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What is meant by Demat Account?
  • a)
    Development Market Account
  • b)
    Depository Participant Account
  • c)
    Dematerialisation of of Securities
  • d)
    Demand Depository Account
Correct answer is option 'C'. Can you explain this answer?
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What is meant by Demat Account?a)Development Market Accountb)Depositor...
Demat Account is an account that is used to hold shares and securities in electronic format. The full form of Demat account is a dematerialised account. ... The charges of Demat account vary as per the volume held in the account, type subscribed, and the terms and conditions laid by the depository and the stock broker.
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What is meant by Demat Account?a)Development Market Accountb)Depositor...
What is a Demat Account?
A Demat account, short for "Dematerialized Account," is a digital account that holds securities such as shares, bonds, and mutual funds in an electronic format. This modern approach to managing investments has transformed the way investors conduct transactions in the stock market.
Key Features of a Demat Account:
  • Dematerialization of Securities: The primary function of a Demat account is to facilitate the dematerialization of physical securities. Investors can convert their physical share certificates into electronic form, making it easier to buy, sell, and manage investments.
  • Security and Convenience: Holding securities in a Demat account reduces the risk of theft, loss, or damage associated with physical certificates. It also simplifies the transaction process, allowing for quick buying and selling of shares.
  • Easy Access: Investors can view their holdings and transaction history online, offering real-time access to their investment portfolio.
  • Lower Transaction Costs: Operating a Demat account typically incurs lower fees compared to traditional methods, making it a cost-effective option for investors.

Importance of a Demat Account:
  • Facilitates Smooth Transactions: The electronic format enables faster transactions, ensuring efficiency in the buying and selling process.
  • Record Keeping: A Demat account provides a consolidated view of all securities held, aiding in better financial planning and management.
  • Mandatory for Trading: In many markets, a Demat account is a prerequisite for trading in shares, making it an essential tool for investors.

In conclusion, a Demat account is crucial for modern investors, enabling the dematerialization of securities and offering a plethora of benefits, enhancing the overall investment experience.
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Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. By not converting and transferring the shares to the investors’ Demat Account, i.e., electronic form, which process was not followed?

Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. Identify the step of trading procedure in a stock exchange which has not been followed by “Unicon Securities Pvt. Ltd.”.

Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. Identify the function of SEBI being stated in paragraph.

Direction: Read the following text and answer the questions given below:“Unicon Securities Pvt. Ltd.” was established to deal in securities. It was registered as a stockbroker with National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) to trade in securities listed at these exchanges. It is also a depository participant with CDSL and NSDL. In the first three years, it developed its business successfully. After that, the composition of Board of Directors changed. Some customers complained to the customer care centre of the company that shares purchased by them and for which the payment has been duly made, were not transferred to their Demat Accounts by “Unicon Securities Pvt. Ltd.”. The executive of customer care centre promised the aggrieved customers that their shares will be transferred to their respective Demat Accounts very soon. But the company delayed the matter and didn’t transfer the shares of the customers to their Demat Accounts. This eroded investors’ confidence and multiplied their grievances. On regular inspection and by conducting enquiries of the brokers involved, the Securities and Exchange Board of India (SEBI) was able to detect this irregularity.Q. Which apex statutory body of capital market inspected and conducted enquiries in order to detect irregularities?

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What is meant by Demat Account?a)Development Market Accountb)Depository Participant Accountc)Dematerialisation of of Securitiesd)Demand Depository AccountCorrect answer is option 'C'. Can you explain this answer?
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