Saturday, November 29, 2014

Handling demat shares is very time consuming.

Ans. This statement is False.

1. Share certificates, when converted from a physical form into an electronic form are called demat shares.

2. The depository system eliminates the handling of huge paperwork involved in the transfer of securities. Under this system, the securities are transferred by means of entries in the ledger of Depository System without physical movement of the security certificates.

3. Under the depository system, the process of transfer of securities is very simple and easy. The transfer of securities from one investor to another under this system is virtually automatic, speedy and all hurdles in the transfer of securities are removed.

4. As this system reduced the settlement time of transactions, the investor gets immediate payment from the purchaser or broker of the securities.