What is a Demat Account? - Learn and Ready to Invest in Share Market:
What is a Demat account?: A Demat account is like a bank account. To open such an account, one can go to the company which has got permission from the Securities and Exchange Board for depository membership (depository participant and DP) services.
Currently, securities brokers, banks and financial institutions, merchant bankers, transfer representatives, and other organizations are operating such services with the permission of the Securities and Exchange Board. You can open a 'Demat' account by going to a company that suits you. For which a photocopy of the citizenship of the concerned person and two passport size photos are required. For minors, a birth certificate is required along with the citizenship of the guardian. Previously purchased shares were available as physical (paper) certificates. Now that the system has been removed, it is now electronically credited to the Demat account.
When opening a Demat account, the company concerned gives a checkbook like a bank. When selling shares, the check should be deducted. In case of purchase, the shares are credited to the investor's Demat account. For the same reason, the Demat account has been made mandatory for all types of share transactions. Paper shares should also be dematerialized only after the commencement of trading of dematerialized shares. Only then is it eligible for business.
Loans are also available from banks and financial institutions to invest in shares. At present, banks and financial institutions have been giving loans in two ways by keeping share pledge and under the guarantee of broker (without share pledge).
For a loan obtained by pledging shares, the investor has to pledge a share certificate (currently a certified document of shares in a Demat account). The same interest rate is not available on loans provided by banks and financial institutions for the purchase of shares. Investors who do regular banking, have a regular source of income and have shares in good companies get loans at some cheaper interest rates. Other investors have to pay some higher interest rates. When taking a loan from a bank or financial institution for investment in shares, photocopy of citizenship, pledged shares, certification of shares in Demat account through DP company, and other documents required by the bank are required.
Intangible shares (the process of converting Demat shares into electronic form) have been traded in the Nepali stock market since last year. Only Demat shares are being traded with the objective of making the share market systematic, transparent, safe, and modern by minimizing various hassles while trading in physical (paper) shares. As soon as this arrangement is implemented, the shares that are currently in the primary issue are available in Demat form. The shares now available here are directly credited to their Demat account. Therefore, a Demat account is mandatory while filling the share form. If you want to invest in shares, you have to open such an account. Which requires a CRN number. Banks and financial institutions with accounts provide CRN numbers. Now it has been made mandatory.
More than 2.5 Millions Demat Account Holders in Nepal:
According to CDS and Clearing Limited, a total of 2.53 million people have opened Demat accounts so far. The CDSCL has also stated that with the recent increase in the attraction of investors in the stock market, the pressure of those opening Demat accounts has increased significantly.
With the recent increase in the attraction of investors in the stock market, the number of Demat account openers has increased significantly and has crossed 2.5 million. Due to this, hundreds of people are opening a Demat account daily to fill the shares. For the same reason, a large crowd of service seekers is now seen in banks and capital markets operating in various cities across the country, including the Kathmandu Valley.
The Demat account, which has become mandatory in share and securities trading, is open especially for the primary share market. Of the more than 400,000 investors in the secondary market, only 1.3 million have participated in the primary market.
The Demat account, which has become mandatory in share and securities trading, is open especially for the primary share market. Of the more than 400,000 investors in the secondary market, only 1.3 million have participated in the primary market.
Stakeholders and investors say that the process of applying for shares in the name of all members of one's family has gained momentum due to the attractiveness of investment in the stock market. He said that the number of applications for shares in the name of children and the elderly is increasing tremendously.
He estimates that there will be applications to break the previous record in the IPO that is currently open to the public by Nepal Infrastructure Bank. Similarly, the concerned sales manager has made the same estimate now. For this, the sales manager of this bank, NIBL S Capital, has stated that for the convenience of the applicants, the office will be opened on Saturday and the work of opening Demat and renewing my share will be continued.
The company says that it is very easy to apply in the primary market now that all services have become technology-friendly.
CDS & Clearing Limited has also made my share software more effective so that it can easily accept 1.3 million applications. He claims that the capacity of CDSC's Meroshare software, which did not accept 300,000 applications easily some time ago, has proved to be effective in recent times. Now, for the convenience of general investors, CDSC has also launched MeroShare mobile app. He claims that this is very effective.
