Simple Process to Demat Account And RTA Service Provider
A Demat account would be the entry ticket to the trading world in which you could buy or sell shares whenever you need. In the year 1996 in India, the Demat account name was first heard, and since then things have been amended for both the traders and stockbrokers. The start of the Demat account has sideways all the hectic paperwork and has executed the easier process for the traders to simply trade.
The process to open a Demat account is easier through online mode as compared to offline and saves time. The same would indeed lower the overall trading cost.
There are some people who used to open a Demat account however they do not use them on a regular basis or might stop using it after some time. The same pointed toward freezing an account which rendered that the stockbroker freezes your online Demat account on the subject of inactivity for a longer time. You can again get it through persisting the same eKYC process.
Freezing of Demat Account
Your shares are kept in the form of an electronic format. No matter whether you have the shares online or in physical form the motive is to secure your Demat account from bogus activities. Since you know the account opening process and information about operating, the other side of the Demat account includes account freezing. Let’s suppose you have the Demat account online. You have used the same for one month after that you left overseas for two years. When you returned you revealed that you were not able to do any transactions or trades.
You were thinking about the reason behind the same and this will locate you towards the cause that your DP or stockbroker went for account freezing. If your Demat account is not being used by you for more time the stockbroker freezes your account. You cannot process any trades until you restore your account.
Delivery Instruction Slip (DIS) or Receipt Instruction Slip (RIS)
You should go through the definition of “Delivery Instruction Slip or DIS Slip” whether you are a regular trader or a trading enthusiast or a finance export or an investor. The same acts like a token for the traders who trade shares offline. Excluding the same slip, one cannot facilitate the transfer or sale of shares. DIS would not interrupt traders who use the online Demat accounts. Even the traders who would not be required to travel the extra mile to submit the delivery instruction slip (DIS Slip).
For offline traders, they are required to submit the DIS slip to the corresponding broker or depository participant to process the sale of shares. The DIS slip consists of all the essential information of the trade. When it is the question of online trending then the traders could hand over the power of attorney to the depository participant or DP or stockbroker to manage their trades on their grounds. Unfortunately, there are times when the Delivery Instruction Slip gets repudiated. Because of various causes mentioned below issues arise.
- If the 12-digit alphanumeric code (ISIN) number is not right.
- If the number of shares in words is wrongly written.
- Failed to match the signature.
- Lack of shares in the trader’s Demat account.
- Overwriting in the Delivery Instruction Slip.
- Marked market transactions as off-market transactions.
All the traders are settled on T+2 grounds. When the traders sell the shares, the transaction settlement duration follows post to 2 days, except the deal day. Thus to prevent future difficulties same would be effective to submit the DIS slip on the same trade day, or no later than 11 a.m. on T+1. The faster submission of the DIS slip will direct to the smoother transfer of shares from one Demat account to another.
For errors on the DIS slip, you could simply solve them by linking with your DP. You could claim the same advantage when you hand over your DIS slip on the trading day itself. On the opposite side when the slip issues would not solved out then your shares would be auctioned. The plunge in the share price directed the trader to file additional auction value, which is a loss to the trader.
The rise in the price of shares cannot do any good for the trader as any additional returns or occurred amounts would be redirected to the investor protection fund. The method to avoid the same case is by double-checking the DIS slip till now and submitting that to the depository participant.
Certificate of Physical Share
Till today some traders are old school and seek to hold the shares in the physical form prior to converting them to the electronic form. Thus whenever the shares would be issued or transferred the firms send the physical share certificate to the trader as proof to encash the dividends. Towards the case when your physical share certificate lost its foremost condition then you could always get it exchanged by returning the damaged certificate.
RTA Service Provider
In the current trading time, there is a requirement for the Demat account has become essential for the traders, particularly for closing trades efficiently without suffering any issues in the process. Along with that, the Demat account acts ad hoc to store shares in an electronic form whenever required.
Everything comes with duties and responsibilities and the same would be for the Demat account owners. There are various duties that every trader should follow for the effective operation of the Demat account such as dematerialisation of shares, reconciling contract notes, revalidation of dividends, and others.
Much time will be needed when these kinds of work are done on an individual basis and would load the regular schedule. The same in which the Registrar & Transfer Agent Services providers would arrive in the structure. RTA services providers would be accredited via the Securities Exchange Board of India (SEBI). These agents would act as a bridge between the issuers and the two depositories National Securities Depositories Ltd and Central Securities Depositories Ltd to ease out effective trade by providing an array of services such as dematerialization, rematerialization, initial public offers, and corporate actions.