It is apparent that technology has brought about a great change in the daily lives of people. Even the stock markets have not been left untouched by the dynamic changes. In 1875, the Bombay Stock Exchange was established with an open uproar floor trading exchange. If you know or heard of, traders used to stand on floor therein and shout the costs of stocks for buying or vending.
Then once it was done, money used to get exchanged for the physical receipts of shares that are called the certificate. This is something that led to a massive amount of paperwork. Even the payments of all the trade agreements took some time because of requirement to cater share certificates. Then in year 1996, dematerialization was enthralled. Talking about dematerialization, it is the procedure through which physical share certificates detained by an investor is converted into an equal number of securities in the electronic format and then it gets credited into the demat account of investor.
Now if you talk about present, you can avail a Demat Account for all your stocks and shares. These accounts were introduced in the country in the year 1996. Prior to this shares and securities were physically delivered and traded. These securities are now easily available to hold electronically through these accounts of demat. It is something that makes the entire procedure of investing, monitoring, holding and trade, convenient, quick and cost efficient. You can find people having accounts and managing their shares and all.
What are the features of these accounts?
There are different types of features in these accounts and some of the main ones are as under:
Convenient Share Transfers
Investors can easily transfer their holdings via a delivery instruction slip (DIS) or even the receipt instruction slip (RIS) for purchasing or selling shares. These slips permit the users to cater all the particulars that are needed for executing a transaction in a smooth manner.
Quick Dematerialization & Re-materialization of Securities
The account holders can easily provide instructions to their depository participant (DP) to convert the physical certificates into electronic shape. Similarly, electronic securities can also get reconverted to physical shape, in case the need arises.
Promising facility to gain loan
There are many lenders out there who provide loans against securities that are held in the Demat account of the borrowers. These holdings are apparently used as security to gain loans by the account holders.
It might interest you that the account holders can even freeze their accounts for a specific period. It is only as per the needs of the account holder. This is the option that can be beneficial only if a person wants to avert unexpected credit or debit into one’s Demat account. Icing on the cake is that the freezing option is also there for a particular quantity of securities held in account.
Thus, these were a few of the many features of these accounts. If you are getting in the world of stocks and shares then these accounts are going to be your companions. Pick an account carefully!