Synopsis - Demat & Online Trading
A STUDY ON DEMAT AND ONLINE TRADING IN
SECONDARY MARKET
INTRODUCTION
Introduction of DMAT and net trading has revolutionized the Capital market. Internet Trading has made the process of buying and selling of shares much faster and easier than physical brokers. It provides integration of Bank, Broker, Stock exchange and depository participants. This eliminates the rigorous process of investing in stock exchange.
Online Trading has given customer a real time access to account information, stock quotes, elaborated market research and interactive trading.
DEMATERIALISED TRADING
Dematerialisation or "Demat" is a process whereby the investors securities like shares, debentures etc, are converted into electronic data and stored in computers by a Depository. Securities registered in the investors name are surrendered to depository participant (DP) and these are sent to the respective companies who will cancel them after "Dematerialisation" and credit investor’s depository account with the DP. Depository functions like a securities bank, where the Dematerialised physical securities are traded and held in custody. This facilitates faster, risk free and low cost settlement. Depository is much like a bank and performs many activities that are similar to a bank.
DEPOSITORY SERVICES IN INDIA India has two depository service providers. The National Securities Depository Limited (NSDL) was incorporated on 8th November 1996, and The Central Depository Services Limited (CSDL) was incorporated in 1996 as the second depository, to provide depository services to the investors.
The depositories are required to operate within the legal framework of: • Depository Act 1996 • SEBI (Depository and Participants) Regulation, 1996 • SEBI’s guidelines issued from time to time • Bye-laws • Business Rules The bye-law and business rules are designed by the depository based on the above to govern its functioning and
SECONDARY MARKET
INTRODUCTION
Introduction of DMAT and net trading has revolutionized the Capital market. Internet Trading has made the process of buying and selling of shares much faster and easier than physical brokers. It provides integration of Bank, Broker, Stock exchange and depository participants. This eliminates the rigorous process of investing in stock exchange.
Online Trading has given customer a real time access to account information, stock quotes, elaborated market research and interactive trading.
DEMATERIALISED TRADING
Dematerialisation or "Demat" is a process whereby the investors securities like shares, debentures etc, are converted into electronic data and stored in computers by a Depository. Securities registered in the investors name are surrendered to depository participant (DP) and these are sent to the respective companies who will cancel them after "Dematerialisation" and credit investor’s depository account with the DP. Depository functions like a securities bank, where the Dematerialised physical securities are traded and held in custody. This facilitates faster, risk free and low cost settlement. Depository is much like a bank and performs many activities that are similar to a bank.
DEPOSITORY SERVICES IN INDIA India has two depository service providers. The National Securities Depository Limited (NSDL) was incorporated on 8th November 1996, and The Central Depository Services Limited (CSDL) was incorporated in 1996 as the second depository, to provide depository services to the investors.
The depositories are required to operate within the legal framework of: • Depository Act 1996 • SEBI (Depository and Participants) Regulation, 1996 • SEBI’s guidelines issued from time to time • Bye-laws • Business Rules The bye-law and business rules are designed by the depository based on the above to govern its functioning and
Bibliography: WEBSITES 1. www.google.com BOOKS 1. IM Pandey, Financial Management, 9th Edition, 2006, Vikas Publishing House Pvt. Ltd. 2. Prassana Chandra, Financial Management, 6th Edition, Tata McGraw- Hill Publishing Company Ltd. ANNEXURE ' Questionnaire