| Q. |
Primary Terms? |
| A. |
The main terms used in the depository system are narrated below:
Depository = Depository is an entity incorporated under the Companies Act, 1956, which has been authorized by SEBI to act as depository. Currently there exist 2 main depositories, namely The National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL). The main depository is akin to RBI in the banking system.
DP = Depository Participant. A DP has to compulsorily be registered with SEBI and can be a participant either of NSDL or CDSL. DPs are akin to Banks in the banking system and maintains securities account in place of money account.
DP ID = Every DP registered with SEBI will have a unique registration number and it is known as DP ID.
Client ID = This is also known as Beneficiary Account /Demat Account number. Like a bank account for money, whenever a security account is opened with any DP, an account number is allotted by the DP is known as Client ID / Beneficiary Account /Demat Account number.
DRF = Dematerialisation Request Form = This form has to be filled in triplicate and submitted to the DP along with the certificate for converting physical securities into electronic form. DRF can be obtained from the concerned DP.
Delivery Instruction Books (DIB) = These slips are to be used for debiting the account with the number of securities sold / transferred. DPs issue pre-printed DIB containing the names of the account holders and the Client ID, to its clients. Investors are advised to use pre-printed DIB and keep the same in safe custody. |
| Q. |
ISIN |
| A. |
ISIN stands for International Security Identification Number. Every security in the depository is allotted a unique identification number called ISIN. The ISIN allotted to G E SHIPPING equity share is INE 017A01024.
Shares are traditionally held in physical or paper form. Holding / trading of shares in physical form has certain drawbacks and the said drawbacks are either fully eliminated or minimized largely in the electronic form of holding or trading in shares. Dematerialisation is the process of converting securities held in physical form into electronic form.
Holding shares and other securities in dematerialised (electronic) form has inter-alia the following advantages:
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Speedy execution of transactions viz. sale, purchase, transfer, transmission etc. |
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Genuineness of the securities held - no risk of holding fake certificates. |
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Less paper work resulting in timely cost savings. |
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No stamp duty hence cost savings. |
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Risk of bad delivery eliminated. |
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Immediate effect to allotment / credit in case of Bonus / Right Issues. |
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| Q. |
How do I demat my shares? |
| A. |
When you decide to convert your securities held currently in physical form to electronic form, you should approach any DP and open a demat account. You will be allotted a Client ID. Thereafter one should surrender the share certificates to ones DP by filling the DRF. On receipt of the DRF the DP generates the Demat Request Number (DRN) and thereafter will arrange to get the certificate along with the DRF sent to the Company/Share Registrar. The Company/ Share Registrar after due verification confirm the DRN and upon confirmation, the number of securities dematerialised are credited in electronic form to the respective demat account. This process is termed as de-materialisation. One can always reverse this process if one so desires and get the shares reconverted into paper form. This process is termed as re-materialisation. |
| Q. |
How can I deal with shares held in electronic form? |
| A. |
Share transactions (like sale or purchase and transfer/transmissions etc.) in the electronic form can be effected in a much simpler and faster way. Like in physical form, sale of securities in electronic form in the Share Exchange has to be carried through a registered broker. After the sale is confirmed by the broker the seller is required to give debit instruction to his DP for debiting the number of securities sold, by filling the Delivery Instruction (DIB).
In case of purchase of securities, after the payout the broker will ask his DP to debit his account and credit the Client account of the purchaser with the number of shares purchased. |
| Q. |
What are the charges to be paid for dematting the physical shares and who will bear such cost? |
| A. |
The charges to be borne by the investors are for dematerialisation/ maintaining demat account, transaction charges involving sale/purchase etc. These charges are market determined differ from DP to DP and are usually debited to the designated bank account of the investors. |
| Q. |
How do I get my dividends on dematted shares? Will I get the Annual Report after I demat my shares and would I be able to attend the AGM? |
| A. |
The Company will get a download of data of beneficiaries holding shares of the Company in demat form as on a record date. On the basis of this data the Company will send the notice of the meeting, annual report and corporate benefits like dividend/right/bonus etc.
The rights of the shareholders holding shares in Demat form are at par with those holders in physical form. |
| Q. |
What are the chances of any fraud / disputes in using a Demat account? Whom should I approach in such cases? |
| A. |
Common risk factors associated with to trading in physical shares like mismatches in signatures, loss in postal transit etc., are absent since the dematted shares are traded in scrip less mode.
However in the unlikely event of any other dispute, the concerned Share Exchange and/or Depository Participant, Depository Custodian viz. NSDL/CDSL or SEBI would need to be approached for resolving specific issues. |
| Q. |
Can I pledge my shares in demat form for the purpose of availing any funding/loan arrangement with my bankers? |
| A. |
Pledge of shares in demat mode is very simple. All one has to do is to submit the dully filled in Pledge Creation Form (Form W/ Exhibit 15) to ones DP. |
| Q. |
Whom should I contact for queries regarding my demat account? |
| A. |
As your demat account is maintained by the DP, any communication/ intimation regarding change in address, change in bank account details, ECS mandate, registration of nominees etc. as also any query with regard to the demat account should be made to ones DP. Since the Company / Share Registrar has no access to ones depository account any request regarding any of the above subject would be futile. |
