Demat ppt (1)
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Transcript of Demat ppt (1)
By Rahul Sheth - 91
Jimit Soni - 102
An Introduction to Demat Accounts
What is a DEMAT Account
DEMAT refers to dematerialized a/c
DEMAT account is mandatory for trading and investing of shares
It is similar to a bank a/c where actual money is replaced by shares
How to Open ???
Demat a/c can be opened with Depository Participant (DP) who will provide official procedure to open an account.
The DP is an intermediary between the Depository & the Investor
There are two depositories National Securities Depository Limited (NSDL)Central Depository Services Limited (CDSL)
DP & its Role
Is Demat Account necessary ???
As per the Securities & Exchange Board of India (SEBI) guidelines all trades have to be settled in dematerialized form only
Although SEBI has allowed trades of up to 500 shares to be settled in physical form
Hence, if you want to buy and sell shares through the stock exchange, you necessarily have to have a demat account.
Benefits
It allows immediate transfer of securities
No stamp duty required
Purchase ,hold and sell shares in electronic form
Elimination of risks such as Bad delivery, loss of certificates, delay & theft
Benefits … contd
Shares can be credit / debited automatically You can even buy / sell single a share
Auto Credit of Rights / Bonus / Public Issues / Dividend credit through ECS
Auto Credit of Public Issue refunds to the bank account
Documentation Process
Need to fill demat request form One or two Passport size photograph, Proof of address like Voter ID card Electricity bill / Ration Card Employee ID Card Bank attestation Latest IT Return Passport in case of NRI PAN Card as a proof of identity As of April 2006 it is mandatory, Without a PAN CARD you are not be eligible
to open a Demat account
Finally in 7 working days DEMAT A/c gets opened for trading after detailed verification
Who all can avail Demat Account
Indian Citizen(individual / joint or by a minor)
Min 18 yrs or can have a joint a/c in case of a minor
HUF All sorts of the proofs of the KARTA of that
HUF
NRI All sorts of information from foreign & host
country
How does it work…..?
When you buy shares, the broker credits your demat account with the shares and these are reflected in your statement of holdings. if you are trading through an internet based platform, you can view your holdings online. Typically the broker credits the shares on T+2
When you sell the shares, you need to give your broker a delivery instruction note, where in you fill the various details of the stock sold. Your account is debited with the shares and you are then paid the money for the shares sold. If you are trading through the internet, the account will automatically reflect a debit of the shares and amount credit to your account.
The Two Depositories
Like there are two main Stock Exchanges, the NSE & BSE, there are also two set-ups handling Demat Account services called NSDL and CSDL
Depending on where a particular security is listed/traded, it is handled by the concerned set-up, both in case it is listed/traded on both exchanges.
NSDL is the largest depository of Indian stocks
Trades done is NSE are linked directly to NSDL
Trades done is BSE are linked directly to CDSL.
Charges & Advantages of Share khan A/c opening AMC Intraday
brokerageDelivery
Brokerage
120 450(1st yr free) Higher of 10 p per share or 0.10% of transaction value
Higher of 50 p per share or 0.50% of transaction value
•Sharekhan offers different trading platform to suite customer requirement. This includes online browser based trading, Installable terminal, mobile, call & trade and in-person trade though branch offices.•Sharekhan offers online and classroom training, seminars and workshops to investors. •Sharekhan has India-wide network of branches & low brokerage charges•You can surly find a Sharekhan in your neighborhood•Call & Trade facility is free with Sharekhan•People prefers this also due to their personal relations & word of mouth
Charges & Advantages of Axis Direct
A/c opening AMC Intraday brokerage
Delivery Brokerage
999 500 Higher of 5 p per share or .10% of transaction value
Higher of 50 p per share or .50% of
transaction value •Axis direct also offers trading platform to suite customer requirement. This includes online browser based trading, Installable terminal, mobile, call & trade and in-person trade though branch offices.•It being a subsidiary of Axis bank it provides 3 in 1 a/c which brokers can’t•Funds can be transferred from other bank a/c’s via net banking in case of shortage•Already has a huge customer base of CASA •Good Brand Image •Special Relationship managers assigned for Privileged / HNI clients
Other Banks’ & Broker’s chargers
Banks A/c opening AMC Intraday brokerage
Delivery Brokerage
HDFC securities
799 825 Higher of 25 rs or 0.10% of
trans value
Higher of 25 rs or 0.50% of
trans value
ICICI direct 975 500/450 0.0275 % of trans value
0.55% of trans value
Broking Firms
A/c opening AMC Intraday brokerage
Delivery Brokerage
Motilal Oswal
Securities
500 450 0.03 % of trans value
or 0.30% of trans value
Angel Broking
- 500/450 .0275 % of trans value
.55% of trans value
Qualified CDSL DP’s
Axis Bank Bank of India Geojit BNP Paribas Financial Services HDFC Bank IL&FS Securities Services India Infoline Motilal Oswal Securities Reliance Securities Sharekhan
Qualified NSDL DP’s
Axis Bank Barclays Securities (India) BNP Paribas Citigroup Global Markets India Geojit BNP Paribas Financial Services HDFC Bank HSBC ICICI Bank IL&FS Securities Services India Infoline Interactive Brokers (India) Kotak Securities Sharekhan -
Demo links
http://home.axisdirect.co.in/dynamicWEB/demo/TradingUser/easy_2_1.html
http://www.sharekhan.com/tradetigernew/Demo/demopage.html