"In short, demat is a way of holding of shares in electronic form."
(1) National Securities Depository Limited (NSDL)
(2) Central Depository Services (India) Limited (CDSL).
Securities and Exchange Board of India (SEBI) is the regulating authority for demat operations.
- To receive notice and explanatory statements of general meetings.
- To participate and vote at general meetings either personally or through proxy.
- To receive Postal Ballots forms along with notice etc.
- To receive Annual Reports or any other periodical reports.
- To inspect statutory registers and documents during the working hours fixed by the Company.
- To demand poll on any resolution at general meetings.
- To receive dividends, if any, as approved.
- To receive rights shares, bonus shares, etc. if declared and approved.
- And many other rights equally as enjoyed by the shareholder holding shares in physical form.
- Elimination of risks associated with physical certificates viz. torn and defaced
- Elimination of bad deliveries of share certificates.
- No Stamp duty payable on transfer of shares through demat accounts.
- Faster way of trading and transfer of shares including fast settlement cycle.
- Pledging of shares /transmission becomes easier and faster to conclude.
- Online platform to check and monitor status.
- Balance statements including pending are received in email automatically through system - monitoring becomes strong.
- Changing address, name, nomination, transposition-changing order of names in joint holding, bank mandates etc becomes easier through submission of forms to the depository directly. Depository branches are available more in numbers.
- Easier and faster disbursement of rights shares, bonus shares, etc.
- Subscribing to IPO through demat and trading account is much easier than through manual way.