INDEX

1) Introduction of demat account

2) Objectives, advantages and disadvantages of demat account

3) Information about Sharekhan and procedure for opening demat

account

4) Process of dematerialising shares, Transfer of shares

5) Trading & Settlement Procedure

6) account opening charges and custodian charges and Brokerage rate of

different broker

7) History of E Trading and detail of online trading

8) Allotment of shares through demat account

9) Procedure to close demat account

10) Conclusion

1 INTRODUCTION OF DEMAT ACCOUNNT

Demat refers to dematerialisation of shares .Any

investor who wish to purchase shares must open

documents with registered broker.

It is, however desirable that you hold securities in

demat form as physical securities carry the risk of

being fake, forged or stolen.

Just as you have to open an account with a bank if

you want to save your money, make cheque

payments etc, Nowadays, you need to open a demat

account if you want to buy or sell stocks.

You approach a DP and fill up the Demat account-opening

booklet. You will then receive an account number and a DP ID

number for the account. Quote both the numbers in all future

correspondence with your DPs.

You have to approach the DPs (remember, they are like bank

branches), to open your demat account.

Let's say your portfolio of shares looks like this: 150 of Infosys,

50 of Wipro, 200 of HLL and 100 of ACC. All these will show

in your demat account.

So you don't have to possess any physical

certificates showing that you own these shares.

They are all held electronically in your account. As

you buy and sell the shares, they are adjusted in

your account.

Just like a bank passbook or statement, the DP

will provide you with periodic statements of

holdings and transactions. It is a type of banking

account which dematerializes paper-based

physical stock shares.

The depository system helps in reducing the cost of newissues

due to less printing and distribution cost..In demat account there

is no possibility of fake certificate and manipulation in

preparing share certificate , no chances of shares being

misplaced as it is routed through electronic mode and it is one

of the convenient way of settling transaction and operating

demat account

The dematerialized account is used to avoid holding physical

shares and the shares are bought and sold through a stock

broker. This account is popular in India. The Securities and

Exchange Board of India SEBI mandates a demat account for

share

Demat account allows you to buy, sell and transact shares

without the endless paperwork and delays. It is also safe, secure

and convenient.

Demat account is a must as all trade are now being settled in a electronic mode. Nowadays, practically all trades have to be settled in dematerialised form.  

Banks are also advantageous because of the number of branches

they have. Some banks give the option of opening a Demat

account in any branch, while others restrict themselves to a

selected set of branches.

Some private banks also provide online access to the Demat

account. So, you can check on your holdings, transactions and status

of requests through the net banking facility. A broker who acts as a

DP may not be able to provide these services.

2 Object Of Demat Account

India has adopted this system in which book entry is

done electronically.

It is the system where no paper is involved. Physical form is

extinguished and shares or securities are held in electronic mode.

Before the introduction of the depository system by the

Depository Act, 1996, the process of sale, purchase and transfer of shares

was a huge problem and the safety perspective was zero.

Benefits of demat account

The following are benefits of demat account

Its a safe and convenient way to hold securities

Immediate transfer of securities is possible

It provides more acceptability and liquidity of securities.

It ensures faster communication to investors. It helps avoid bad

delivery problem due to signature differences, etc.

It ensures faster payment on sale of shares. No stamp duty is paid on

transfer of shares.

There is no stamp duty on transfer of securities

Elimination of risks associated with physical certificates such as bad

delivery, fake securities, delays, thefts etc

There is a major reduction in paperwork involved in transfer of

securities,reduction in transaction cost etc

The depository system reduces risks involved in holding physical

certificated, e.g., loss, theft, mutilation, forgery, etc.

No odd lot problem, even one share can be sold thus there is a

advantage

Change in address recorded with DP gets registered with companies

in which investor holds securities electronically eliminating the need

to correspond with each of them separately;

Transmission of securities is done by DP eliminating correspondence

with companies;

Automatic credit into demat ac bonus/split/consolidation/merger etc.

Holding investments in equity and debt instruments in a single

account.

It ensures transfer settlements and reduces delay in registration of

shares.

Immediate credits in case of any allotment in bonus, rights issues and

IPO s.

It increases the efficiency of the registrars and transfer agents and the

Secretarial Department of the company.

it reduces time taken during trading and avoiding the problem like

signature mismatch and loss of certificates and the risk due to fire and

theft

It eliminates chances of forgery – bad delivery.

The depository system reduces risk of delayed settlement.

Shares are credit automatically in Demat account ,no paper work is

required

Demat account holders need not pay stamp duty posted.

It increases confidence in investors.

Shares are credit automatically in Demat account ,no paper work is

required

You can open a multiple demat account, which can be operated by

multiple holders

It is quick, easy, safe and secure

You can even sold one share as per your choice

It increases overall of trading and profitability.

You can save a transaction cost with quick transfer

It ensures greater profit due to increase in volume of trading.

Nomination facility is available in Demat account

You can purchase ,hold and sell shares in electronic form .

You can open as many account ,there is no limit on that, and you can

open your account before you buy your first security

Converting physical holding into electronic holding

(dematerialising securities) In order to dematerialise physical

securities one has to fill in a DRF (Demat Request Form) which is

available with the DP and submit the same along with physical

certificates one wishes to dematerialise. Separate DRF has to be filled

for each ISIN Number.

Disadvantages of Demat Account

Trading in securities may become uncontrolled in case of

dematerialized securities.

It is incumbent upon the capital market regulator to keep a close

watch on the trading in dematerialized securities and see to it that

trading does not act as a detriment to investors.

The role of key market players in case of dematerialized securities,

such as stock-brokers, needs to be supervised as they have the

capability of manipulating the market.

Multiple regulatory frameworks have to be confirmed to, including

the Depositories Act, Regulations and the various By-Laws of various

depositories.

Additionally, agreements are entered at various levels in the process

of dematerialization.

These may cause anxiety to the investor desirous of simplicity in

terms of transactions in dematerialized securities.

However, the advantages of demat account are more as

compare to physical trading acount

3 Information about sharekhan

Sharekhan is a leading online stock broker in India. Sharekhan

is actually a brand name from 'SSKI Securities'.

A Demat Account is an account which you need in India in

order to buy and sell shares.

Earlier shares or stocks or a company were bought and sold in

paper format. Now they are stored electronically. Just like money is saved in

your bank account, Shares are stored in your Demat Account

You can open a Demat Account with sharekhan. This is

especially recommended if you have an online trading account with

Sharekhan.

You can then link you Sharekhan trading account with your

Sharekhan Demat Account so that any shares bought with the trading

account can be directly transferred to your Demat.

In India if you are planning to trade in shares, buy sell stocks,

trade in stock market derivatives like futures and options, or invest in

commodities like gold etc. you should know about Sharekhan.

You can also open a Sharekhan demat account which investor

need in India to buy and sell shares.

Documents Needed to Open a Sharekhan Demat Account.

The following are the documents to be submitted to open Sharekhan

Demat account

1. PAN Card. Pan card is now mandatory in order to open a Demat

Account. Without one cannot open demat account .without PAN card

on e can become nominee

2. Address Proof. ration card, driver's licence, electricity bill, voters id

or election card, etc. can be submitted for opening demat account

3. Your recent photographs. Two or three.

4. A cancelled check. This may or may not be required. But carry your

bank passbook and check book when you go to open a Sharekhan

Demat Account

Who can be nomineee?

Nomination facility is available in Demat Account. The account

holder(s) has to provide nomination details or given a declaration.

Individuals, having/opening demat accounts, either, singly or jointly with

one or two joint holders can appoint nominee.

A nominee shall not be a Society, Trust, Body Corporate, Partnership

Firm, Kartha of HUF or a Power of Attorney holder.

If the account is held jointly, all the joint holders are required to sign

the nomination form.

Nomination once given can be changed / deleted as and when

required. Only one individual can be appointed as a nominee for a demat

account.

A minor can be nominated. In such case the beneficial owner should

provide the name and address of the Guardian of the minor nominee.

Sharekhan Demat Account Charges

1. Sharekhan Demat Account Opening Charges: NIL

2. Sharekhan Demat Account Maintenance Charges: Rs. 75 per

quarter, i.e. Rs. 300 per anum.

3. Sharekhan Demat Account Closing Charges: Rs. 100.

4. Sharekhan Demat Account Charges for Buying Shares: 0.02% ,

Minimum Rs. 15.

5. Sharekhan Demat Account Charges for Selling Shares: 0.04%,

Minimum Rs. 15.

6. Sharekhan Dematerialization Charges: Rs. 3 per certificate or Rs

15 per request, whichever is higher.

7. Sharekhan Rematerialization Charges: Rs. 25 per certificate of

0.12% of the value of the securities, whichever is higher.

8. Sharekhan Demat Account Custody Fee: NIL

9. Charges for Requests to freeze or defreeze Sharekhan Demat

Account: Rs. 25 per request.

Sharekhan offers two types of online trading Accounts suited to

different investor needs.

Sharekhan Classic Trade - Website Based trading, suitable for long

term investors who do not worry about stock price fluctuations

minute-by-minute. Sharekhan Classic Trade is not suitable for

Intraday traders.

Sharekhan Tiger Trade - Terminal based trading, especially suited for

intraday traders

The brokerage charged by Sharekhan is negotiable and if you

are going to trade heavily do negotiate with Sharekhan for a good brokerage

deal.

Sharekhan Brokerage Charges are not too-high nor too-low and

comparable with other online brokers like SBICAP Securities, Motilal Oswal,

etc.

Below is a typical range of brokerage charged by Sharekhan.

1. Sharekhan Brokerage for Delivery Trades: 0.30% to 0.50 %

2. Sharekhan Brokerage for Intraday Trades: 0.03% to 0.05%

Apart from the above brokerage, remember there will always be

an additional charge of STT (Securities Transaction Tax) of 0.02% and

Service tax of 12% on the brokerage charged (not on the buy or sell

amount).

Sharekhan Trading Account is excellent if you want to start

your investing adventure.

There may be a few negative reviews about Sharekhan like any

other online broker, but since this one of the most renowned and biggest

brokerage house in India, there are no instances of fraud or cheating

4 Process for dematerialisation of shares and transfer of

shares

The complete process of dematerialisation is outlined below

•Surrender certificates for dematerialisation to your depositor

participant.

•Depository participant intimates Depository of the request

through the system.

•Depository participant submits the certificates to the registrar

of the Issuer Company.

•Registrar confirms the dematerialisation request from

depository.

•After dematerialising the certificates, Registrar updates

accounts and informs depository of the completion of dematerialisation.

•Depository updates its accounts and informs the depository

participant.

•Depository participant updates the demat account of the

investor.

A comparison of the fees charged by different DPs is detailed below.

But there are three distinct advantages of having a demat account

with a bank — quick processing, accessibility and online transaction.

Generally, banks credit your demat account with shares in case of

purchase, or credit your savings accounts with the proceeds of a sale on the

third day.

Banks are also advantageous because of the number of branches they

have.

Some banks give the option of opening a demat account in any

branch, while others restrict themselves to a select set of branches.

Some private banks also provide online access to the demat account.

So, you can check on your holdings, transactions and status of

requests through the net banking facility. A broker who acts as a DP may not

be able to provide these services.

4.2 TRANSFER OF SHARES

To transfer shares, one need to fill the Depository Instruction Slip

Book (DIS).

Firstly we need to check, whether both Demat account's Depository

Participant is same or not(CDSL or NSDL) If both of them are different,

then we need an INTER Depository Slip (Inter DIS).

If they are same, then we need INTRA Depository Slip (Intra DIS).

For example: If we have one Demat account with CDSL and other Demat

account with NSDL, then we need an Inter DIS.

Generally, brokers issue Intra DIS. Once we identify the correct DIS,

fill the relevant information like scrip name, INE number, quantity in words

and figures and submit that DIS for the transfer to the broker with

signatures.

The transferor broker shall accept that DIS in duplicate and

acknowledge receipt of DIS on duplicate copy.

Do try to submit that DIS when market is on. Accordingly, date

of submission of DIS and date of execution of DIS can be same or a

difference of one day is also acceptable

DIS is almost like a cheque book. Accordingly, it can be

misused if issued blank. So deposit only a completely filled in Slip to

broker. Do cut out unfilled rows so that none can fill them later on.

5 Trading & Settlement Procedure

BSE, the oldest Stock Exchange of Asia,, had an open

outcry trading system till March 1995 where member-brokers used to

assemble in a trading ring for doing transactions in securities.

It had switched over to a fully automated computerized mode of

trading known as BOLT (BSE on Line Trading) System w.e.f. March 14,

1995.

Through the BOLT system, the member-brokers now enter

orders for purchase or sell of securities from Trader Work Stations (TWSs)

installed in their offices instead of assembling in the trading ring.

This system, which was initially both order and quote driven, is

currently only order driven. The facility of placing of quotes has been

discontinued W.E.F, August 13, 2001 in view of lack of market interest and

to improve system-matching efficiency.

The system, which is now only order driven, facilitates more

efficient in-putting, processing, automatic matching and faster execution of

orders in a transparent manner.

Compulsory Rolling Settlement (CRS) Segment

In order to bring about settlement efficiency and reduce

settlement risk, the Group of 30 (commonly known as G-30) had

recommended in 1989 that all secondary market across the globe should

adopt a rolling Settlement cycle on T+3 basis by 1992, i.e., the trades should

be settled by delivery of securities and payment of monies on third business

days after the trade day.

With a view to implement the above recommendations,

introduce the best international practices and to achieve higher settlement

efficiency, trades in all the equity shares listed on the Exchange in CRS

Segment, as mandated by SEBI, were required to be settled initially on T+5

basis W.E.F December 31, 2001.

As per the directive by SEBI, all transactions in all groups of

securities in the Equity Segment and Fixed Income securities listed on the

Exchange were required to be settled on T+3 basis W.E.F. April 1, 2002.

Further, as per the mandate received from SEBI, the Exchange has since

introduced the settlements for all groups of securities in the Equity Segment,

"F" & "G" groups on T+2 basis W.E.F. from April 1, 2003.

Under a rolling settlement environment, the trades done on a

particular day are settled after a given number of business days rather than

settling all trades done during an 'account period' of a week or fortnight.

A T+3 settlement cycle means that the final settlement of transactions

done on T, i.e., trade day by exchange of monies and securities between the

buyers and sellers respectively occurs on third business day after the trade

day.

The transactions in securities of companies which have made

arrangements for dematerialization of their securities are settled only in

demat mode on T+2 on net basis, i.e., buy and sell positions of a member-

broker in the same scrip are netted and the net quantity and value is required

to be settled. However, transactions in securities of companies, which are in

"Z" group or have been placed under "trade to trade" by the Exchange as a

surveillance measure, are settled only on a gross basis and the facility of

netting of buy and sell transactions in such scrips is not available.

For example, if a member-broker buys and sells 100 shares of a

company on the same day which is in "Z" group or on "trade to trade" basis,

the two positions are not netted and the member-broker has to first deliver

100 shares at the time of pay-in of securities and then receive 100 shares at

the time of pay-out of securities on the same day. Thus, if one fails to deliver

the securities sold at the time of pay-in, it is treated as a shortage and the

relevant quantity is auctioned/ closed-out by the Exchange.

6 DEMAT ACCOUNT OPENING COST AND OTHER

CHARGES

The cost of opening and holding a Demat account. There are

four major charges usually levied on a Demat account: Account opening

fee, annual maintenance fee, custodian fee and transaction fee. All the

charges vary from DP to DP.

Depending on the DP, there may or may not be an opening

account fee. Private banks, such as ICICI Bank, HDFC bank and UTI bank,

do not have it. However, players such as Karvy Consultants and the State

Bank of India charge it.

But most players levy this when you re-open a Demat account,

though the Stock Holding Corporation offers a lifetime account opening fee,

which allows you to hold on to your Demat account over a long period. This

fee is refundable.

Annual maintenance fee: This is also known as folio

maintenance charges, and is generally levied in advance.

Custodian fee: This fee is charged monthly and depends on the

number of securities (international securities identification numbers – ISIN)

held in the account. It generally ranges between Rs. 0.5 to Rs. 1 per ISIN per

month.

DPs will not charge custody fee for ISIN on which the

companies have paid one-time custody charges to the depository.

Transaction fee: The transaction fee is charged for

crediting/debiting securities to and from the account on a monthly basis.

While some DPs, such as SBI, charge a flat fee per transaction, HDFC Bank

and ICICI Bank peg the fee to he transaction value, subject to a minimum

amount.

The fee also differs based on the kind of transaction (buying or

selling). Some DPs charge only for debiting the securities while others

charge for both. The DPs also charge if your instruction to buy/sell fails or is

rejected.

In addition, service tax is also charged by the DPs.

  Things you should look for while going in for a demat account:

1. Annual Fee: Nearly all the demat account provider charge some

fixed yearly fees.

2. Commission: Commission on buy as well as sell. Each transaction

either buy or sell attract commission from your broker. This is generally

some %age of the transaction value.

3. Online trading account: Check if the company provides an online

trading facility. Most sites work well with Internet Explorer that is

shipped with any version of Microsoft Windows. Most of them

doesn’t work with other browsers like Mozilla Firefox, Apple’s

Safari.

4. Research content: Almost all the big player give daily

recommendations of buy or sell to its members.

Demat Account Opening fees

Few banks will not charge you the demat account opening fees,

but there is some annual maintenance charges as well as transaction charges

on Demat account

Custodian chareges -Custodian fees depends on the number of securities

and this fees is charged monthly (international securities identification

numbers — ISIN) held in the account. It generally ranges between Rs 0.5

DPs will not charge custody fee for ISIN on which the companies have paid

one-time custody charges to the depository.

Transaction

On a monthly basis transaction fees is charges for crediting/debiting

securities from the account. The fee also based on the kind of transaction

(buying or selling). Some DPs charge only for debiting the securities while

others charge for both. The DPs also charge if your instruction to buy/sell

fails or is rejected. In addition, service tax is also charged by the Dps.

7 Brokerage rate of different broker

Here are some top demat/trading account providers including India

Infoline.

The info is given in the following order

Name Account

opening

Charge

Annual

maintenance

Charge

Brokerage

for Delivery

Brokerage for

Intra Day

Reliance

Money

750 200 0.01% 0.01%

Geojit BNP

Paribas

650 300 0.30% 0.03%

Religare 500 250 0.30% 0.06%

Canmoney 200 200 0.35% Buy=free Sell

= 0.05%

Angel

Broking

775 300 0.50% 0.10%

India Infoline 555 280 0.50% 0.10%

Kotak

Securities

750 400 Buy = free

Sell = 0.4%

0.06%

Sharekhan 750 300 0.5% 0.1%

HDFC

Securities

799 560 0.5% 0.1%

ICICI Direct 975 500 0.75% 0.05%

Broker: KotakSecurities

Probably one of the oldest player in the field. Their main

strength lies in the research content that they provide to their users.

Account opening charges are about Rs. 750 you also get a zero

balance kotak mahindra bank account with it.

Brokerage for a low volume trader at 0.59 % is quite high as

compared to most of its peers.

There is also a deliver charge of Rs 23 for every delivery based

selling.

Brokerage for intraday transaction is 0.06%.

The trading interface is quite powerful but is geekish. You need

to know a lot of terms of trading to effectively do online trading.

Account opening charges are Rs 2250. Commission is 0.75% for both buying and selling with a minimum of Rs 100 Rs 500 is account opening charges. Brokerages are about 0.3% for delivery based trade and 0.03% for margin trading.

Any individual or corporate can open a demat account. It is

possible to open more than one demat account in identical names.

A demat account can be opened in more than one names but

can be operated only for dematerialization of shares held in the same

combination.

No shares can be credited by purchase or transferred from any

other account.

7 HISTORY OF E TRADING

1918

Dec 31, 2006 - SEBI today extended the deadline for

mandatory requirement of Permanent Account Number (PAN) for demat

account holders to December 31, 2006.

2007

Jan 2007 - In January 2007, it became mandatory for any

person holding a demat account to possess a permanent account number

(PAN).

2009

Nov 30, 2009 - The MFSS platform which was launched on

November 30, 2009 is a gateway where investors can buy and sell mutual

fund schemes online, and the payments for which will be directly debited

from their bank accounts. The units purchased or sold will be credited In the

demat account

2010

Mar 26, 2010 - The stock fell below the follow-on public offer

(FPO) price of Rs 300. NMDC has credited shares issued in the recently

concluded FPO to demat account of the successful allottees on Friday, 26

March 2010.

The history of e-trading began in 1983, when a doctor in

Michigan placed the first online trade using E*TRADE technology. What

began with a single click over 16 years ago has now taken the world by

storm.

The concept was visualized by one Bill Porter, a physicist and

inventor with more than a dozen patents to his credit, who provided online

quotes and trading services to Fidelity, Charles Schwab, and Quick & Reilly.

This led Bill to wonder why, as an individual investor, he had to pay

a broker hundreds of dollars for stock transactions.

With incredible foresight, he saw the solution at hand: Someday,

everyone would own computers and invest through them with unprecedented

efficiency and control.

And today his dream has become a reality. e trading has become a

way of investing in the developed world and is soon catching on in

developing countries too.

Imagine a scenario where you log on to your account, get the live

quotes of scrips you are interested in, get advise from experts and research

reports on your investment choice and then just click the mouse to place

your order, pay the amount due (which automatically gets debited into your

account with the on line brokerage firm), get your account statement, and the

delivery of your shares into your DeMat account.

All this through just the click of a mouse. Seems like a dream? But

with online trading this has become a reality.

Sitting in ones own home or office or even from your car , as long as

you can access the net, you can trade on the market.

There are three basic things needed for e-trading, a bank account, a D-

Mat account and a brokerage account.

The steps in e-trading replicate the real life situation and are fairly

simple to follow.

Once these three accounts are opened, the money and shares are

transferred to your bank and demat account automatically, electronically and

without any paper work.

The first step is of course to open an account. One can open multiple

accounts with himself or herself as the first name in the account.

Then it is necessary to determine the type of account that you want

and how you want to pay for the trades you make.

Joint accounts are allowed but for that you will need to have certain

information about those people. Accounts can be Individual, Joint, Sole

Proprietorship, Corporate, or Partnership etc.

The form filling requires simple personal details like Full legal name,

Citizenship status, Residency status, employer's name and address, your

passport\PAN number, Date of birth etc.

One can download the forms or request for them by post or even

request for a representative of the firm to come over to help you with the

form.

Post-submitting, you are allotted a USER ID and PASSWORD while

giving details for registration. Then an Account Reference Number is

generated and displayed to you.

These three things are unique to an individual and ensure security of

transactions. The acceptance of the application is communicated by email.

Once you have got your USER ID and PASSWORD and your account

has been set up, you can access the website and login using the same.

The second step is then to Fund Your Account. In order to start

trading online it is important that you deposit money in your bank account

before placing a buy order.

In order to place a sell order you must have shares in your DEMAT

Account. You can sell your shares anytime as long as shares are there in

your DEMAT Account. In order to place a buy order you need to fund your

account. You can do this by depositing money in your bank account or else

you can sell some shares existing in your demat account and use the

proceeds of sale to fund your purchase transaction.

The amount of money required before placing a buy order would

depend on the value of order and the type of e-invest account you have

enrolled for - whether cash or margin.

In a Margin account one can use a line of credit to buy marginable

securities or for overdraft protection.

Such an account is opened after taking into consideration Annual

income, Net worth, description of your investment objectives, as it involves

lending a line of credit. In a cash account, the amount of securities bought

has to be backed by the cash in the account.

Then comes placing the order. For this you enter your Trading

password and go to trade.

From the Trading tab, select Enter Order under the Stocks heading.

Select a transaction type: Buy, Sell. At 'Number of Shares', type the number

of shares that you want to buy. At 'Stock Symbol or Name(s)', type the stock

symbol.

If you don't know the symbol click 'Find Symbol', type the company

name, click 'Search' and click the symbol that you want from the list. For a

market order, select 'Market'. Otherwise, select 'Limit', 'Stop' or 'Stop Limit'

and enter the price. 'Market Order': you just ask the broker to buy or sell

your stocks at the best price available.

'Limit Order': you tell the broker to trade only when the stock hits a

certain price or better. 'Stop Order': you tell the broker to sell your shares if

the stock drops below a certain price. Select either 'Good for Day' or 'Good

Until Canceled'. If you want to place an 'All-or-None' order, click 'All or

None'.

Type your trading password and click 'Preview Order'. If you want to

change your order, click 'Cancel' and make your changes.

To see if your order has been executed and filled as you expect, check your

account balance.

The 'Account Balances' page shows your account equity (the value of

your account) and your buying power. To check your account balance, click

the 'Accounts Services' tab, make sure the correct account number displays

at 'Select Account' and click 'Go'. At 'Total Account Value', see your account

balance.

If an order to buy or sell stock hasn't been executed yet, you might be

able to change or cancel the order.

Orders that you have placed but for which you haven't yet received

execution reports appear when you click 'View Open Orders' under the

'Stocks' heading of the 'Trading' tab.

To change a stock order from the 'Trading' tab, select 'View Open

Orders', make sure you're currently in the correct account, the click 'Change'

beside the order you want to change.

Enter your change or changes - you can change the quantity, price,

and term. For a new price, select the appropriate option button and then enter

the price (unless you're changing it to a market order).

You cannot change the stock symbol or the transaction type (Buy,

Sell, Sell Short, or Buy to Cover). Enter your trading password and click

'Preview Change Order'. Or, if you want to cancel your changes, click 'Do

Not Change'.

In order to cancel a stock order, from the 'Trading' tab, select 'View

Open Orders' under the 'Stocks' heading. Make sure you're currently in the

correct account. Click 'Cancel' beside the order you want to cancel. Review

the information presented to make sure this is the order you want to cancel.

Click 'Cancel Order'. Enter the symbol or the name of the scrip, press "GO"

or the relevant button.

The account opening charge, commission rates and the minimum limit

of transaction vary from site to site. Other charges can include Annual

Services Charges, Custody charges, D-Mat account charges etc.

Also most online traders offer a host of other tools to aid the

investment decision. A full research back up in terms of reports, articles,

opinions, etc., live time quotes, latest news on the scrip, technical charts to

see how the stock's price has changed over time.

So sitting at home one can take an investment decision at ease after

having researched and read up fully about the stock. With the advent of

online trading, it would seem that the markets are just a click away.

Please however, do remember that currently in India the handful of

online trading offers are mere order routing systems. But it will not be long

enough before the entire system goes online. That then will be change for

the better.

7.2HOW TO AVAIL ONLINE DEMAT ACCOUNT

Online demat account is one of the most convenient way of trading in

shares.

In this one can buy shares from any place and from anywhere in the

country.

In this there is no need to call broker or to approach broker for buying

or selling shares. In this investor can buy shares or sell shares without the

help of broker.

In this there is just need to avail password from broker and login ID

from stock broker once both these are provided by the broker then one can

buy or sell shares of the company through computer or through laptop even

when investor is out of station just investor need to do put buy or sell order

in the computer .

Investor need to select at what price he has to buy or what rate he has

to sell shares of the company. It is one of the convenient and attractive way

of doing transaction in securities market. For buying investor need to select

bid rate and for selling investor need to select offer rate.

Through online demat acount investor can check high and low price

of the shares and investor can check chart or graph of the company.

Online has now becoming popular as most investors prefer electronic

mode of transactions as it is convenient way of dealing in shares.

8 Allotment of shares through demat account

Allotment of shares is done through electronic mode as even

dividend and even bonus shares is credited in the demat account.

If bonus shares are alloted it will get credit in the demat account

and it will reflect in the system once shares are alloted and if dividend is

declared it gets credit in the demat account or it reflects in the bank account

where details are provided to NSDL and even dividend amount is delievered

to the investor by postal delivery.

NSDL stands for national securities and ddepository limited

and CDSL stands for Central securities depository limited. All transactions

in BSE and NSE are routed through CDSL and NSDL. It is one of the

largest depository in India.

Thus demat account is most conventient way of trading in

shares as it is routed through electronic mode .

For example if company has announce bonus shares in the ratio

of 1 to 1 then bonus shares and existing hoding will be equal and this shares

gets credited in the demat account and if dividend is declared if one has

opted for E.C.S then it will directly get credited in the demat account or it

also get credited in the demat account.

Thus demat account is considered to be easiest way of

operating demat account as it is risk free from fraud , manipulation and there

is no possibility of making fake certificate as there is

no physical share certificate and shares are credited in the demat account

For Example investor applies for investing in I.P.O then once

shares are alloted it will get credit in demat account and physical certificate

will be there as investment is routed through electronic transaction.

An applicant has the option to seek allotment of equity shares in

electronic or physical mode. An applicant wishing to apply opened to

facilitate trading and settlement of demat shares in the stock exchanges

connected to NSDL.

As on October 31, 2000 1,932 companies signed agreements with

NSDL.

The demat account is necessary to buy shares. The shares will

not given physically. It will be credited in your demat account.

It is easy to buy or sell shares through demat account. Most of

the transactions are being done through demat account.

You may open it in nationalized bank, private bank and even

from foreign bank

Investors are eligible for bonus shares and dividend if they are

holding shares in physical mode or through demat account. if it is demat

account it will directly get credit in demat account

Whenever you apply for shares like in IPO etc, Demat account is

mandatory. If you are allotted any shares, it will automatically be

credited in your Demat account. Similarly, if you buy shares, no

physical certificates are issued nowadays, it will reflect in your Demat

account. Same process is for selling. Pan card is mandatory for

opening of Demat account.

Demat account allows you to buy, sell and transact shares

without the endless paperwork and delays. It is also safe, secure and

convenient. Demat refers to a dematerialised bank account where actual

money is replaced by shares. You have to approach the DPs remember, they

are like bank branches, to open your demat account. Lets say your portfolio

of shares looks like 1000 shares of GMR infra it will directly reflect in my

demat account

instruction for debt instrument. Redemption date: On redemption, the

ISIN associated with the instrument is ed-activated in the NSDL

system. Allotment in Demat Form Any new instrument can be issued

directly. An Issuer may offer demat facility for its debt instruments by

sending a request to NSDL detailing the type of instrument, along

with a Letter of Intent. On receipt of the request, a tripartite

15 days from the closure of the IPO. The shares should get

credited to the respective bidders de-mat account within two working days

from the date of allotment. The refund orders are also dispatched, the offer

must be open for at least three days. The BRLM declares the issue price

before the allotment, which must be completed within 15 days from the

closure of the IPO. The shares should get credited

Once a demat account has been started, it is not possible to

change the account name.

In such case a new demat account needs to be opened in the

changed name, securities are to be transferred from the old account to the

new account and the old account needs to be closed.

Even though a power of Attorney holder cannot open a demat

account, it is permissible to be operated by both the client and the Proof Of

Address (P.O.A) of account holder.

The different categories of accounts that can be opened under

an individual demat account are Ordinary Resident, Hindu United Family

(HUF), Non Resident Indian - Repatriable, Non Resident Indian- Non

Repatriable, Margin , Promoter, Others.

The different categories of accounts that can be opened under a

corporate demat account are Body Corporate, Bank, Financial Institution,

Foreign Institutional Investor, Overseas Corporate Body & Others.

Depositories and Depositary Participants :

For a tyro stock trader, it is necessary to be aware about the

terms Depositary and Depositary Participants.

A depository is a place where the stocks of investors are held in

electronic form. There is only two depositories in India, The National

Securities Depository Ltd (NSDL) and the Central Depository Services Ltd

(CDSL).

Under the arrangement, the Depository acts as registered owner

of the securities in electronic form in the books of issuing company and the

client will be the beneficial owner.

The Depositary Participants are the agents governed by Depositories

through which one can operate the demat account. Depository participants

are mainly banks and brokers. There are over a 100 DPs in India.

A comparison of the fees charged by different DPs is detailed below.

But there are three distinct advantages of having a demat

account with a bank — quick processing, accessibility and online

transaction.

Generally, banks credit your demat account with shares in case

of purchase, or credit your savings accounts with the proceeds of a sale on

the third day.

Banks are also advantageous because of the number of

branches they have. Some banks give the option of opening a demat account

in any branch, while others restrict themselves to a select set of branches.

Some private banks also provide online access to the demat account.

So, you can check on your holdings, transactions and status of requests

through the net banking facility.

A broker who acts as a DP may not be able to provide these services.

9 Procedure to close demat account

For closing demat account investors need to fill account closing

form. Under closing of demat account investors can transfer shares through

other broker or transferring shares on any other names.

Investors can sell shares and then can collect balance amount

cheque. For closing demat account he should have positive networth and

should not have negative networth.

If he or she has negative netwoth then he or she has to make cheque

in the favour of the broker and then only she can close demat account.

After closure of demat account investors cannot trade or buy or

sell shares and balance amount will be credited in the customers account.

Normally nowdays different broker provides customised services to

the reatil investor and to high networth investor.

Nowdays broker provides cheaper brokerage to the retail investor

and to high networth investor so they do not opt for closure of demat

account.

Broker also provides stock trading tips to the investor whenever they

feel it is worth putting money in it and they also provide stock details to the

investor through postal delievery of statements to the investor whenever any

transaction is done in the account by the investors.

Broker also provides SMS facility to the investor whenever they buy

or sell shares as to avoid unauthorised trade practices.

These are the attractive schemes provided by the broker to the

investors so that they do not close the demat account.

10 Why investor close demat acount ?

Investor can close demat account as per his or her wish if investor is

not satisfied with the service or brokerage provided by the broker.

Normally reasons for closing demat accounts are closed by the

investor on account of frequent loss on investment or trading activity , less

reliable trading tips provided by the stock broker , high brokerage rate, no

exposure towards shares by way of loan against securities , less personal

attention towards account holder and investor normally close account due to

high volatility of the market.

It is always advisable that trading in equity or in risky assets should be

done with due care and diligence and one must risk factor or one should

evaluate risk in the investment for avoiding trouble and inestment should be

done with due discipline