XII COMMERCS

SECRETRIAL PRACTICE

MRS. ASHWINI
NIMBALKAR
------------------
SAKSHI JESWANI
PODAR
INTERNATIONAL
SCHOOL & COLLEGE
 Informative Report Of DEMAT Account

INTRODUCTION :

The word ‘Demat’ is the colloquial short word for ‘Dematerialized account’
which is a type of an account where shares and securities are held
electronically to enable trading transaction & settlements in a stock exchange,
thereby eliminating the need of a physical financial instrument. Informative
Report Of Demat Account will be given in this project

It was in the year 1996 when it was first introduced in India after the
introduction of the depository system by the Depository Act of 1996. It is
mandatory for one to own a demat account with an investment broker linked to
a savings or other funded account if he/she wants to participate in the stock
market trading.

The interested candidate needs to approach a Depository Participant

(DP) which acts as intermediaries between the trader/investor and the
depository. A DP will be registered with the Central Depository Services Ltd.
(CDSL) and the National Securities Depository Ltd. (NSDL) of the country.

The DPs are basically the stockbroking firm, bank or sub-broker etc, with whom
one needs to get registered, which needs some identity proofs and other
documents for verification and on its completion provides the trader with login
credentials and transaction passwords upon whose confirmation the transfers or
purchases of shares can then be initiated.

One can operate the transaction of buying/selling of shares by own or through

broker personally or online from their demat account. The broker then provides
the candidate with transaction password to carry out the share trading processes.
It is possible for a person to hold more than one demat accounts.

Share trading using demat account involves inward and outward brokerage,
which varies from broker to broker and on trading style whether intraday or
delivery.
 AIMS AND OBJECTIVES :
The project aims to learn about Demat account and its features

Objectives of the study are

1. To learn about Demat account

2. To learn about buying and selling through Demat account
3. To learn about functions of Demat account
4. To learn about the uses of Demat account
5. To learn about the varieties of Demat account
6. How to open a demat account
7. What are the requirements to open a demat account

METHOD AND METHODOLOGY :

Research Methodology refers to the search of knowledge .one can also define
research methodology as a scientific and systematic search for required
information on a specific topic. The word research methodology comes from the
word “advanced learner’s dictionary meaning of research as a careful
investigation or inquiry especially through research for new facts in my
branch of knowledge.

DETAIL REPORT OF PROJECT :

What is demat account?
The dematerialized account number is quoted for all transactions to enable
electronic settlements of trades to take place. Every shareholder will have a
Dematerialized account for the purpose of transacting

Access to the Dematerialized account requires an internet password and a

transaction password. Transfers or purchases of securities can then be initiated.
Purchases and sales of securities on the Dematerialized account are
automatically made once transactions are confirmed and completed.

Benefits of Demat Account

 Easy and convenient way to hold securities
 Immediate transfer of securities
 No stamp duty on transfer of securities
 Safer than paper-shares (earlier risks associated with physical certificates such
as bad delivery, fake securities, delays, thefts etc. are mostly eliminated)
 Reduced paperwork for transfer of securities
 Reduced transaction cost
 No “odd lot” problem: even one share can be sold

How to open a Demat Account

Step 1: To open a demat account, you have to approach a depository participant

(DP), an agent of the depository, and fill up an account opening form. The list
of DPs is available on the websites of depositories: CDSL (Central Depository
Services (India) Ltd and NSDL (National Securities Depository Ltd).
Step 2: Along with the account opening form, you must enclose photocopies of
some documents for proof of identity and proof of address.

Step 3: You will have to sign an agreement with DP in the depository

prescribed standard format, which gives details of rights and duties of investor
and DP. You are entitled to receive a copy of the agreement and schedule of
charges for future reference.

Step 4: The DP will then open an account and give you the demat account
number. This is also called beneficial owner identification number (BOID). All
your purchases/investments in securities will be credited to this account. If you
sell your securities, your demat account will be debited.
ANALYSIS OF DATA :
How to trade using the Demat account?
STEP 1:
Link your trading and demat accounts. This way you won’t have to keep
supplying your demat account details for every transaction.

STEP 2:
The exchange will process your order. It will verify the details of the
transaction, the market price, the availability of the shares in the market, and so
on. It will also check the details of your demat account that is linked to your
trading account. This is especially so in case of a sell order.

STEP 3:
Place an order through your online trading account. This could be a market
order, a limit or buy order, or an after-market order. If your brokerage allows
you to place orders through the phone, then you will need to supply your trading
account details.

STEP 4:
Once the order is processed, the shares will be either deposited in or debited
from your demat account.

CONCLUSION :
It’s not mandatory to have demat to invest in mutual funds. However, whether
it’s wise or not to open a demat account, totally depends on investors’
requirement and understanding of the product.
Demat account is compulsory to trade in equity shares., but these days due to
advancement in technology stock exchanges came up with their platform for
Mutual funds investments, so for associated benefits, these depository
participants have also started offering transactions in mutual funds, along with
other products like NPS, Bonds, corporate FDs etc.

DISCUSSION :
I asked a friend “Should I open a Demat account with a bank or with a
brokerage firm?”
It depends on many factors. Brokerage firm and Banks have its own pros and
cons. The brokerage firm will charge you low brokerage fee on the transaction
when compared to banks, but the trade and stock in-depth and insightful report
is what you will miss out on the brokerage firm.
It is always good to make a profit with detailed insights on how the stock is
performing. Such in-depth detailed reports are available only through the banks.
I would prefer to have a detailed report, all analysis before investing the money.
I have tried few banks and zero brokerage providers and by far I found Kotak
Securities to be the best share brokers.
Investment is always subjected to market risk, and in such situations, it is good
to have a detailed stock performance report to compare and make a decision.

SUGGESTION:
I will suggest some following tips related to the Demat account, I have my
personal demat account and I am using it for trading from the last two years.
Trading in stock market is only possible with valid demat and trading account.
if your age is above 18 years then opening demat account is very easy, for open
a demat account you must have following documents like for id proof, pan card,
along with saving bank account, cheques, address proof’s then you apply for the
demat account by any brokerage houses. It will take around one week to open a
demat account then brokers will provide you trading user id and password for
trading in stock market. But some basic tip’s I will suggest you during demat
account opening.
 First, check brokerage house feedback by its existing customers.
 Then compare brokerage’s charges between four to five brokerage
houses.
 Compare annually charges.
 Compare its service.
 Check it’s trading software are user-friendly or not.
 Check call on trade facilities available or not.
 Customer’s care service is supported or not.
 Read all terms and conditions very carefully.
ACKNOWLEDGEMENT :
My profound gratitude to all the faculty members of the Department, for their
timely assistance and encouragement throughout my research work.
I duly acknowledge the encouragement and support by the research scholars in
the department, and all my colleagues and friends.
I thank my friends in the stock market and the management of broking firms
who helped me with valuable data in time.
It gives me immense pleasure to take the opportunity to all the people who are
directly or indirectly involved in the completion of my project based
on Informative report of Demat account
With deep reverence, I offer my deepest gratitude _____, without whom this
project could not have been fulfilled.
Lastly, I thank Almighty, my parents, family members, friends and teachers for
their constant encouragement and support without which this project would not
be possible.
BIBLIOGRAPHY / REFERENCE :
1. https://businessjargons.com/demat-account.html
2. https://en.wikipedia.org/wiki/Demat_account#Benefits_of_Demat_Syste
m
3. https://www.kotaksecurities.com/ksweb/Research/Investment-
Knowledge-Bank/what-is-demat-account
4. https://www.kotaksecurities.com/ksweb/Research/Investment-
Knowledge-Bank/difference-between-trading-account-and-demat-account
5. https://www.quora.com/Is-the-Demat-account-necessary-for-doing-an-
online-trading