NSDL's Guide to Demat - Part II


Dematerialisation
1.
What do you mean by dematerialisation?
Ans.
Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with its DP. In order to dematerialise certificates; an investor will have to first open an account with a DP and then request for the dematerialisation of certificates by filling up a dematerialisation request form [DRF], which is available with the DP and submitting the same along with the physical certificates. The investor has to ensure that before the certificates are handed over to the DP for demat, they are defaced by marking "Surrendered for Dematerialisation" on the face of the certificates.
2.
Can I dematerialise any share certificate?
Ans.
You can dematerialise only those certificates that are already registered in your name and are in the list of securities admitted for dematerialisation at NSDL. All the scrips included in S&P, CNX, NIFTY and BSE SENSEX have already joined NSDL. This list has more than 4,300 companies and is steadily growing. You can get an updated list of these companies from your DP or from NSDL's office or from NSDL website at www.nsdl.co.in.
3.
What precautions should I take before defacing a share certificate?
Ans.
Before defacing the share certificate, you must ensure that it is available for dematerialisation. You must therefore check with your Depository Participant (DP) whether the ISIN (code number for the security in a depository system) has been activated and made available for dematerialisation by the depository. If yes, then you may deface the share certificate. The certificates are defaced by marking "Surrendered for Dematerialisation" on the face of the certificate.
4.
How long does the dematerialisation process take?
Ans.
Dematerialisation will normally take about 30 days.
5.
What if it takes more than 30 days for dematerialisation of the shares?
Ans.
If the process of dematerialisation takes more than 30 days, please contact your DP. If he is unable to help you, then you may send your grievance to:
The Officer in ChargeInvestor Grievance CellNational Securities Depository Limited4th Floor, Trade WorldKamala Mills CompoundSenapati Bapat MargLower Parel, Mumbai - 400 013Email: relations@nsdl.co.in

IX. Rematerialisation
1.
Can my electronic holdings be converted back into certificates?
Ans.
Yes. If you wish to get back your securities in physical form, all you have to do is to request your DP for rematerialisation of the same. 'Rematerialisation' is the term used for converting electronic holdings back into certificates. Your DP will forward your request to NSDL, after verifying that you have the necessary balance. NSDL in turn will intimate the registrar who will print the certificates and dispatch the same to you.

X. Trading / Settlement
1.
What is the procedure for selling dematerialised securities?
Ans.
The procedure for selling dematerialised securities is very simple. After you have sold the securities, you would instruct your DP to debit your account with the number of securities sold by you and credit your broker's clearing account. This delivery instruction has to be given to your DP using the delivery instruction slips given to you by your DP at the time of opening the account. Procedure for selling securities is given here below:
You sell securities in any of the stock exchanges linked to NSDL through a broker;
You give instruction to your DP to debit your account and credit the broker's [clearing member pool] account;
Before the pay-in day, your broker gives instruction to its DP for delivery to clearing corporation;
Your broker receives payment from the stock exchange [clearing corporation] ;
You receive payment from the broker for the sale of securities.
2.
How can I purchase dematerialised securities?
Ans.
For receiving demat securities you may give a one-time standing instruction to your DP. This standing instruction can be given at the time of account opening or later. Alternatively, you may choose to give separate receipt instruction every time some securities are to be received. The transactions relating to purchase of securities are summarised below:
You purchase securities through a broker ;
You make payment to your broker who arranges payment to clearing corporation on the pay-in day ;
Your broker receives credit of securities in its clearing account (clearing member pool account) on the pay-out day;
Your broker gives instructions to its DP to debit clearing account and credit your account;
You receive shares into your account. However, if standing instructions are not given at the time of opening the account, you will have to give 'Receipt Instructions' to your DP for receiving credit,.
You should ensure that your broker transfers the securities from its clearing account to your depository account, before the book closure. If the securities remain in the clearing account of the broker, the company will give corporate benefits (dividend or bonus) to the broker. In that case, you will have to collect the benefits from your broker.
3.
What do you mean by 'Market Trades' and 'Off Market Trades'?
Ans.
Any trade settled through a clearing corporation is termed as a 'Market Trade'. These trades are done through stock brokers on a stock exchange. 'Off Market Trade' is one which is settled directly between two parties without the involvement of clearing corporation. The same delivery instruction slip can be used either for market trade or off-market trade by ticking one of the two options.
4.
If I sell securities through a sub-broker, which part of the delivery instruction slip should be filled?
Ans.
If you are delivering securities to your sub-broker you would need to fill-in the off-market trade portion of the delivery instruction slip.
5.
What settlement details are required on the delivery instruction slip?
Ans.
On every stock exchange, various settlements are effected every day such as daily settlement , auction settlement etc. Each of these settlements is identified by combination of a market type and a settlement number. You are required to mention the appropriate settlement details on the delivery instruction slip while transferring the shares to your broker's account. These settlement details are available on the contract note issued by the broker.
6.
What is T+3 rolling settlement cycle and when delivery is to be given to a broker ?
Ans.
In case of T+3 rolling settlements , the trades taking place on each trading day are required to be settled on the third day following the date of trade. For example trades of Monday will be settled on Thursday morning. In this example, if you have sold securities, you need to make sure that the securities reach the account of clearing member of the stock exchange latest by Wednesday.
7.
In case of T+3 rolling settlement cycle if I am trading (selling) through a sub-broker when do I need to give delivery instruction to my DP?
Ans.
In this case also the settlement deadlines will remain the same (i.e. Thursday morning for a Monday trade). However, there is an additional transfer involved. You will transfer securities to the sub-broker's account and the sub-broker will further transfer the securities to the account of clearing member. Therefore, in this case you should give delivery instructions to your DP immediately after confirmation of sale transaction.
8.
How do I come to know about the settlement deadlines?
Ans.
The depository participant with whom you have your demat account will prescribe the deadlines to be followed by you for submission of delivery instruction slips. You should deliver instructions to your DP as per these deadlines.
9.
When I buy shares, in what time should I receive the securities from my broker?
Ans.
The broker is expected to transfer the securities to you within two working days or four calendar days after securities are received in his pool account, provided you have made the requisite payment to the broker.
10.
What precautions do I need to observe with respect to Delivery Instruction Slips [DIS]?
Ans.
The following precautions are to be taken :-
Ensure and insist with your DP to issue DIS book; do not accept loose slips.
Ensure that DIS numbers are pre-printed and DP takes acknowledgment from you for the DIS booklet issued to you.
Ensure that your account number [client id] is pre-stamped.
If your 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.
Avoid using loose slips
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 , strike out remaining space to prevent misuse by any one.
Please fill in target account -Id and all details in the DIS, yourself.
11.
What is 'execution date' given in the delivery instruction form?
Ans.
Execution date is the date on which securities will be actually debited from your account. The execution date written on the delivery instruction has to be entered by the DP, in the DPM system [computer]. DPM system will record the date and will debit your account only on that date. You may issue the instruction well in advance of the date on which you want the securities to be debited from your account but your account will be debited only on the execution date. This facility is called future execution date facility.
12.
What benefit do I get by giving delivery instruction with a future execution date?
Ans.
By giving a future dated instruction the risk of non-execution of instruction due to lack of time or last minute rush is covered.
13.
What is the importance of record dates to me?
Ans.
In case the securities bought by you are yet to be transferred into your account by your broker before the book closure / record date, you will not be entitled to receive corporate benefits such as dividend or bonus since your name will not figure in the list of beneficial owners. Hence, you must ensure that securities bought by you are transferred into your account before the book closure / record date announced by the company.

XVII. Safety Features
1.
How will I know that my DP has updated my account after each transaction?
Ans.
Your DP will give you a Transaction Statement periodically, which will detail your current balances and the various transactions you have done through the depository account. If you so desire, your DP may provide Transaction Statement at intervals shorter than the stipulated ones, probably at a cost.
2.
At what frequency will I receive my Transaction Statement from my DP?
Ans.
You will receive a Transaction Statement from your DP once in a quarter. If you have done any transaction during the quarter, you will receive the statement within fifteen days of the transaction.
3.
What is to be done if there are any discrepancies in my transaction statement?
Ans.
In case of any discrepancy in the transaction statement, you can contact your DP. If the discrepancy cannot be resolved at the DP level, you should approach NSDL. NSDL also sends out a statement of holdings to a few clients of DPs, picked at random. In case the balance in your account as indicated by your DP does not tally with the balance as indicated by NSDL, you can contact your DP/ NSDL for clarification.
4.
What happens if I lose my Transaction Statement?
Ans.
You should inform your DP and obtain a duplicate Transaction Statement.
5.
What security do I have if the only proof of my holdings in the depository is merely a piece of paper indicating my account balance?
Ans.
No transaction can be effected in your account without your written authorisation. Further, if you are away for a long time, you have the facility of freezing your account wherein only credits into your account will be allowed and no debit will be possible.
6.
What will happen if my DP goes bankrupt or stops operation?
Ans.
In a rare event of your DP going bankrupt or closing the operations, the interests of the investors will be fully protected. In such a situation, the investors will be given an option of either transferring the securities to a new DP or they may rematerialise the securities.
7.
What precautions does NSDL take to protect the data in its depository system?
Ans.
The data carries a high importance in the NSDL depository system. NSDL has taken necessary steps to protect the transmission and storage of data. The data is protected from unauthorised access, manipulation and destruction. The following back up practices are adopted to protect the data:
Local Back up
Remote Back up
Disaster Recovery Site
In addition to this, every DP is required to take daily back up, at the end of each day of operation.
8.
Can I freeze my account?
Ans.
NSDL system provides the facility to freeze the depository accounts for any debits or for both, debits and credits. In an account which is "freezed for debits", no debits will be permitted from the account, till the time it is unfreezed.
9.
What should I do if my DP is unable to resolve my problem?
Ans.
In case of failure of a DP to resolve your grievance, you can write to the investor grievance cell of NSDL at the following address:
The Officer in ChargeInvestor Grievance CellNational Securities Depository Limited4th Floor, Trade WorldKamala Mills CompoundSenapati Bapat MargLower Parel, Mumbai - 400 013Email : relations@nsdl.co.in

0 comments:

Post a Comment

All comments are moderated. Please post no spam

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.

Information and opinions provided on this website (www.investchips.com) has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. Investchips.com and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. Investchips.com,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. Investchips.com and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.
  • Google, as a third party vendor, uses cookies to serve ads on this site.
  • Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
  • Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
  • www.investchips.com never collects any personal information of visitors.