Post-liberalisation of the Indian economy in 1991, the Indian Government established SEBI as the regulator for the securities markets in 1992. SEBI began to bring about reforms in the securities market. One major reform carried out by SEBI was the Dematerialisation of securities.

Dematerialisation is converting physical share certificates into electronic book entries similar to bank accounts. It eliminates issues such as the risk of bad deliveries, massive paperwork, loss and theft of share certificates, delay in transit, etc. With the help of dematerialisation, these problems have become a thing of the past.

The Parliament of India passed the Depositories Act in the year 1996. With the enactment of the Depositories Act, the process of Dematerialisation received a solid backing of the law. National Securities Depository Limited (NSDL) led the Dematerialisation of securities, which pioneered Dematerialisation in India. Subsequently, Central Depository Services (India) Limited (CDSL) was established, and it became the second Depository to be recognised and licensed by SEBI.

As per Depositories Act, 1996, the Depository is the registered owner of the shares in the company’s records, and it holds the shares in its fiduciary capacity for the shareholder.

Further, Depositories have appointed various intermediaries known as Depository Participants to open and maintain Demat accounts for the investors.

Very much like your bank account where you deposit your money, a Demat Account holds all the investments you make in shares, government securities, exchange-traded funds, bonds and mutual funds in one place.

When we purchase securities, they appear as credits in our Demat account, and when we sell securities from the Demat account, they appear as debits in the Demat account.

The dematerialised securities are held on our behalf by the Depositories. However, the interface for you to operate the dematerialised securities is always a Depository Participant (DP).

The Depository Participant is an agent of the Depository through which we maintain and operate our Demat Accounts. The Depository Participant will intermediate between the Depository and us. This service is similar to a branch service of a bank that provides banking services. Just as banking services are availed through a branch, the depository services are availed through a Depository Participant.

Demat Accounts have made holding of securities easier. There is no need to safeguard your documents physically. You can simply use your Trading Account to purchase securities and then have them stored in your Demat Account that you can operate online.

The benefits of participation in a depository are:

  • Immediate transfer of securities.
  • Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.
  • Reduction in paperwork involved in transfer of securities.
  • Reduction in transaction cost.
  • Nomination facility.
  • Change in address recorded with DP gets registered electronically with all companies in which investor holds securities, eliminating the need to correspond with each of them separately.
  • Transmission of securities is done by DP eliminating correspondence with companies.
  • Convenient method of consolidation of folios/accounts.
  • Holding investments in equity, debt instruments and Government securities in a single account.
  • Automatic credit of shares in demat account, arising out of split / consolidation / merger etc.

Tracom became a participant of NSDL in the year 2001 and is serving more than 10,000 satisfied customers.

In 2014 Tracom won NSDL’s Star Performer Awards for Best Performer in Account growth Rate.

At Tracom, we aspire to give the best services as a Depository Participant, at most economical rates. Our proactive services have lead to a solid growth in referral based clients, which speaks of our quality of service.


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