Demat Account:
What is demat account?
Like our bank accounts to transact money in legally accountable manner, demat account is used for transact your shares, Mutual fund units and other Money market instruments with highest safety and it is mandatory as per SEBI (Security exchange Board of India).
Why?
Because of globalization and continues up gradation in the technology front there are many scams in the Physical share certificates transactions. In order to mitigate the fraudulent transactions demat account system is incorporated.
After the introduction of the depository system by the Depository Act, 1996. Now a days almost all company shares are dematerialized (As per market regulator SEBI, demat account is must ) and approximately the number of demat account (active) as on date is 10 million and expected to reach 25 million by 2015.
Where to open, factors to be considered and How to open - in next post.
(This is my own view, Please check for accuracy before using any details)
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