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