PROJECT REPORT

ON

“A study on awareness and accessing

Behavior of Demat Account in Pune”

Prepared for

Unicon Securities Pvt. Ltd.

Submitted to ISCS, Pune In partial fulfillment of the requirement of PGP

Program

Submitted by

Rahul Jain

PGP 2009-11

INDIRA SCHOOL OF CAREER STUDIES

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 CERTIFICATE

This is to certify that Mr. Rahul Jain has successfully completed his two months
project titled “A Study Of awareness and accessing behviour of Demat Account in
Pune ” at Unicon Securities Pvt. Ltd., Pune during the academic year 2009- 2011 in
partial fulfillment of the requirement of PGP at Indira School Of Career Studies,
Wakad, Pune.

Prof. P.K.Divakaran Internal Guide

Executive Director Prof. J.P.Singh

ISCS, Wakad, Pune

2
 DECLARATION

This is to certify that the project report is entitled in “A Study Of awareness and
accessing behviour of Demat Account in Pune ” is submited to ISCS, Wakad in
partial fulfillment of the requirement for the degree of PGP + MBA (SMU), is an
original work .The matter embodied in this project is a genuine work done by me and
has not been submitted whether to this university or any other university /institute for
the fulfillment of the requirement of any course of study.

I guarantee that this project report has not been submitted for the awards to any other
university for degree, diploma or any other such prizes.

Date:- Rahul Jain

Place:- Signature:

3
 ACKNOWLEDGEMENT

It is my pleasure to be indebted to various people, who directly or indirectly

contributed in the development of this work and who influenced my thinking,
behavior, and acts during the course of study.

I express my sincere gratitude to Mr. Ritesh Rajebhosale (Branch Manager)

, worthy Principal for providing me an opportunity to undergo summer training at
Unicon Securities Pvt. Ltd.

I am thankful to Miss Deepika Sharma, Relationship Manager-Equity offline of

Unicon Securities for his support, cooperation, and motivation provided to me during
the training for constant inspiration, presence and blessings.

I also extend my sincere appreciation to Prof. J.P. Singh who provided their
valuable suggestions and precious time in accomplishing my project report.

Lastly, I would like to thank the almighty and my parents for their moral support and
my friends with whom I shared my day-to-day experience and received lots of
suggestion that improved my quality of work.

(Rahul Jain)

4
 INDEX

S.No. Particulars Page No.

1 EXECUTIVE SUMMARY 6

2 OBJECTIVES OF THE STUDY 8

3 COMPANY PROFILE OF UNICON SECURITIES PVT. LTD. 9

4 INTRODUCTION TO DEMAT ACCOUNT 24

5 STUDY OF “DEMAT ACCOUNT PROCEDURE” 36

6 RESEARCH METHODOLOGY 52

7 DATA ANALYSIS & INTERPRETATIONS 56

8 LIMITATIONS OF THE STUDY 65

9 SUGGESTIONS AND RECOMMENDATIONS 66

10 BIBLIOGRAPHY 67

11 ANNEXTURE 68

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 EXECUTIVE SUMMARY

The Indian capital markets have seen a lot of economic swing since last decade but
still it has been flourishing with rapid transformations. Reforms are continuing and
are bringing a lot of change in structure, process and governance of capital market.
This is helping Indian capital market to gain an image of mature market place in the
capital markets of the world. The working mechanisms are now more flexible and
transparent. The stock exchange has been corporatized too. Other than this new
instruments like index future, index options, derivatives etc. has been introduced.

Out of the major players showing their presence in the financial markets,
Unicon Securities Pvt. Ltd. is one of India's fastest growing private sector financial
services companies; it is a one-stop-shop, providing end-to-end financial solutions
including web-based services. It has the largest non-banking distribution channel with
over 900 Business offices in 235 cities and 2,00,000 clients across the country.

The objectives of the research were to create awareness about various products and
services of the Unicon Securities Pvt. Ltd. and to know about the investor behaviour
and their preferences towards investment decisions and considerations. Other than
this, the research included the study of position of Unicon Securities Pvt. Ltd in the
market and its comparative position with other players.
Descriptive research was used in the whole project. The data was collected through
meeting investors and potential investors in various areas of Pune and questionnaires
were filled on the basis of their responses. The collected data was analyzed using
percentage method.

Various findings were derived which revealed perception and behaviour of investors
and potential investors toward financial market. Other than this, the attitudes of
investors were also observed towards Unicon Securities Pvt. Ltd. Unicon based upon
the findings, various suggestions were given with a view to improve the Position of
Unicon Securities Pvt. Ltd. in the market.

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As a result of research, it was concluded that Unicon Securities Pvt. Ltd has a good
brand image to the existing clients, but it still has to work upon in various areas to
excel in the financial sector.

This report is structural as well as procedural study about the extent of flexibility and
transparency present inside the framework of financial industry.
Organization is constantly changing. These changes often result from events which
alter the establishment status in some way such as the introduction of new technology
process changes organization merges or restructuring.

Unicon Securities Pvt. Ltd in its span of seven years has undergone many innovations
whether it is in its field of technologies or whether it is customer satisfaction. In this
period of our training I have learnt all the operations done by Unicon Securities Pvt.
Ltd i.e. opening of DEMAT account, filling forms, verification of the form,
rectification of the form, checking the status of the clients, handling the queries of the
customers, gaining knowledge about the various products of other companies for
which Unicon Securities Pvt. Ltd is doing cross-marketing like IPO, Commodities,
Derivatives, etc.
During my project I also came to know about the customer service which the
company provides to its customers. As far as data collection is concerned we have
both primary as well as secondary data in this report. I have collected primary data by
interactive sessions with the working officials of the company and secondary data are
collected which are more qualitative in nature from the manuals, internet, corporate
articles and other preserved data by the company.

This project has been a great learning experience for me; at the same time it gave me
enough scope to implement my analytical ability. The first part gives an insight about
the Demat Account, IPO and mutual funds and their various aspects. It is purely
based on whatever Unicon Securities Pvt. Ltd.

All the quarries of the customer asked by them had been solved with the support of
the seniors in the organization. The problems of the customer were being recorded for
the purpose of the research and development.

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 OBJECTIVE OF THE STUDY

• The main objective of the study is to know about the potential of the market
regarding people’s dealing in share market.

• To know the role of DEMAT ACCOUNT .

• To know the procedure of opening DEMAT ACCOUNT.

• The objective is to know that how many people in the city are aware of the
UNICON SECURITIES PVT. LTD.

• To know where people have already opened their demat a/c and on what basis.

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 COMPANY’S PROFILE

 INTRODUCTION TO UNICON SECURITIES PVT. LTD.S

 MISSION AND VISION

 MANAGEMENT TEAM

 PRODUCTS AND SERVICES OFFERED BY UNICON

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 INTRODUCTION TO UNICON

Unicon has been founded with the aim of providing world class investing experience
to hitherto underserved investor community. The technology today has made it
possible to reach out to the last person in the financial market and give him the same
level of service which was available to only the selected few.

Unicon gives personalized premium service with reasonable commission on the NSE,
BSE & DERVATIVES market through their equity broking arm Unicon Securities
private ltd. and commodities on NCDEX and MCX through their Unicon
Commodities Pvt Ltd. With their sophisticated technology we can trade through our
own computer and if we want human touch we can also deal through our relationships
managers out of more than 100 branches.

Unicon also give personalized services on insurance (Life and General)

&Investments ( Mutual funds & IPO’S ) needs through their Insurance & Investment
distribution arm Unicon Insurance Advisors Pvt. Ltd. Their tailormade customized
solutions are perfect match to different financial objectives. Their distribution
network is backed by in house back office support to serve their customers promptly

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 MISSION AND VISION OF UNICON INVESTMENT SOLUTIONS

MISSION:

To create long term value by empowering individual investors through superior

financial services supported by culture based on highest level of team work,
efficiency and integrity

VISION:

To provide the most useful and ethical investment solutions guided by values driven
approach to growth, client service and development

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 MANAGEMENT TEAM OF UNICON SECURITIES PVT. LTD.S

Founder& CEO: Mr. Gajender Nagpal

Mr Nagpal with his dynamic leadership brings vision to the company. A management
graduate by qualification, Mr. Nagpal brings with him over 14 years of experience in
the stock market. Before joining Unicon he has served at senior positions for 5 years
with Kotak securities at a regional level and Indiabulls securities for 4 years at
national level assignments. Mr. Nagpal brings with him the rich experience of
building a retail broking network.
He is a familiar face on the electronic media and is well respected in the broking
industry for his stock market expertise.

Co-Founder& President: Mr. Ram M Gupta

Mr. Gupta through his aggression and dynamism brings energy to the team. He has 8
years of stock market experience behind him and is responsible for driving the sales
team. Mr. Gupta has held senior level postions in Karvy stock broking and Indiabulls
Securities. Mr. Gupta is supported by a team of over 850 relationship mangers spread
over 89 locations across the country

Chief Operating Officer: Mr. Sandeep Arora

Mr. Sandeep Arora brings with him over 11 years of experience of managing
operations of stock broking company. Mr. Sandeep Arora before taking over as head
of operations at Unicon was responsible for managing the operations of Indiabulls
Securities Ltd. Mr. Sandeep Arora is supported by his team of over 400 people
helping him to give world class service to the clients.

Chief Financial Officer: Mr. Vikas Mallan

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Mr Mallan A Chartered Accountant, Company Secretary and Cost Accountant by
profession. Mr. Mallan has over 14 years of experience in the area of finance. Before
joining Unicon he has served at senior level positions with Rediff.com, Reliance
Telecom and Koshika Telecom. His experience includes a Nasdaq listing of an Indian
internet company and Head of Finance of a leading Law firm. Mr. Mallan is heading
Distribution / Mutual Fund initiative and is supported by around 1100 dedicated
employees nationwide.

Chief Compliance Officer: Ms. Anjali Mukhija

Ms. Anjali Mukhija heads compliance. She brings with her 12 years of experience in
the stock markets. Her current job profile includes broking operations, client relations
& grievance redressal, coupled with Public dealings. Prior to joining Unicon, she was
with the National Stock Exchange, Delhi Regional Office for 10 years and had held
senior position for a brief period in a reputed broking house.

National Head (E-Broking): Mr. Trinadh Kiran

Mr Trinadh Kiran is an MBA marketing professional from Aligarh Muslim

University and has done 10 months research in Capital Markets from IIM-
Ahmedabad. He brings with him a total work experience of 7 years and has worked
with almost all big giants of capital market like India Infoline, India Bulls and Net
worth Stock Broking. He is associated with Unicon since June 2005. He has extensive
knowledge of Retail Broking and expertise in E-Broking.

National Head (Business Alliances): Mr. Vijay Chopra

Mr. Vijay Chopra is a management graduate from Indian Institute of Foreign Trade,
New Delhi. He has a illustrious professional track record of spanning over 11 years
wherein he has handled various assignments at a senior levels with some of the best
names in the Consulting, FMCG & healthcare space. His forte has been supply chain
management, New Product Launches, Sales, Marketing, Product management &
Training. Mr. Chopra along with his team handles over 300 business partner network
which is spread over the entire geographical spread of the country.

Head-Priveleged Client Group: Mr. Ashish Kukreja

Mr. Ashish has the responsibility of handling PCG business with Unicon. He brings
with him a wide industry exposure and joined Unicon in July 2006 after rendering his
services to Kotak Securities, where he was taking care of franchisee business and

13
later started handling HNI desk. He is an MBA (finance) from ICFAI Business
School.

Vice President-HR &Training: Ms. Deepa Mohamed

Ms Deepa Mohamed Sqn. Ldr.(Retd). Deepa Mohamed, pioneer as first batch of

women Officer in Indian Air Force is an Electronics & Communications engineer
from Netaji Subhas Institute of Technology (Delhi). She has also undergone
Aeronautical Engineering course from AFTC, Bangalore and Post graduation
specialization in Human Resource Management from XLRI-Jamshedpur. She has 12
years of working experience in personnel management and administration and is
associated with Unicon since September, 2006. She has been instrumental in setting
up Human resource and Training division. She has worked as an OD consultant and
her expertise lies in Organization development and change management.

PRODUCT & SERVICES OFFERED BY UNICON

Unicon deals with a numbers of products & services:

• Equity

• Commodity

• Depository

• Privileged Client Group

• Properties

• Distribution

• NRI Services

• Back Office

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Equity

Unicon offers a unique feature of a single Screen Trading Platform of NSE, BSE &
Derivatives. Unicon offers both Offline & Online trading platforms. You can Walk in
or place your orders through telephone at any of our branch locations

Online Trading Products:

• Unicon plus

• Unicon Swift

Unicon Plus

Browser based trading terminal that can be accessed by a unique ID and password.
This facility is available to all our online customers the moment they get registered
with us.

Unicon Swift

Application based terminal for active traders. It provides better speed, greater
analytical features & priority access to Relationship Managers.

Commodity

Unicon offers a unique feature of a single screen trading platform in MCX and
NCDEX.Unicon offers both Offline & Online trading platforms. You can Walk in or
place your orders through telephone at any of our branch location Online commodity
internet trading platform through uniflex.

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 • Live Market Watch for commodity market (NCDEX, MCX) in one screen

• Add any number of scrips in the Market Watch

• Tick by tick live updation of Intraday chart

• Greater exposure for trading on the margin available

• Common window for market watch and order execution

• Key board driven short cuts for punching orders quicklyon

• Real time updation of exposure and portfolio

• Facility to customize any number of portfolios & watchlists.

• Market depth, i.e. Best 5 bids and offers, updated live for all scripts

• Facility to cancel all pending orders with a single click

• Instant trade confirmations

• Stop-loss feature.

Depository

Unicon depositories services offers dematerialization services as a participant in

Central Depositry Services Limited (CDSL) through its depository operations. The
company believes in efficient and cost-effective and integrated service support to its
brokerage business. Unicon Securities Private Limited, as a depository participant,
will offer depository accounts for individual investors as well as corporates which
will enable them to transact in the dematerialized segment, without any hassles.
Depository offers a safe, convenient way to hold securities as compared to holding
securities in paper form. Our service provides an integrated single platform for all our
clients ensuring a risk free, efficient and prompt depository process.

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 Facilities Offered by Unicon

* De-materialization:

You can submit your physical shares at the Unicon branch for dematerialization into
electronic form.

* Re-materialization:

You can also request for Re-materialization which enables you to convert the
dematerialized shares into physical form.

* Transfer:

Inter and intra depository services are available through which you can transfer
shares.

IPO:

You can apply for IPO using your demat account details and on allotment the
securities are transferred directly to your demat account.

* Corporate Actions:

While holding your stock in demat account, in case you are eligible for any bonus and
rights issues the allotment would be transferred to your demat account.

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* Easi:

You can view your demat account over the Internet and avail a host of services. This
facility empowers our clients to view, download

Priveleged client group

We provide customer focused transparent investment planning and solutions. We

offer products which benefit your special status. PCG has a specialized advisory team
which nurtures all your investment. We ensure that your investments work for you
rather than you for them.

Products offered by unicon

• Unicon Signature Account

• Nifty Tracker

• Unicon Trade Plus

• Stastical Arbitrage

• Unicon Wealth Planner

Properties

Unicon is a specialized property broking company. Our highly experienced and

professional teams present retail, office, industrial and residential property
opportunities to a broad base of clients. Whether it is a residential or commercial
development, Unicon offers a total solution to our clients inclusive of market
research, marketing strategy, interaction with the professional teams and sales or
leasing of the property.

Unicon’s professional team of consultants will assist you to identify suitable premises
that satisfy your requirements. We will help you negotiate favorable leases and assist
with the preparation of all documentation.

“Whether you are looking for a home or a place to conduct business Unicon shall find
you one”

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Distribution

Unicon is fast emerging as a leader in the Insurance and Mutual Funds distribution
space. Unicon has over 100 branches and a huge number of “Business Development
Executives” who help to source and service the
Customers throughout the country. Unicon is fast becoming the preferred “Vendor
Independent” distribution houses because of providing efficient service like free pick-
up of collection of cheques/DD’s, Keeping track of the premiums etc to its customers.

Unicon offers the following distribution products:-

 IPO's

 Mutual Funds

 Insurance

IPO

At Unicon you can invest in the Primary markets (Initial Public Offerings) online
without going through the hassles of filling up any IPO application forms or any other
paperwork.

We shall make sure that you do not miss the opportunity to subscribe/invest in a good
IPO issue by providing you an online IPO
application form, transfer of funds online through secured payment Gateways of
leading banks like ICICI, HDFC, AXIS bank.

19
In addition to the above we shall provide you with the In-Depth analysis of the IPO
issues which shall be hitting the Indian Markets in near future, IPO Calendar, analysis
on the recent IPO listings, prospectus, offer documents and other IPO research reports
so as to help you take an informed decision to invest in the IPO issues.

Online IPO facility is open to all our registered clients at no cost whatsoever. All you
need is the following to subscribe online to the IPO issues

• A trading account with Unicon

• A Demat account with Unicon
• An access to the net banking facility with the Banks through which Unicon
has operational Gateway facility (ICICI, HDFC and AXIS Bank).
• You must have signed a Power of Attorney (POA) agreement for applying in
IPO’s online

Mutual Funds

Unicon Provides expert advice to its clients for their investments in equity & debt
markets through Mutual Funds. Our experts advice you the best investment solutions
that suit you and help you to reach your financial goals.
We help you ascertain your risk profile & guide you with the right product mix which
reduce your tax liability increase your savings & enhance your wealth. Weather you
have a conservative, medium or aggressive investment risk appetite, our experts
would guide you to build a portfolio to optimize the return of interest.

Classification of Mutual Funds

• By structure

1. Open-ended Scheme
2. Close-ended Scheme
3. Interval Schemes

• By Investment objective

1. Growth Schemes
2. Income Schemes
3. Balanced Schemes
4. Money market Schemes

• By Other Schemes

1. Tax saving schemes

2. Special schemes
3. Index Schemes

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Insurance

General Insurance

Unicon offers all products of General Insurance under one umbrella. Unicon
comprises of a team of distinguished professionals from insurance, finance and other
management disciplines who have vast business & managerial experience.

Unicon team evaluates the client's business environment and studies the risk profile
based on the results of these evaluations, Unicon team then suggests the most cost
effective , integrated insurance package that is perfectly suited to the client's risk
profile. Unicon has a nationwide network of branches all over India, equipped with
top quality infrastructure facilities, to provide you prompt & efficient service.

Life Insurance

Unicon offers you a Peace of Mind by offering various life insurance plans for your
unique & specific needs. Our philosophy is that for every financial problem, there is a
solution also. And we are here to give you complete financial solutions. At the same
time we offer you very Prompt & Reliable Policy related service for enduring
relationship. We offer a very wide range of products to fulfill your particular
requirements. You can always have an access to our 83 Branch Offices situated at
prime locations of the city, or you can call our Relationship Manager to guide on your
Investments.

Following is the glimpse of Life Insurance Plans

• Protection Plans

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 • Investment Plans

• Child Plans

• Retirement/Pension Plans

• Saving Plans

• NRI Plans

• Health Plans

NRI Services

With India becoming the epicentre of growth the Global Indian feels the need to be
connected to the domestic growth story.

Unicon now offers a convenient and hassle-free way of Investing in the Indian
Securities Market to the people who are living outside India and wish to participate in
the Indian Growth story.

Procedure for NRI operations in Indian Capital Markets

• The NRI can deal with only one bank at any point of time.

• The NRI He is allowed to invest only 5% of the paid up capital of a company.

The aggregate paid up value of equity of any company purchased by all NRI's
and OCBs cannot exceed 10 percent of the paid up capital of the company and
in the case of convertible debentures, the aggregate paid up value of each
series of debentures purchased by all NRI's and OCBs cannot exceed 10 % of
the paid up value of each series of convertible debentures.

• He can enter only into delivery based trades; all deliveries must only be routed
through beneficiary accounts and not directly through the broker.

• Shares bought by him cannot be sold unless the payout of the same is received
from exchange.

• All purchase and sale transactions have to be reported to the RBI by the
designated bank.

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 • Original brokers contract notes have to be submitted to the designated Bank
branch, within 24 hours of the transaction.

• He will be required to make bill to bill payments/ settlements. No adjustments

of purchase against sale consideration should be done.

• Shares cannot be bought against the shares sold in the same settlement.

• All Purchase and Sales will be dealt separately for payments / receipts.

• Sale proceeds of any transaction not reported/approved by the RBI is allowed

to be credited to the NRE/NRO savings/demat account. The transaction will
have to be reversed in the account and losses if any will be borne by the client.

• All tax liabilities arising out of buying and selling of securities will be handled
by the designated bank.

Back Office

Unicon through its online back-office aims to increase the transparency and provides
you the link to view the details of your account online anytime and anywhere.

Here you have the advantage of viewing the following reports online

• Sauda Details

• Financial Ledger

• Net position for the day

• Net position Detail (for the complete financial year)

• E-Contract Note

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DEMAT ACCOUNT

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 INTRODUCTION

The trading on stock exchanges in India used to take place through open outcry
without use of information technology for immediate matching or recording of trades.
This was time consuming and inefficient. This imposed limits on trading volumes and
efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced
a nation-wide on-line fully automated screen based trading system where a member
can punch into the computer quantities of securities and the prices at which he likes to
transact and the transaction is executed as soon as it finds a matching sale or buy
order from a counter party. Screen based electronic system electronically matches
orders on a strict price/time priority and hence cuts down on time, cost and risk of
error, as well as on fraud resulting in improved operational efficiency. It allows faster
incorporation of price sensitive information into prevailing prices, thus increasing the
informational efficiency of markets. It enables market participants, irrespective of
their geographical locations, to trade with one another simultaneous, improving the
depth and liquidity of the market. It provides full anonymity by accepting orders, big
or small, from members without revealing their identity, thus providing equal access
to everybody. It also provides a perfect audit trial, which helps to resolve disputes by
logging in the trade execution process entirety. The sucked liquidity from other
exchanges and in the very first year of its operation, NSE became the leading stock
exchange in the country, impacting the fortunes of other exchanges and forcing them
to adopt SBTS also. Today India can boast that almost 100% trading take place
through electronic order matching.

Now dematerialisation of shares is introduced “a new concept” which converts paper

based physical trading into electronic trading. It is a safe and convenient way to hold
securities. Screen based trading system helps in faster transfer of securities and no
stamp duty is required on transfer of securities. The trading system operates on a

25
strict price time priority. All orders received on the system are sorted with the best
priced order getting the first priority for matching i.e. the best buy order match with
the best sell order. Orders are matched automatically by the computer keeping the
system transparent, objective and fair. The trading system provides tremendous
flexibility to the users in terms of kinds of orders that can be placed on the system.
The trading system also provides market information online.
In order to promote dematerialization of securities, NSE joined hands with leading
financial institutions to establish the national securities depository Ltd. (NSDL), the
first depository in the country, with the objective of enhancing the efficiency in
settlement systems as also to reduce the menace of fake/forged and stolen securities.
This has ushered in an era of dematerialised trading and settlement. SEBI has made
dematerialised settlement mandatory in an ever –increasing number of securities in a
phased manner, thus bringing about an increase in the proportion of shares delivered
in dematerialised form. There is an increasing preference to settle trades, particularly
in high value securities, in demat form. Such high level of demat settlement reassures
success of rolling settlement.

WHAT IS DEMAT

In India, a demat account, the abbreviation for dematerialised account, is a type of

banking account which dematerializes paper-based physical stock shares. Conversion
of Securities from Physical (Paper) Mode into Electronic Mode is Called
Dematerialisation. The Client opens Demat Account with any DP. Upon Demat, the
Certificates are destroyed and credit entry of exactly equal number of Securities is
created in Depository in Electronic mode. The B.O. account of holder is credited and
the securities loose their identities. The dematerialised account is used to avoid
holding physical shares: the shares are bought and sold through a stock broker.

This account is popular in India. The market regulator, securities and exchange board
of India (SEBI) mandates a demat account for share trading above 500 shares. As of
April 2006, it became mandatory that any person holding a demat account should
possess a permanent account number (PAN), and the deadline for submission of PAN
details to the depository lapsed on January 2007.

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 dematerialize 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.

26
 ACCOUNT OPENING

To avail the services of a depository an investor is required to open an account

with a depository participant of any depository.

PROCEDURE FOR OPENING AN ACCOUNT

• A demat account are opened on the same lines as that of a Bank Account.
Prescribed Account opening forms are available with the DP, needs to be
filled in. Standard Agreements are to be signed by the Client and the DP,
which details the rights and obligations of both parties

• The DP officials will make available the relevant account opening form
(depending on whether the client is a retail investor or corporate
client/clearing member) and specify the list of documents regarding
references that should be submitted along with the form. It will also give a
copy of the relevant agreement to be entered with the client, in duplicate.

• The client will submit the duly filled in account opening form and client has to
visit personally for opening the account in DP. The DP officials have to do in
person verification and affix the “IN PERSON VERIFICATION” stamp on
the account opening form. It should also furnish such documents regarding
references, as specified by the DP, along with the account opening form.
After executing the agreement the client has to forward it to the DP.

27
• The DP officials will verify that the account opening form is duly filled in. It
will also verify the enclosed documents, if any. Incomplete forms will be
forwarded to the client for rectification.

• For Corporate Clients, the DP officials will verify if the board resolution for
the authorized signatories is enclosed.

• In case the documents are not proper, the DP officials will reject the form and
intimate the client of the same, stating the reasons for doing so.

• If the form is in order; the DP officials will accept the same and affix the
stamp “verified with original” on each and every proof after seeing the
original proofs.

• After completion of all documentation, the DP officials will verify the pan
from income tax website. And affix the stamp “PAN VERIFIED” with date
and sign on the stamp.

• The DP officials will enter the client details as mentioned in the account
opening form in the DPM (software provided by NSDL & CDSL to the
Participant) screen provided for the purpose. In case of NSDL A/c opening
the SR. Assist will capture all the details in the DPM and record the client’s
signature (on the form) as specimen for authorizations in the future.

• After entering client details in the system, a client account number will be
generated by the DPM. The DP officials will enter this in the account opening
form. After that the officers will verify the details in the DPM captured by the
SR. Assist. and activate the account.

• The DP officials are not allowed to give the demat a/c no to the clients until
the a/c is activate, this is applicable for both NSDL & CDSL.

• When the demat a/c is activated the DP officials have to send the client master
and the copy of agreement between DP and client at the client’s address.

• The account holder is called 'beneficial owner' in a depository system and the
account is known as 'beneficiary account'.

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Features of Beneficary Account·

• No minimum balance is required to be retained in a beneficiary account.

• An investor can close a beneficiary account with one DP and open an account
with another DP.
• To dematerialise existing physical holdings, the beneficiary account must be
opened in the same ownership pattern in which the securities are held in the
physical form e.g.,if one certificate is in individual name and another
certificate is jointly held by X & Y, two different accounts should be opened.
However, in case of joint holders, securities can be dematerialised in the same
account even though share certificates are in different sequence of names e.g.,
shares held in joint names of X & Y can also be dematerialised in an account
opened in the names of Y & X as well by submitting an additional form
(Transposition Form) alongwith Demat Request Form to the DP.However,
shares held jointly by X & Y cannot be dematerialised in an account opened in
the name of only X or only Y or any .

DOCUMENTS SHOULD BE REQUIRED FOR DEMAT ACCOUNT

Proof of Identity (POI):

• Passport
• Voter ID card
• Driving license
• PAN card with photograph
• Identity card with applicant’s photograph issued by
1. Central or state government and its department
2. Statutory/regulatory authorities
3. Public sector undertakings
4. Scheduled commercial banks
5. Public financial institutions
6. College affiliated to universities

Proof of Address (POA):

• Ration card
• Passport
• Voter ID card
• Driving License
• Bank passbook
• Verified copies of :
1. Electricity bills (not more than 2 months old)
2. Residence landline telephone bill (not more than 2 months old)
3. Leave & license agreement/agreement to sell (duly attested)
4. Self declaration by supreme court/high court judges, giving the new address in
respect of their own accounts

29
 • Identity card with applicants photograph issued by

1. Central or state government and its department

2. Statutory/regulatory authorities
3. Public sector undertakings
4. Scheduled commercial banks
5. Public financial institutions
6. College affiliated to universities.
• Passport-size photograph
• Copy of PAN card along with original PAN card for verification

Bank details:

• Copy of cancelled cheque with printed name from the bank.

• Copy of bank passbook with name and address and copy of cancelled cheque.

• Bank statement with name and address (duly authorized by the bank, if
statement is on plain paper) not more than 4 months old and copy of cancelled
cheque of MICR & bank detail verification.

In case of minor

• Date of birth certificate duly notarized.

• Proof of address and identity documents of the guardian both minor and
guardian’s photograph and guardian to sign across both photographs
• PAN card of minor as well guardian is mandatory

In case of NRI

• Foreign address and RBI approval date attested copy of RBI approval
• NRO-Indian address alonwith proofs
• Bank account details

In case of joint holdings

In case of joint holdings, POI and POA documents alongwith PAN card must be
submitted in respect of all account holders. Original documents must be taken to the
DP for verification.

30
 The DP will also provide a copy of the DP-Client agreement.

 Account opening form require the applicants to give the following details:

• Name(s) of account holder(s) -The investor should ensure that the name is
identical to that which appears on the certificate(s) to be dematerialised. In
case of joint holdings, account may be opened in any one combination,
irrespective of the sequence in which names are appearing on share
certificates. Investors are advised to open their account in their fully expanded
name, i.e., to spell to the first name as well as the middle name. This would
obviate any doubts about the veracity of the information.

• (b) Mailing and communication address(es) - The veracity of the applicant's

address is determined through the documents submitted for verification like
ration card, passport, voter ID, PAN card, driving license, bank passbook, etc.
For NRI accounts, proof is required for both addresses - that of the account
holder as well as the constituted attorney. For corporate accounts, a copy of
Memorandum of Association, Articles of Association, Board resolution
permitting opening of account, the registered address of the company have to
be furnished.

• (c) Details of guardian in case account holder is a minor -Only a guardian

can open a depository account for a minor. The guardian is required to sign
the application form, and details of his name and address need to be given in
addition to the details of the minor.

• (d) Foreign Address and RBI approval details for NRI, FII or OCB
accounts -For foreign-based applicants like NRIs, Flls, OCBs, etc., the
applicant must furnish original or attested copies of the power of attorney and
the approval letter from RBI permitting them to invest, as the case may be.If
the account holder is an FII or an OCB, SEBI registration details along with
attested copy of registration certificate issued by SEBI and authorisation letter
is required.

• (e) Details of bank account -Details of bank account of the account holder,
including the nine digit code number of the bank and branch appearing on the
MICR cheques issued by the bank have to be filled in the application form.

31
 Companies use this information for printing them on dividend/interest
warrants etc.

• (f) Nomination declaration - A beneficial owner can make a nomination of

his account in favour of any person by filing the nomination form with his DP.
Such nomination is considered to be conclusive evidence of the account
holder'(s) disposition in respect of all the securities in the account for which
the nomination is made.

• (g) Standing Instruction - a facility of standing instruction is provided to the

investors for receiving securities to the credit of their accounts without giving
a separate receipt instruction.

• The Demat account cannot be operated on "either or survivor" basis like the
bank account. In case of the joint account for the beneficial owners, all the
joint holders have to sign the account opening form.

• The investor will submit to his DP the duly filled in account opening form &
DP-client agreement along with the documents.

• The DP will verify whether the account opening form has been duly filled in
or not. He will also verify the submitted documents. For corporate investors,
the DP will also verify whether the board resolution for the authorized
signatories has been enclosed. The DP will ensure that client's signature is
recorded on the form which will serve as specimen for authorizations in
future.

• If the application form and documents are in order, then the DP will accept
them and give an acknowledgement slip duly signed and stamped to the client.
The DP will execute the agreement and give a copy of it to the client.

• After completion of all documentation, the DP will enter the client details as
mentioned in the account opening form in the DPM (software provided by
NSDL to the DP) screen provided for the purpose. After entering client details
in the system, a client account number will be generated by the DPM. The DP
will enter this in the account opening form.

• On successful opening of the account, the DP will give:

• Client Id - an eight digit number to be used along with DP Id for any future
transactions.
• Delivery Instruction slip book.

32
 • A copy of the report listing the client details captured in the DPM database to
the client. The report will be generated by the DPM.

PREREQUISTIES FOR DEMATERIALISATION REQUEST

1. The registered holder of the securities should make the request.

2. Securities to be dematerialised must be recognised by NSDL/CDSL as eligible. In

other words, only those securities whose ISIN has been activated by NSDL/CDSL,
can be dematerialised.

3. The company/issuer should have established connectivity with NSDL/CDSL. Only

after such connectivity is established that the securities of that company/issuer are
recognized to be "available for dematerialisation".

4. The holder of securities should have a beneficiary account in the same name as it
appears on the security certificates to be dematerialised.

5. The request should be made in the prescribed dematerialisation request form.

33
 REASONS FOR DEMATERIALISATION REQUEST REJECTION

1. The quantity of shares mentioned in the DRF is more than the actual
certificates sent.

2. The quantity of shares mentioned in the DRF is less than the actual certificates
sent.

3The certificates sent are fake.

4. The certificates sent are reported Stolen.

5. Original certificates present are those for which the duplicates have already been
issued.

6. Endorsements on the certificates are forged.

7. Securities stand on a different name than those mentioned in the DRF.

8. The details mentioned on the certificates do not match with the details on the DRF,
or the order of the holders name on the DRF is different from the names given on the
certificates. The scrutiny by the DP is incomplete.

9. The securities attached / DRF does not pertain to the R&T Agent to whom the DRF
is sent.

10. Electronic request received but physical certificates are not received with in 15
days.

34
11. Specimen Signature on the DRF differs from the signatures recorded with the
Registrar / Transfer Agents.

12. The certificates sent have a court injunction against them

Precautions:

• Corporate investors to enclose Memorandum of Association/Trust deed/Board

resolution for the authorized signatories along with the account opening form.
• Details with respect to the bank account details of an investor must be
indicated in the space provided for the same in the account opening form.
• If an investor is interested in availing the facility of standing instructions for
credits to his account, then such instructions may be given to the DP.
Otherwise, he will need to give a receipt instruction to his DP for receiving
credits to his account.

BENEFITS OF DEMATERIALISATION

• No stamp duty for transfer of securities in the Depository System. In the case
of physical shares, stamp duty of 0.25% of sale value is payable on transfer
of shares.

• Elimination of bad deliveries and all risks associated with physical certificates
such as loss in transit, theft, mutilation, damage, etc.

• Facility for freezing/locking of investor accounts to make it non-operational

for specified period.

• Instead of filling up transfer deed(s) a simpler form is to be given `to the DP.

• Facility to pledge and hypothecate securities. Pledging Dematerialised

securities is easier and advantageous as compared to pledging physical
shares. In respect of shares in "compulsory Demat" category, banks prefer to
lend against shares held in electronic form, and offer better terms.

• Odd lots are not differentiated in the electronic system. Even a single share
can be traded at the market rates without any reduction in realisation.

• Just like a bank branch, the DP will give a periodical statement of

account of holdings. In addition, investor can obtain a statement of
holdings as and when required for a fee.

35
• In case investor loses the statement of holdings, he can inform his DP and
obtain a duplicate statement. Investor's statement of holdings cannot be used
by anybody else for trading in his account.

• When an investor opens an account with a DP, he signs an agreement with the
DP in which the DP will indemnify the investor for any mis-use of his
holdings. The depository will also ensure thatthe interests of the investor are
protected. Grievances, if any, against his DP will be resolved by the
Depository.

• Every transaction in investor's account will have to be authorised by him,

which ensures total control of the investor over his investment

• A safe and convenient way to hold securities and there is immediate transfer
of securities.

• Change in address recorded with DP gets registered with all companies in

which investor holds securities electronically eliminating the need to
correspond with each of them separately.

• Reduction in paperwork involved in transfer of securities and Reduction in

transaction cost

• Automatic credit into demat account of shares, arising out of

bonus/split/consolidation/merger etc.

DEMAT PROCESS

1. The registered holder of the securities makes the request.

2. Securities must be recognised by Depository as eligible.

3. Client submits DRF & physical certificates to DP. DP checks securities.

4. Client defaces certificates and DP punches two holes on name of company.

5. DP enters demat request in system for Depository.

6. DP dispatches certificates along with DRF to R&T.

7. Depository records the details and sends to R&T.

36
 8. R&T agent verifies the details and confirms to Depository.

9. Depository credits the demat securities to BO a/c of client and

intimates DP electronically.

10. DP issues statement to client.

DEMAT -PROCESS

Demat Process:

Shareholders With Physical Certificate

Depository Shareholder goes to DP with his

physical share certificates
Participants

Shareholder opens his account

Account Opening with DP.

Demat Request Shareholder fills DRF in

duplicate, defaces the shares
Form (DRF)
and hands over to DP

The DP sends R&T Depository DP sends information

Share certificates electronically to Depository
Agent
to R&T agent for
dematerialisation
Dematerialisation Upon confirmation of Demat by
R&T Agent, the Depository
confirms Dematerialisation.

Credit to the BO
A/c. of the Investor

37
 INFORMATION NEEDED FOR DEMAT ACCOUNT

An investor has to give his bank account details at the time of account opening. It
is for the protection of investor’s interest. The bank account number will be
mentioned on the interest or dividend warrant, so that such warrant cannot be
encashed by any one else. Further, cash corporate benefits such as dividend, interest
will be credited to the investors account directly through the ECS (Electronic
Clearing Service) facility, wherever available, by the company.

An investor can change the details of his bank account. Since in the depository
system monetary benefits on the security balances are paid as per the bank account
details provided by the investor at the time of account opening, the investor must
ensure that any subsequent change in bank account details is informed to the DP.

An Investor should immediately inform his/her DP if the address of the investor

changes, who in turn will update the records. This will obviate the need of informing
different companies.

An investor can open more than one account in the same name with the same DP
and also with different DPs.
An investor has not to keep any minimum balance of securities in his/her accounts.
Depository / DP can be chosen by investor as per convenience irrespective of the DP
of the broker.
The demat account must be opened in the same ownership pattern such as securities
owned individually in which the securities are held in the physical form. e. g. if one
share certificate is in the individual name and another certificate is jointly with
somebody, two different accounts would have to be opened.

38
 WHAT IS DEPOSITORY AND DEPOSITORY PARTICIPANT

Depository can in many ways be compared to a bank. Securities of the investors are
held in electronic / book entry form by the Depository. Apart from holding the
securities, Depository also provides services related to transactions in securities.

In India, a Depository Participant (DP) is described as an agent of the depository.

They are the intermediaries between the depository and the investors. The
relationship between the DPs and the depository is governed by an agreement made
between the two under the Depositories Act. In a
Strictly legal sense, a DP is an entity who is registered as such with SEBI
under the provisions of the SEBI Act.

Think of it like a bank. The head office where all the technology rests and details of
all accounts held is like the depository. And the DPs are the branches that cater to
individuals.

At present two Depositories viz. National Securities Depository Limited (NSDL) and
Central Depository Services (I) Limited (CDSL) are registered with SEBI

39
NATIONAL SECURITIES DEPOSITORY LIMITED (NSDL)

NSDL was the first depository organization promoted by IDBI, UTI, and National
Stock Exchange (NSE). NSDL was set up to provide electronic depository facilities
for securities being traded in capital market. The depositories ordinance was
promulgated by the Government of India in September 1995. The Securities and
Exchange Board of India (SEBI) issued guidelines for depositories in May, 1996.

NSDL has minimum net worth of Rs 100 crores. NSDL deals with shares in
dematerialized form through depository participants who are agents of investor banks,
stockbrokers and financial institutions. NSDL Depository Participant can be a public
financial institution, bank, custodian, registered stockbroker or a non-banking
financial company subject to the approval from the Depository Company and SEBI.
NSDL aims at ensuring the safety and soundness of Indian capital market by
developing settlement solutions that increase efficiency, minimize risk and reduce
costs.

40
CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED (CDSL)

CENTRAL DEPOSITORY SERVICEES LIMITED (CDSL) is second depository in

India, is set up to meet the objective the Act & to fulfill the user’s need. CDSL is
secured “Certificate of Commencement” of business on Feb 8, 1999 from SEBI. The
balances in the investors’ account recorded and maintained with CDSL can be
obtained through the DP. The DP is required to provide the investor, at regular
intervals, a statement of account, which gives the details of the securities holdings
and transactions. The depository system has effectively eliminated paper-based
certificates, which were prone to be fake, forged, counterfeit resulting in bad
deliveries. CDSL offers an efficient and instantaneous transfer of securities.

CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading
banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank,
Standard Chartered Bank, Union Bank of India and Centurion Bank. Each and every
activity of CDSL stem from the essential reason behind forming this depository, i.e.
to encourage India's individual investors to benefit from actively participating in a
depository.

41
Services provided by Depository system

• Dematerialisation (usually known as demat) is converting physical certificates

to electronic form.

• Rematerialisation, known as remat, is reverse of demat, i.e. getting physical

certificates from the electronic securities.

• Transfer of securities, change of beneficial ownership

• Settlement of trades done on exchange connected to the Depository

• Pledge / Hypothecation of demat shares, viz. Loan against shares

• Electronic credit in public offering of the Companies

• Non - Cash corporate benefits, viz. Bonus / Rights - direct credit into
electronic form

• Depository restrict the risk of fraud

42
 The charges for account closure and securities transfer due to account closing.

SEBI vide Circular No. MRD/DoP/Dep/Cir-22 /05 dated November 09, 2005 advised
that with effect from January 09, 2006, no charges shall be levied by a depository on
DP and consequently, by a DP on a Beneficiary Owner (BO) when a BO transfers all
the securities lying in his account to another branch of the same DP or to another DP
of the same depository or another depository, provided the BO Account/s at
transferee DP and at transferor DP are one and the same, i.e. identical in all respects.
In case the BO Account at transferor DP is a joint account, the BO Account at
transferee DP should also be a joint account in the same sequence of ownership.

All other transfer of securities consequent to closure of account, not fulfilling the
above-stated criteria, would be treated like any other transaction and charged as per
the schedule of charges agreed upon between the BO and the DP.

Freeze or lock of an account

Investors can freeze or lock their accounts for any given period of time, if so desired.
Accounts can be frozen for debits (preventing transfer of securities out of accounts)
or for credits (preventing any movements of hindrances into accounts) or for both.

43
 Trading / Settlement

Traditionally settlement system on Indian stock exchanges gave rise to settlement risk
due to the time that elapsed before trades were settled by physical movement of
certificates. The process of physical moving the securities from seller to his broker to
clearing corporation to the buyer’s broker and finally to the buyer took time with the
risk of delay somewhere along the chain. Now depository holds securities in
dematerialised form. The procedure for buying and selling dematerialised securities is
similar to the procedure for buying and selling physical securities. The difference lies
in the process of delivery (in case of sale) and receipt (in case of purchase) of
securities.

In case of purchase:-

• The broker will receive the securities in his account on the payout day
• The broker will give instruction to its DP to debit his account and credit
investor's account
• Investor will give ‘Receipt Instruction to DP for receiving credit by filling
appropriate form. However one can give standing instruction for credit in to
ones accounts that will obviate the need of giving Receipt Instruction every
time.

In case of sale:-

44
The investor will give delivery instruction to DP to debit his account and credit the
broker’s account. Such instruction should reach the DP’s office at least 24 hours
before the pay-in as other wise DP will accept the instruction only at the investor’s
risk.

'Standing Instruction' given in the account opening form

In a bank account, credit to the account is given only when a 'pay in' slip is
submitted together with cash/cheque. Similarly, in a depository account 'Receipt in'
form has to be submitted to receive securities in the account. However, for the
convenience of investors, facility of 'standing instruction' is given. If you say 'Yes' for
standing instruction, you need not submit 'Receipt in' slip everytime you buy
securities. If you are particular that securities can be credited to your account only
with your consent, then do not say 'yes' [or tick ] to standing instruction in the
application form.

Delivery Instruction Slip (DIS) and the precautions which one need to observe
with respect to Delivery Instruction Slips

To give the delivery one has to fill a form called Delivery Instruction Slip (DIS). DIS
may be compared to cheque book of a bank account. The following precautions are to
be taken in respect of DIS:-

• Ensure and insist with DP to issue DIS book.

• Ensure that DIS numbers are pre-printed and DP takes acknowledgment for
the DIS booklet issued to investor.
• Ensure that your account number [client id] is pre-stamped.
• If the 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

45
 • 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 book, strike out remaining space to
prevent misuse by any one.
• Investor should personally fill in target account -id and all details in the DIS.

It is possible to give delivery instructions to the DP over Internet .Both NSDL and
CDSL have launched this facility for delivering instructions to your DP over Internet,
called SPEED-e and EASI respectively. The facility can be used by all registered
users after paying the applicable charges.

Lending and borrowing of demat securities

If any person required to deliver a security in the market does not readily have that
security, he can borrow the same from another person who is willing to lend as per
the Securities Lending and Borrowing Scheme.
Lending and borrowing has to be done through an 'Approved Intermediary' registered
with SEBI. The approved intermediary would borrow the securities for further
lending to borrowers. Lenders of the securities and borrowers of the securities enter
into separate agreements with the approved intermediary for lending and borrowing
the securities. Lending and borrowing is affected through the depository system.
You can lend your securities through Approved Intermediaries registered with SEBI.

One can lend his/her demat seurities by entering into an agreement with the approved
intermediary to be a lender under this scheme. After that, you may lend securities any
time by submitting lending instruction to your DP.
Intermediary may return the securities at any time or at the end of the agreed period
of lending. Intermediary has to repay the securities together with any benefits
received during the period of the loan.
One can receive the corporate benefits which would accrue on these securities during
the period of lending.The benefits will be given to the Intermediary/borrower.
However, whenever the securities are being returned / recalled.
Intermediary/borrower will return the securities together with benefits received.

46
 PHYSICAL SEGMENT

Change in Name / Status

- All requests for change of name should be accompanied by a copy of the notification
in Official Gazette or a Newspaper.

- Request for change of name consequent upon marriage/divorce should be

accompanied with marriage certificate/divorce decree.

- For effecting change of status from minor to major, please send proof of age (such as
attested copy of Birth Certificate or School Leaving Certificate)

- In the case of limited companies, a certified copy of the Certificate of Incorporation

consequent to Change of Name issued by the Registrar of Companies should be
submitted along with Memorandum & Articles of Association

- The new specimen signature duly attested by holder's banker should be lodged with
the Company to take on record the new signature.

Change of Address

47
 Please inform the R&TA viz Integrated Enterprises (India) Limited immediately if
there is any change in address, quoting Folio No. Duly signed by the main (1st)
holder as per specimen signature recorded with us. This is the reason for which we
would advise you not to send change of address request by mail. If shares are held in
demat form, please advice your DP regarding change of address.

Loss of Share Certificates

Any communication to the Company regarding loss of share certificates should

always be signed by the shareholder as per specimen signature registered with the
Company, accompanied by FIR lodged with local police station giving full details of
lost certificate(s) such as certificate(s) Nos., Distinctive Nos. etc.

- Please immediately apply for injunction order in appropriate Court of Law for
stopping transfer, giving full details of Certificate Nos., Distinctive Nos. etc.

- Upon receipt of such communication, the procedure to be followed for obtaining

duplicate share certificates will be advised

Nomination

Nomination when shares are held in physical form

Nomination will enable smooth inheritance of ownership of the shares by the

Nominee without any procedural difficulties. (Presently, there is no difficulty where
shares are registered in joint names. But if the shares are held in an individual name,
addition of a joint name can only be done as a transfer, involving share transfer form,
stamp duty, surrender of original certificates etc. Following the nomination procedure
eliminates all this inconvenience). Therefore, if shares are held in a single name, ,
with the intention of holding them for some more time, then please advise nomination
immediately without delay

Following Instructions for the Nomination

1. Nomination can be made only by individuals, holding shares on their own behalf
singly or jointly. Non-individuals including society, trust, body corporate, partnership
firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate.
If the shares are held jointly, all joint holders must sign the nomination form.
2. A minor can be nominated by a holder of shares and in that event the name and
address of the Guardian must be given by the holder.
3. The nominee shall not be a trust, society, body corporate, and partnership firm, Karta
of Hindu Undivided Family or a power of attorney holder. A non-resident Indian can
be a nominee on repatriable basis.

48
 4. Nomination will stand cancelled upon transfer of shares.
5. The Company will be fully discharged from its responsibility towards the legal heirs
of a shareholder, if the shares are transmitted as per the nomination filed with the
company, without any further reference to the legal heirs of a deceased individual
shareholder(s)
6. Where the space provided in the Form is not sufficient, shareholders are requested to
attach separate sheet(s) giving details of distinctive nos. of shares.
7. The Nomination Form should be filed in duplicate with the Company, who will return
one copy thereof to the shareholder.
8. Although Form 2B as prescribed does not provide for specimen signature of nominee,
this has been suggested in order to facilitate smooth transmission of title to the
nominee when the need arises.
9. Please note that if physical shares are subsequently converted into electronic form,
any nomination already filed will cease to have effect; the nomination details
furnished to the Depository Participant will prevail thereafter

ISIN

 International Securities Identification Number (ISIN)

Each of the securities dematerialised in the NSDL depository bears a distinctive ISIN
– an identification number. International Securities Identification Number (ISIN) is a
unique identification number for each security issued in any of the International
Standards Organisation (ISO) member countries in accordance with the ISIN
Standard (ISO 6166). ISO 6166 was developed for use in an international (cross-
border) as well as domestic trades. ISIN is a 12-character long identification mark. It
has three components - a pre-fix, a basic number and a check digit. The pre-fix is a
two-letter country code as stated under ISO 3166 (IN for India). The basic number
comprises nine alphanumeric characters (letter and/or digits). The check digit at the
end of the ISIN is computed according to the modulus 10 "Double-Add- Double". It
establishes that the ISIN is valid.

Securities issued by the same company, issued at different times or carrying different
rights, terms and conditions are considered different securities for the purpose of
allocating ISIN and are allotted distinct ISINs. In India, SEBI assigns ISIN to various
publicly traded securities. Different ISINs are allocated to the physical and
dematerialised securities of the same issue.

49
SEBI being the national numbering agency for India has permitted NSDL to allot
international securities identification number (ISIN) for demat shares. The ISINs
allotted by NSDL does not at any point of time breach the uniqueness of ISIN of
physical form for the same security. ISIN for a security is allotted when the security is
admitted to NSDL. The numbering system is simple. The numbering system of ISIN
is in compliance with the structure of ISIN adopted by SEBI.

International Securities Identification Number:

1. Issued by International Standards Organisation (ISO) member countries in

accordance with ISO 6166.
2. ISIN is 12 digit alpha numeric number.
3. It has three components, prefix, basic & check digit.
4. Prefix is a two letter country code i.e. IN for India.
5. The basic number has nine alpha numeric characters.
6. The last digit is check digit. It ensures the ISIN is valid.

Numbering system of ISIN

The numbering structures for securities in NSDL is of 12 digit alpha numeric string.
The first two characters represent country code i.e. IN(in accordance wirh ISO 3166).
The third characters represents the issuer type as detailed below:

Issuers type

Issuer type code allotted

Central government A

State government B

Municipal corporation C

Union territories D

Company, statutory corporation, E

50
Baking company

Mutual funds including UTI F

The list may be expanded per the needs. Maximum issuer types can be 35 (A to Z and
0 to 8. the pro-rata dividend shares are identified by 9). The next 4 characters (fourth
to seventh character) represent company identity. The first 3 characters are numeric.
The fourth character is alpha character. The numbering begins with ‘001A’ and
continues till ‘999A’ and proceeds to ‘001B’. the next two characters (the eight and
ninth characters) represent security type for a given issuer. Both the characters are
numeric. The next two characters (the tenth and eleventh characters) are serially
issued for each security of the issuer entering the system. Last digit is double-add-
double check digit.

The security types are planned which may be expanded as per the need as detailed
below:-

Security type code

Equity 01

Non voting equity 02

Convertible preference shares 03

Non convertible preference shares 04

Mutual fund units –close ended 05

Mutual fund units-open ended 06

Secured debentures 07

Unsecured debentures 08

Regular return bonds-promissory notes 09

Floating rate bonds 10

51
Deep discount bonds 11

Step discount bonds 12

Warrants 13

RESEARCH METHODOLOGY

Research methodology refers to the search for Knowledge. It is a way to

systematically solve the research problem. In it we study the various steps that are
generally adopted by the researcher in studying his research problem along with logic
behind them.

Research Methodology concerning a research problem or study provide answers to

various questions like; why a research study has been undertaken, how the research
problem has been defined, what data have been collected and what particular method
has been adopted to collect the data, what technique has been used for analyzing the
data and a host of similar other questions

Though there are more than one alternative approaches available to the researcher, but
this not enough to make the task of selecting the suitable research design simpler.
Like the so-called suitable research design may require some in between approach.
The objective of study being the main determinant of the validity and reliability of the
method adopted the degree of usefulness of the scientific method. Since there are
many aspects of research methodology, in line of action has to be chosen from variety
of alternatives, so that individual choice of suitable method is further complicated and
make a viable whole. The choice of suitable method is further complicated by the
possibility of many permutations and combinations. The fair selection can be arrived
at through the objective assessment and of course comparison of various alternatives.
The finally selected line of action must ensure that this is indeed best one as against

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those rejected by the researcher. in addition, the circumstances and problems also
having a bearing in the choice. To count a fem, limitations could be imposed in the
sense of funds available, time and urgency in conducting the research. So the final
choice must be based on assessment of its advantage and disadvantages when
weighted against affecting factors.

Research methodology can be said to have four major components namely-Research

design, Sample design, Data collection procedure and methods of analyzing and
reporting the findings.

Research Design

The research problem having been formulated in clear cut terms, the researcher will
be required to prepare a research design i.e., he will have to state the conceptual
structure with in which research would be conducted. The preparation of such a
design facilitates research to be as efficient as possible yielding maximal information.
But how all there can be achieved depends mainly on the research purpose. Research
purpose may be grouped into four categories.

(1) Exploration
(2)Description
(3) Diagnoses and
(4) Experimentation.

Exploratory research studies are those whose main purpose is that of formulating a
problem for more precise investigation or of developing the working hypotheses from
on operational point of view.

Descriptive research studies are those studies which are concerned with describing
the characteristics of a particular individual, or of a group

Diagnostic research studies determine the frequency with which something occurs.

Experimental research studies are those where the researcher tests the hypothesis of
casual relationship between the variables.

Research design of this particular research study of dematerialization of shares is

primarily based on descriptive and diagnostic research design. As descriptive and
diagnostic research design describes the characteristics and determines the frequency
with which something occurs respectively, similarly this research determines the
characteristics of the individuals who deal in share and also determine the frequency
of dealing on the basis of their characteristics.

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 Sample Design

All the items under consideration in any field of inquiry constitute a ‘Universe’ or
‘Population’. A complete enumeration of all the items in the population is known as
a census inquiry. This type of inquiry involves a great ideal of time, money and
energy. Hence quite often a few items so selected constitute what is technically called
a sample.

The researcher must decide the way of selecting a sample or what is popularly known
as sample design. A sample design is a definite plan determined before any data are
actually collected for obtaining a sample from a given population. Samples can be
either probability or non-probability samples. With probability samples each element
has a known probability of being included in the sample but non-probability samples
are those based on simples do not allow the researcher to determine this probability.

Probability samples are those based on simple random sampling, systematic sampling
, etc where as non probability samples are those based on convenient sampling,
judgment sampling etc.

Data collection techniques

The required data is collected both from primary as well as secondary sources.

Primary Sources: The primary data was collected through structured unbiased
questionnaire and personal interviews of investors. For this purpose questionnaire
included were both open ended & close ended & mulple-choice questions.

Secondary Sources: Secondary data is the data, which is collected and

complied for different purposes, which are used in research for this study. The
secondary data includes material collected from:-

Magazines & Bulletins- Brochure of Unicon Securities Pvt. Ltd.

Internet- www.sebi.gov.in
www.nseindia.com
www.uniconindia.in

SIZE OF SAMPLE

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 The overall sample involved in the study consisted of 50 individuals. Keeping in view
the limited resources of time, a limited sample of individuals. It was fixed before
hand and every effort was made to cover the given number of individuals with
available time for the collection of data for this project. The data was collected with
the help of the questionnaire herself by the researcher.

Method used for analysis of study

The methodology used for this purpose is Survey and Questionnaire Method. It is a
time consuming and expensive method and requires more administrative planning and
supervision. It is also subjective to interviewer bias or distortion.

Analysis of Data

After the data have been collected, the researcher turns to the task of analyzing them.
The analysis of data requires a number of closely related operations such as
establishment of categories, the application of these categories to raw data through
coding, tabulation and then drawing statistical inferences. The unwisely data should
necessary be condensed into a few manageable groups and tables for further analysis.
Thus researcher should classify the raw data into some purposeful and usable
categories. In the process of analysis, relationships or differences supporting or
conflicting with original or new hypotheses should be subjected to tests of
significance to determine with what validity data can be said to indicate any
conclusion

Interpretation

The interpretation is done on the basis of the analyzed data and also some
recommendations are given to fill the loopholes of the actual scenario.

55
 DATA ANALYSIS AND
INTERPRETATION

Research is conducted for finding the solution of the problem. So to find the solution
of the problem data analysis and interpretation is must. There are some questions
related to this research to interpret the result.

The sample size in this study consisted of 50 individuals and data analyzed from the
response of these 50 individuals.

1. ARE YOU AWARE OF STOCK MARKET?

The basic purpose of this question is to know about how many people are
aware of the stock market and its activities.

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 NUMBER % OF
RESPONSES OF RESPONSES
RESPONSES

YES 50 100

NO 0 0

TOTAL 50 100

NO

S eries 1

YES

0 20 40 60 80 100 120

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Interpretation:-

This graph shows that all the 50 individuals were aware of stock market. So it can
also be possible that investors will rise in near future.

2. ARE YOU AWARE OF DEMAT ACCOUNT?

The basic purpose of this question is to know about awareness of demat account
among respondents.

NUMBER % OF
RESPONSES OF RESPONSES
RESPONSES

YES 40 80

NO 10 20

TOTAL 50 100

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 YES
NO

Interpretation:-

The above table clearly shows that from a sample size of 50 respondents, 40
individuals were aware of demat account.

3. DURATION FOR WHICH INVESTOR HAS BEEN TRANSACT IN THE

STOCK EXCHANGE?

The purpose of this question is to know about the duration for which investor has
been transact in stock exchange.

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 NUMBER % OF
DURATION OF RESPONSES
RESPONSES

LESS THAN
1 YEAR 20 40

1 YEAR 5 10

2 YEAR 10 20

MORE THAN
2YEAR 15 30

TOTAL 50 100

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 LESS THA N 1 Y EA R
1 Y EA R
2 Y EA R
MORE THA N 2 Y EA ER

Interpretation:-

The above table clearly shows that from a sample size of 50 respondents, 15 have
been trading in the stock exchange for more than 2 years. 10 investors were trading
for 2 years and remaining 25 for one year or less than a year

4. DO YOU TRADE- FREQUENTLY OR OCCASIONALLY?

This purpose of this question is to find out how many persons trade frequently or
occasionally.

NUMBER % OF
TRADE OF RESPONSES
RESPONSES

FREQUENTLY 20 40

OCCASIONALLY 30 60

TOTAL 50 100

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 FREQUENTLY
OCCASIONALLY

Interpretation:-

This chart shows that 30 individuals trade occasionally and 20 individuals trade
frequently.

5. WHICH TYPE OF SCRIPTS YOU HAVE?

The purpose of this question is to know about which type of scripts the respondents
have.

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 NUMBER % OF
SCRIPTS OF RESPONSES
RESPONSES

PHYSICAL 15 30

DEMATERIALISED 35 70

TOTAL 50 100

40
35
30

25
20 Series1

15
10

5
0
PHYSICAL DEMATERIALISED

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Interpretation:-

Above graph shows that many individuals have dematerialised scripts and some have
physical scripts.

NUMBER % OF
RESPONSE OF RESPONSES
RESPONSES

YES 30 60

NO 20 40

TOTAL 50 100

6. DO YOU CONVERT YOUR SHARES ELECTRONICALLY?

The basic purpose of this question is to know about how many persons are interested
to convert their shares electronically.

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 YES
NO

Interpretation:-

This chart shows that 30 individuals wanted to convert their shares electronically and
rest were not.

7. ARE YOU SATISFIED WITH DEMAT SERVICE PROVIDER?

The purpose of this question is know satisfaction about demat service provider.

65
 NUMBER % OF
RESPONSES OF RESPONSES
RESPONSES

YES 45 90

NO 5 10

TOTAL 50 100

100
90
80
70
60
50 Series 1
40
30
20
10
0
Y ES NO

Interpretation:-

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This graph shows that most of the people were satisfied with demat service provider.

8. PROBLEMS BEING FACED BY THE RESPONDENTS RELATING TO

TRADING?

This question tells us about the type of problems faced by the respondents.

NUMBER % OF
PROBLEMS OF RESPONSES
RESPONSES

NO TRANSFER OR
BAD DELIVERY OF 10 20
SHARES

OTHER TYPE 20 40
OF PROBLEM

NO PROBLEM 20 40

TOTAL 50 100

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 NO TRANSFER OR BAD
DELIVERY OF SHARES
OTHER TYPE OF PROBLEM

NO PROBLEM

Interpretation:-

From the above chart we can see that 20 investors faced no problem due to the
introduction of DEMAT. Nearly 10 respondents faced problems due to non-transfer
and bad delivery of shares. Because of many sick companies being listed in the stock
exchange, the problem of non-receipt of dividend can be found among 7 investors.
There were 20 persons who were facing other problems.
Limitations Of The Research Study

• Due to the lack of time, it was not possible for the researcher to
approach all the people.

• The respondents were asked to indicate their true responses to the

questions being asked, but rather than giving the response, they might have
been in a form of expert comments which might have based the result of the
study.

• The results of the study may not be universally applicable due to regional
constraints.

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• Money was also considered as a major constraint during the research work.

• Personal biasness may be included in the research work.

SUGGESTIONS AND RECOMMENDATIONS

• As many of the people who dealt in share market are aware of UNICON’S
name but not of its services. So company should advertise its services, so that
people can be made aware of all the services provided by the company.

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• Most if the people are not finding any spare time to convert their shares
electronically. So company should approach to such people at their doorstep
to open their demat account.

• As far as people preference regarding opening of demat a/c is concerned then

they mainly prefer two factors i.e. service and trust. So it becomes necessary
for the company to take care of these two factors.

BIBLIOGRAPHY

• Unicon forms for opening depository and trading account.

• Study material of capital market and derivatives market of NCFM.

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 • Websites Visited

www.sebi.gov.in
www.nseindia.com
www.bseindia.com
www.uniconindia.in

QUESTIONNAIRE

I am a student of PGP from Indira Institute Of Career Studies, Pune, Maharashtra.

You are required to fill this questionnaire to enable me to undertake the study on the
said project.

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NAME: _________________________________

CONTACT NUMBER: _________________________________

OCCUPATION: _________________________________

ADDRESS: _________________________________

1. Are you aware of stock market?

(a) Yes (b) No

2. Do you deal in share?

(a) Yes (b) No

3. Are you aware of DEMAT?

(a) Yes (b) No

4. How long have you been transacting in the stock exchange?

(a) Less than 1 year (b) 1 year

(c) 2 year (d) More than 3 year

5. Do you trade frequently or occasionally?

(a) Frequently (b) Occasionally

6. In which securities do you trade frequently?

(a) Equity (b) Bonds

(c) Debentures (d) Futures & Options

(e) All

7. Which type of script you have?

(a) Physical (b) Dematerialized

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8. Why you have not dematerialized your script?

(a) Lack of awareness (b) Time constraint

(c) Liability of changes

9. Do you like to convert your shares electronically?

(a) Yes (b) No

10. On what basis you have taken your decisions of opening of demat

A/c?

(a) Service (b) Changes

(c) Convenience

11.Are you satisfied with your demat service provider?

(a) Yes (b) No

12. What type of problems do you centrally face when you trade in
securities?

(a) Non transfer of shares (b) Other type of problems

(c) Bad transfer of shares (d) No Problem

73