XVII Annual International Seminar Proceedings; January, 2016

“AN

ANALYTICAL

STUDY

OF

DEMAT

ACCOUNT-WITH

REFERENCE TO SHARE KHAN”
Dr. Moloy Ghoshal
ASSOCIATE PROFESSOR
DSPSR

Maninder Bedi
Student, BBA
DSPSR

INTRODUCTION
In India, shares and securities are held electronically in a dematerialized (or "Demat")
account, instead of the investor taking physical possession of certificates. A Dematerialized
account is opened by the investor while registering with an investment broker (or subbroker). 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 shares. In india, shares and securities are held
electronically in a dematerialized (or "Demat") account, instead of the investor taking
physical possession of certificates. A Dematerialized account is opened by the investor while
registering with an investment broker (or sub-broker). 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 shares.

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.

ISBN no. 978-81-923211-8-9

http://www.internationalseminar.in/XVII_AIS/INDEX.HTM

Page 980

In India. s e l l a n d t r a n s a c t s h a r e s w i t h o u t t h e e n d l e s s paperwork and delays. January. T h i s a c c o u n t i s p o p u l a r i n India. Is a demat account a must? Now a. the abbreviation for dematerialized account.internationalseminar. Although the market regulator. and the deadline for submission of PAN details to the depository lapsed on January 2007. It is also safe. day. i t b e c a m e m a n d a t o r yt h a t a n yp e r s o n h o l d i n g a f o r d e m a t a c c o u n t s h o u l d possess a Permanent Account Number(PAN). As of April2 0 0 6 .in/XVII_AIS/INDEX.has allowed trades of up to 500 shares to be settled in physical form.HTM Page 981 . the Securities and Exchange Board of India (SEBI). practically alltrades have to be settled and d e m a t e r i a l i z e d f o r m . 978-81-923211-8-9 http://www. 2016 Share khan Demat Accounts Overview of DematAccount : D e m a t a c c o u n t a l l o w s yo u t o b u y. ISBN no. is a typeof banking account which dematerializes paper-based physical stock shares.XVII Annual International Seminar Proceedings. ademat account. T h e Securities and Exchange Board of India(SEBI) mandates a demat account for share trading above 500 shares. T h e dematerialized account is used to avoid holding physical shares: the shares are bought and sold through astock broker. secure and convenient.

postal delays a n d l o s s of certificates in transit. Example: let’s say your portfolio has 100 of SATYAM. e n a b l e s q u i c k o w n e r s h i p o f s e c u r i t i e s o n s e t t l e m e n t r e s u l t i n g i n i n c r e a s e d l i q u i d i t y. counterfeiting and loss due to fire. makes pledging/hypothecation of s h a r e s e a s i e r . it eliminates risks associated with forgery.internationalseminar. yo u n e e d t o o p e n a d e m a t a / c i f yo u w a n t t o b u y o r s e l l stocks. a v o i d s c o n f u s i o n i n t h e o w n e r s h i p t i t l e of securities and provide easy receipt of public issue allotment. What is dematerialization? Dematerialization is the process by which physical certificates of an investor areconverted to an equivalent number of securities in electronic form and creditedinto the investor’s account With his/her dp. It also helps you avoid bad deliveries caused by signature mismatch. Demat accountholders can also avoid stamp duty (as against 0. All these will show in you’re a/c. theft or mutilation. The account opening form must be supported by copies of any one of the approved ISBN no. Steps involved in opening a demat account : First an investor has to approach a DP and fill up an account opening form. so you don’t have to possess any physical certificate that you own these shares. 978-81-923211-8-9 http://www.XVII Annual International Seminar Proceedings.in/XVII_AIS/INDEX.HTM Page 982 . 200 of IBM and 120 of TCS shares. make c h e q u e p a ym e n t s e t c . avoid filling up of transfer deeds. 2016 nobody wants physical shares any more. So it just like a bank a/c where actual money replaced by shares . January. So a demat account is a must for trading and investing. Why DEMAT a/c likes a BANK a/c? Just as you have to open an a/c with a bank if you want to save your money. Further. Why demat? The demat account reduces brokerage charges. They all are held electronically in you’re a/c. and obtain quick receipt of such benefitsas stock splits and bonuses.5 per cent payable on physicalshares).

2016 documents to serve as proof of identit y (POI) and proof of address (POA) as specified by SEBI. no charges shall be levied by a depository on DP a n d consequently. SEBI has vide circular dated November 09. January. p r o v i d e d t h e B O A c c o u n t /s at transferee DP and at transferor DP are one and the same. DP should provide the investor with a copy of the agreement and schedule of charges for their future reference. production of PAN card in original at the time of opening of account has been made m andatory effective from April 01. ISBN no. 2005 advised that with effect f r o m January 09. 2006. In case the BO Account at transferor DP is a joint account. under his signature. All applicants should carry original documents for verification by an authorized official of the depository participant. Besid es. 978-81-923211-8-9 http://www. Rights:  You can open more than one depository account in the same name w i t h single DP/ multiple DPs. the investor has to sign an agreement with DP in a depository prescribed standard format. The DP may revise the charges by giving 30daysnotice in advance. 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 o f t h e s a m e d e p o s i t o r y o r a n o t h e r d e p o s i t o r y.internationalseminar. The DP will open the account in the system and give an account number. i d e n t i c a l i n a l l respects. the BO Account at transferee DP should also be a joint account in the same sequence of ownership. which is also called BO ID (Beneficiary Owner Identification number). Further.XVII Annual International Seminar Proceedings.HTM Page 983 . 2006. and custody charges vide circular dated January 28. 2005. which details rights and duties of investor and DP. i. SEBI has rationalized the cost structure for dematerialization by removing account opening c h a r g e s . transaction charges for credit of securities.in/XVII_AIS/INDEX.  No minimum balance is required to be maintained in a depository account. Further.e.

 No odd lot problem . theft etc.5 per cent payable on physical shares) and filling up of transfer deeds.  Immediate transfer of securities. A demat account also helps avoid problems typically associated with physical share certificates.  No stamp duty on transfer of securities (0. Disadvantages of Demat  Trading in securities may become uncontrolled in case of dematerialized securities. For example: delivery failures caused by signature mismatch. January. ISBN no. 978-81-923211-8-9 http://www.internationalseminar.  Eliminationof risks associated with physical certificates s u c h a s b a d delivery. These may cause worries to the investor desirous of simplicity.  Reduction in transaction cost.. fake securities .  Agreements are entered at various levels in the process of dematerialization. delays . it eliminates the risks associated with Forgery and due to damaged stock certificates.  Nomination facility. .  Reduction in paper work. Transaction costs are usually lower than that in the physical segment. DEMAT Benefits?  A safe and convenient way to hold securities.5 % on physical shares).HTM Page 984 .  Holding investment in equity and debt instruments in a single account etc. Further. postal delays and loss of certificate during transit. Advantages of demat The bonus/right shares allotted to the investor will be immediately credited into his account. even one share can be sold.There is no risk due to loss on account of fire.in/XVII_AIS/INDEX.XVII Annual International Seminar Proceedings. theft or mutilation. Demat account holders also avoid stamp duty (as against 0. The biggest advantage of having demat account is that you don't have to pay for stamp since these are electronically stored which reduces the transaction cost. 2016  You can give a onetime standing instruction to your DP to receive all the credits coming to your depository account automatically.

many Indian investors don't close their dp account.  Analysing the preferred broking house.  Checking the satisfaction level of the customers towards preferred brokinghouse.in/XVII_AIS/INDEX. RESEARCH METHODOLOGY: ISBN no. Documents Required For De-mat Account To open a De-mat account you have to provide documents which fulfill the requirements of KYC (Know Your Customer) norms. Angel broking. Generally the documents are:  PAN (Compulsory)  Bank statement (last 3 months)  Address Proof  Income Tax Return  Two colour photos  Bank crossed Cheque (If required)  KYC details OBJECTIVE OF STUDY The primary objective is:  Checking the awareness level of online share trading.XVII Annual International Seminar Proceedings. 2016  After liquidating the holdings. Religare. They are unaware that DPs charge even on dormant accounts.Unicon. India bulls. India info line.internationalseminar. 978-81-923211-8-9 http://www.g. You have to sign a contract with Stock broker. Alan .  To collect the real time information about preference level of customers using de-mat account and their inclination towards various other brokerage firms e. January.kit.HTM Page 985 .

HTM Page 986 .  Get the knowledge of technical as well as fundamental methods.and hence.internationalseminar. Methodology of the project starts with –  In the first phase we are trained and they teach us different things about market. in this they ask about the real life problem faced by the customers.  Then after that we have to provide details of product and convincethem. time and other resources at the disposal of the researcher. it becomes necessary to collect data that is appropriate. Primary data collection: In dealing with real life problem it is often found that data at hand are inadequate.Secondary sources of data: In the secondary sources of data is used. large ISBN no.  After that they conduct a mock viva. METHODS OF DATA COLLECTION In the project work Primary data secondary data (both) sources of data has been used: 1. books. magazine.  They provide leads and after that we make calls. Secondary data is data collected and possibly processed by people other than the researcher in question.in/XVII_AIS/INDEX. (Internet.XVII Annual International Seminar Proceedings.Primary data can be collected through survey. journals) In research.  Observe the patterns of the scripts.one can also define research methodology as a scientific and systematic search for required information on a specific topic. Common sources of secondary data for social science include censuses.  Maintaining dairy of clients and contacting them at regular basis. The word research methodology comes from the word “advance learner ‘s dictionary meaning of research as a careful investigation or inquiry especially through research for new facts in my branch of knowledge for example some author have define research methodology as systematized effort to gain new knowledge. January. There areseveral ways of collecting the appropriate data which differ considerably in context of money costs. 2016 INTRODUCTION Research Methodology refers to search of knowledge . 978-81-923211-8-9 http://www. 2.  Then we have to visit them and get the formed filled from them.

  Lack of Techno Savvy people and poor internet penetration: Since most of the people are quite experienced and also they are not technosavvy.in/XVII_AIS/INDEX. January. Also Internet penetration is poor in India.HTM Page 987 .internationalseminar.  Some people are comfortable with traditionalsystem:  As people are doing trading from their respective brokers. In terms of historical research. and organizational records. LIMITATION  Lack of awareness of capital market  Since the area is not known before it takes lot of time in convincing people tostart investing in shares primarily in IPO’s. In sociology primary data is data you have collected yourself and secondary data is data you have gathered from primary sources to create new research. 978-81-923211-8-9 http://www. these two terms have different meanings. A secondary source is a summary of a book or set of records.they a r e q u i t e comfortable to trade via physical form of paper. Have you heard about demat account? Heard about demat account Percentage of respondent Yes 70% No 30% ISBN no.XVII Annual International Seminar Proceedings. A primary source is a book or set of archival records. DATA ANALYSIS AND INTERPRETATION Q1. 2016 surveys.

2016 result of percentage of people about demat account 1st Qtr 2nd Qtr YES-70% NO-30% Q2.HTM Page 988 .XVII Annual International Seminar Proceedings. In which of these Financial Instruments do you invest into? Financial Instrument Percentage of respondent Mutual Fund 75% Bond 16% Online trading 7% Derivative 2% ISBN no. 978-81-923211-8-9 http://www.internationalseminar. January.in/XVII_AIS/INDEX.

January. with a more transparent system.HTM Page 989 .in/XVII_AIS/INDEX. investment in the Stock Market can definitely be increased. the most favored investment continues to be in the Share Market. So. 978-81-923211-8-9 http://www.internationalseminar.XVII Annual International Seminar Proceedings. Q3. Are you aware of online Share trading? Aware of online share trading Percentage of respondent Yes 72% ISBN no. 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Result of Preference of Investment  Mutual fund-75%  Bond-16%  Online Trading-7%  Deivativre-2% Interpretation This shows that although the mutual funds market is on the rise yet.

January.XVII Annual International Seminar Proceedings. 2016 No 28% 1st Qtr 2nd Qtr  YES-72%  NO-28% Interpretation: With the increase in cyber education.? Awareness of Sharekhan ltd. percentage of respondent YES 70% NO 30% ISBN no.in/XVII_AIS/INDEX. Q4. the awareness towards online share trading has increased by leaps and bounds. 978-81-923211-8-9 http://www. Heard about Sharekhan ltd.internationalseminar.HTM Page 990 . This awareness is expected to increase further with the increase in Internet education.

Do you know about the facilities provided by Sharekhan ltd.XVII Annual International Seminar Proceedings. 978-81-923211-8-9 http://www. January. services Percentage of respondent YES 36% NO 64% ISBN no.in/XVII_AIS/INDEX.internationalseminar.? Awareness of sharekhan ltd. 2016 Awareness of sharekhan ltd. Q5. 1st Qtr 2nd Qtr 70% YES 30% NO Interpretation: This pie-chart shows that this brand image should be further leveraged by thecompany to increase its market share over its competitors.HTM Page 991 .

January. the company should concentrate more towards promotional tools and increase its focus on product awareness rather than brand awareness. services 1st Qtr 2nd Qtr YES – 64% NO – 34% Interpretation: Although there is sufficiently high brand equity among the target audience yet. 978-81-923211-8-9 http://www.XVII Annual International Seminar Proceedings.HTM Page 992 .6Which company provide a less BROKARAGE rate? Company Name Percentage of Respondent Sharekhan ltd. 2016 Result of awareness of sharekhan ltd. that. it is to be noted that the customers are not aware of the facilities provided by the company meaning thereby.internationalseminar. Q. 22 HDFC 11 ICICI 17 ISBN no.in/XVII_AIS/INDEX.

978-81-923211-8-9 http://www..HTM Page 993 . HDFC ICICI INTERPRTETATION: 44% have respondent of Sharekhan ltd. January. 34% have respondent of ICICI. ISBN no. 2016 25 20 15 10 5 0 Sharekhan ltd.XVII Annual International Seminar Proceedings.internationalseminar.in/XVII_AIS/INDEX. 22% have respondent of HDFC.

978-81-923211-8-9 http://www. 4. Preference of Investment: Consumers want to invest 75% in Mutual funds.XVII Annual International Seminar Proceedings.: 70% consumers are know about Sharekhan ltd.: 36% consumers are aware about the facilities provided by Sharekhan ltd.Provide a less BROKARAGE rate: ISBN no. 7% inonline trading and 2% in Derivatives.in/XVII_AIS/INDEX. 5.and 64% consumers are not know about the facilities provided bySharekhan ltd. and 30% consumers arenot know about Sharekhan ltd. 2016 FINDINGS 1. Awareness on Online Share Trading: 72% consumers are aware of online share trading and 28% consumersarenot aware of online share trading.internationalseminar. 2. 3. Awareness of Sharekhan ltd. January.HTM Page 994 .Awareness about facilities provided by Sharekhan ltd. 16% in Bonds.

sharekhan./company-snapshot. References Websites:  https://www.slideshare.htm  ww.htm  www. Study also concludes that people are not much aware of commodity market andwhile it’s going to be biggest market in India.34% have respondent of ICICI.com/research/stocks/private/snapshot..sharekhan. The company should also organize seminars and similar activities to enhance theknowledge of prospective and existing customers.XVII Annual International Seminar Proceedings.com/Trade Tiger  www. so that they feel morecomfortable while investing in the stock market.com/sfsl/finance.com/businesspartner/howtopartner.internationalseminar.bloomberg./company-snapshot.aspx  www.htm  www..htm  www..com/Brochures/74/PMSProductHome.com/stock-market/company. 978-81-923211-8-9 http://www.sharekhan. 22% have respondent of HDFC.in/XVII_AIS/INDEX.net/gandhichintan/project-report-of-share-khan  www.sharekhan. CONCLUSION AND RECOMENDATIONS On the basis of the study it is found that Sharekhan Ltd is better services provider than the other stockbrokers because of their timely research and personalizedadvice on what stocks to buy and sell. It also provides the information through the internet andmobile alerts that what IPO’s are coming in the market and it also provides itsresearch on the future prospect of the IPO.com/AboutUs/AboutUs.scribd.  www.htm ISBN no. Awareness of demat account: 70% of people have heard about demat account and 30% of people are not aware of de-mat account. January.asp?privcapId. 2016 44% have respondent of Sharekhan ltd.com/stock-market/company.HTM Page 995 . provide the facility of Tradetiger as well as relationship manager facility for encouragement and protect theinterest of the investors. 6..sharekhan. Sharekhan Ltd.com/doc/31134020/Share-Khan  www..sharekhan.sharekhan.

2016 BOOKS:  Marketing research bydavid j. jr. rubin :7 edition  Market research by gcbery: 4 edition  Marketing research by harper w.Ronald s. Stanley f. stasch: 7 edition ISBN no. boyd.XVII Annual International Seminar Proceedings. luck .in/XVII_AIS/INDEX. January.internationalseminar.HTM Page 996 . ralph westfall. 978-81-923211-8-9 http://www.