CASE STUDY ON HDFC AND ICICI DEMATE ACCOUNT :

CASE STUDY ON HDFC AND ICICI DEMATE ACCOUNT

MEANING OF DEMATE ACCOUNT :

MEANING OF DEMATE ACCOUNT The term Demat, in India, refers to a dematerialised account. For
individual Indian citizens to trade in listed stocks or debentures the Securities Exchange Board of India
(SEBI) requires the investor to maintain a Demat account. In a demat account shares and securities are held
in electronic form instead of taking actual possession of certificates. A Demat Account is opened by the
investor while registering with an investment broker (or sub broker). The Demat account number which is
quoted for all transactions to enable electronic settlements of trades to take place.

BENEFITS OF DEMATE :
BENEFITS OF DEMATE Its a safe and convenient way to hold securities Immediate transfer of securities is
there There is no stamp duty on transfer of securities Elimination of risks associated with physical
certificates such as bad delivery, fake securities, delays, thefts etc There is a major reduction in paperwork
involved in transfer of securities, reduction in transaction cost etc No odd lot problem, even one share can
be sold thus there is an advantage 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

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Transmission of securities is done by DP eliminating correspondence with companies; Automatic credit into
demat account of shares, arising out of bonus/split/consolidation/merger etc. Holding investments in equity
and debt instruments in a single account.

OBJECTIVES OF DEMATE :
OBJECTIVES OF DEMATE India has adopted this system in which book entry is done electronically. It is
the system where no paper is involved. Physical form is extinguished and shares or securities are held in
electronic mode. Before the introduction of the depository system by the Depository Act, 1996, the process
of sale, purchase and transfer of shares was a huge problem and the safety perspective was zero.

BENEFITS TO COMPANY :
BENEFITS TO COMPANY The depository system helps in reducing the cost of new issues due to less
printing and distribution cost. It increases the efficiency of the registrars and transfer agents and the
Secretarial Department of the company. It provides better facilities for communication and timely services
with shareholders, investor etc. Benefit to the Investor The depository system reduces risks involved in
holding physical certificated, e.g., loss, theft, mutilation, forgery, etc.

DISADVANTAGE OF DEMATE :
DISADVANTAGE OF DEMATE The disadvantages of dematerialization of securities can be summarized as
follows: Trading in securities may become uncontrolled in case of dematerialized securities. It is incumbent
upon the capital market regulator to keep a close watch on the trading in dematerialized securities and see
to it that trading does not act as a detriment to investors. The role of key market players in case of
dematerialized securities, such as stock-brokers, needs to be supervised as they have the capability of
manipulating the market.

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Multiple regulatory frameworks have to be confirmed to, including the Depositories Act, Regulations and the
various By-Laws of various depositories. Additionally, agreements are entered at various levels in the
process of dematerialization. These may cause anxiety to the investor desirous of simplicity in terms of
transactions in dematerialized securities. However, the advantages of dematerialization outweigh its
disadvantages and the changes ushered in by SEBI and the Central Government in terms of compulsory
dematerialization of securities is important for developing the securities market to a degree of advancement

OPENING A DEMATE ACCOUNT :

OPENING A DEMATE ACCOUNT Steps involved in opening a demat account First an investor has to
approach a DP and fill up an account opening form. The account opening form must be supported by copies
of any one of the approved documents to serve as proof of identity (POI) and proof of address (POA) as
specified by SEBI. Production of PAN card in original at the time of opening of account has been made
mandatory effective from April 1, 2006.

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All applicants should carry original documents for verification by an authorized official of the depository
participant, under his signature. The investor has to sign an agreement with DP in a depository prescribed
standard format, which details rights and duties of investor and DP. DP should provide the investor with a
copy of the agreement and schedule of charges for their future reference. The DP will open the account in
the system and give an account number, which is also called BO ID (Beneficiary Owner Identification
number). The DP may revise the charges by giving 30 days notice in advance

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. SEBI has rationalized the cost structure for dematerialization by removing account opening charges,
transaction charges for credit of securities, and custody charges vide circular dated January 28, 2005.

Transfer a Share between DPs :

Transfer a Share between DPs To transfer shares, we need to fill the Depository Instruction Slip Book (DIS).
We need to check, whether both Demat account's Depository Participant is same or not(CDSL or NSDL) If
both of them are different, then we need an INTER Depository Slip (Inter DIS). If they are same, then we
need INTRA Depository Slip (Intra DIS). For example: If we have one Demat account with CDSL and other
Demat account with NSDL, then we need an Inter DIS. Generally, brokers issue Intra DIS, so do check with
broker. Once we identify the correct DIS, fill the relevant information

WHAT IS CSDL? :
WHAT IS CSDL? CSDL(CENTRAL DEPOSITORY SERVICE (INDIA) LTD.) was set up with the objective of
providing convenient, dependable and secure depository services at affordable cost to all market
participants. Some of the important milestones of CDSL system are: CDSL received the certificate of
commencement of business from SEBI in February, 1999. Honourable Union Finance Minister, Shri
Yashwant Sinha flagged off the operations ofCDSL on July 15, 1999. All leading stock exchanges like the
National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock As at the end of Dec
2007, over 5000 issuers have admitted their securities (equities, bonds, debentures, commercial
papers)units of mutual funds, certificate of deposits etc. into the CDSL system.

WHAT IS NSDL? :
WHAT IS NSDL? NSDL(NATIONAL STOCK DEPOSITORY LIMITED) Although India had a vibrant capital
market which is more than a century old, the paper-based settlement of trades caused substantial problems
like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996
paved the way for establishment of NSDL, the first depository in India. This depository promoted by
institutions of national stature responsible for economic development of the country has since established a
national infrastructure of international standards that handles most of the securities held and settled in
dematerialized form in the Indian capital market.

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Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the
capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by
developing settlement solutions that increase efficiency, minimize risk and reduce costs. At NSDL, we play a
quiet but central role in developing products and services that will continue to nurture the growing needs of
the financial services industry.

Features on HDFC Securities Online trading :

Features on HDFC Securities Online trading Seamless Transactions - By integrating your accounts, we
ensure minimal waste of time during movement of your funds and shares. Speed - Orders are placed
electronically, so proceeds are available instantly. No manipulation - To prevent any mismanagement, we
will send you an email confirmation, the minute your order is executed. Safety and Security - HDFC
Securities offer the highest level of security such as 128-bit encryption technology. Dedicated and Separate
contact numbers - for trading over the phone as well as for customer care.

Document required for opening account HDFC sec. :

Document required for opening account HDFC sec. Any Indian resident/non resident individual NRI (except
for the US NRIs) or an Indian Corporate can register with HDFCsec. However, to become a member, you
will have to open savings/current and demat accounts with HDFC Bank. Following documents are required
to open accouunt with HDFCsec One passport size photograph. Copy of PAN card. Identity proof - copy of
passport or PAN card or voter ID or driving license or ration card. Address proof - copy of driving license or
passport or ration card or voter card or telephone bill or electricity bill or bank statement.

Brokerage and fees :

Brokerage and fees Rs. 799/- (Including trading account, bank account and DP account with HDFC)Please
note: HDFC Bank savings account required a quarterly minimum balance of Rs. 2,500/-. If you already have
Saving account or DP account with HDFC, you could link them with trading account

ICICI Securities :
ICICI Securities

How to open account with ICICI Direct? :

How to open account with ICICI Direct? For Online Stock Trading with ICICI, investor needs to open 3
accounts...ICICI Bank Account, ICICI Direct Trading Account and ICICI Demat Account (DP Account).
Opening trading account with ICICI is easy. You could use one of the following options to open account with
ICICIDirect.

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Call ICICI and tell them that you are interested in opening an account with them. In both the cases ICICI
representative contact you in a day or two and tell you about the procedure to open the account. They
usually send somebody to your home to collect documents, signature and for demo if required

Brokerage and fees :

Brokerage and fees Account opening fees : Rs 750/- (One time non-refundable) Brokerage : brokerage
varies on volume of trade and inclusive of demat transaction charges, service taxes and courier charges for
contract notes. It ranges from 0.1% to 0.15% for margin trades, 0.2% to 0.425% for squared off trades and
0.4% to 0.85% on delivery based trades.

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THANKS FOR YOUR ATTENTION