What is a demat account, how to open it?

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Public participation in the stock market has been increasing in recent times. As of July of the last fiscal year, the number of beneficiary accounts (demat account) which was around 3.7 million has exceeded 5.5 million so far. Currently, 5 million 54 thousand more have opened demat accounts.

What is a demat account?

Depositing share certificates and other securities by opening a bank account is called dematerialization or dematerialization of shares. Such an account is also called a beneficiary account. After dematerializing the physical share certificate you have, you do not need the share certificate paper, it is in the demat account with the bank.This will make it easier to buy and sell shares, speed up the purchase and sale and the bonus shares and entitled shares received will be credited directly to the beneficiary’s account. Therefore, you do not have to go to the company to get the certificate of such shares.

How to open a demat account?

To open a demat account, one must first go to the demat account opener (DP) with a photo of the investor and a copy of his citizenship. Banks, financial institutions, merchant bankers or broker companies that have taken membership of CDS and Clearing Company with the permission of Nepal Securities Board act as Depository Member (DP) by fulfilling certain criteria. There are currently 60 such organizations.

Separate demat account according to the company

Demat request forms should be submitted separately according to the company. After filling the form, the share certificate of the company should be handed over to the company having demat account i.e. DP. The demat request form taken from the customer is sent by the DP to the share registrar and from there it is credited to the account after verification.As soon as the account is opened, the DP gives the customer a delivery instruction slip like a check book. When you have to sell shares, you have to fill in the slip of which company to sell how many shares. Such slips should not be lost after filling. If the lost slip is lost, anyone who receives it can do business. If such slip is lost, you should immediately inform CDS & Clearing.

If a company is about to issue rights shares, but the shareholder has not deposited the shares of that company in the DP account, then the company must first inform the shareholder that the shareholder has opened a DP account. After filling in the form of entitled shares and mentioning the depository participant and beneficiary owner ID number, the shares are directly credited to the investor’s account.

Demat account without share

You can open a demat account even if you do not have shares in any company. After opening a demat account, take the demat request form for share trading and in the ISIN section of the table, mention the ISIN code of the company whose shares are to be placed. The ISIN signal varies from company to company.This signal varies according to the category of general, founder, and preferred shares of the same company. This hint can be found by asking the demating company.

You can open more than one account

To open a beneficiary account, Rs. If you have to pay Rs. It takes 100. Investors can also open an account through more than one DP. When opening a separate account, the initial fee and the annual fee should be paid to all. Even if the account details of the investor remain the same, the account number is different.

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