am a student of B.B.A. from Aryabhatta College of Technical Education, Ajmer,
Rajasthan. You are required to fill this questionnaire to enable me to undertake the study on
the said project.
NAME: ________________________________
CONTACT NUMBER: ____________________
OCCUPATION: __________________________
ADDRESS: ______________________________
1. Are you aware of stock market?
(a) Yes (b) No
2. Do you deal in share?
(a) Yes (b) No
3. Are you aware of DEMAT?
(A). Yes (b) No
4. Are you aware of REMAT?
(a) Yes (b) No
5. How long have you been transacting in the stock exchange?
(a) Less than 1 year (b) 1 year (c) 2 year (d) More than 3 year
6. Do you trade frequently or occasionally?
(a) Frequently (b) Occasionally
7. In which securities do you trade frequently?
(a) Equity (b) Bonds (c) Debentures (d) Futures & Options (e)All
8. Which type of script you have?
(a) Physical (b) Dematerialized
9. Why you have not dematerialized your script?
(a) Lack of awareness (b) Time constraint (c) Liability of changes
10. On what basis you have taken your decisions of opening of demat A/c?
(a) Service (b) Changes (c) Convenience
11. Are you satisfied with your demat service provider?
62
(a) Yes (b) No
13. What type of problems do you centrally face when you trade in securities?
(A) Non transfer of shares (b) Other type of problems (c) Bad transfer of shares
(d) No Problem
+
63