Commerce

In a 'demat account' ,shares and securities are held electronically instead of the investor taking physical possession of certificates. A demat account is opened by the investor while registering with an investment broker (or sub-broker). The demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a demat account for the purpose of transacting shares.
Access to the demat account requires an internet password and a transaction password. Transfers or purchases of securitiescan then be initiated. Purchases and sales of securities on the demat account are automatically made once transactions are confirmed and completed.
-------------------------------------------------
Advantages of demat
A demat account also helps avoid problems typically associated with physical share certificates, for example: delivery failures caused by signature mismatch, postal delays and loss of certificate during transit. Further, it eliminates the risks associated with forgery and due to damaged stock certificates. Demat account holders also avoid stamp duty (as against 0.5 per cent payable on physical shares) and filling up of transfer deeds.In India it is coming gradually.
-------------------------------------------------
Goal of Demats System
India adopted the Demat System for electronic storing, wherein shares and securities are represented and maintained electronically, thus eliminating the troubles associated with paper shares. After the introduction of the depository system by the Depository Act of 1996, the process for sales, purchases and transfers of shares became significantly easier and most of the risks associated with paper certificates were mitigated.
-------------------------------------------------
Demat benefits [edit]
The benefits of demat are enumerated[by whom?] as follows: * Easy and convenient way to hold securities * Immediate transfer of securities * No stamp duty on