31 Points
Joined May 2007
Is a demat account a must?
Nowadays, practically all trades have to be settled in dematerialised form.
Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more.
So a demat account is a must for trading and investing.
Where do I begin?
- Look for a DP to have an account with
Most banks are also DP participants, as are many brokers.
You can choose your very own DP.
To get a list, visit the NSDL and CDSL websites and see who the registered DPs are.
A broker is separate from a DP. A broker is a member of the stock exchange, who buys and sells shares on his behalf and on behalf of his clients.
A DP will just give you an account to hold those shares.
You do not have to take the same DP that your broker takes. You can choose your own.
But many brokers offer special incentives in the form of lower charges for opening demat accounts with their DPs.
Full article can be accessed at https://www.rediff.com/getahead/2005/jan/31demat.htm