Measures taken by the Government to promote demat trading
1. Public awareness programmes: To enhance awareness among investors about the advantages of the demat, Government of India have undertaken Public Awareness Programmes.
2. Ceiling of Advances: To encourage investment in demat equity or debt, RBI has decided to raise the ceiling of advances to Rs. 20 lakhs, if the advances are secured by demat shares. Likewise, the minimum margin required against demat shares has been reduced to 25%.
3. Delivery in Demat Shares: An investor who is purchasing shares in physical form may be allowed to take delivery in demat shares. Such shares will be considered good delivery.
6. Trading in Demat form: SEBI has made it compulsory for institutional investors to trade in demat form in respect of 110 scrips from October 15, 1998. With effect from December 15, 1998 institutional investors have to settle trade compulsorily through demat form in respect of 235 scrips.
5. Settlement of trades in demat form: According to SEBI guidelines, retail investors in 12 companies have to compulsorily settle trades in shares in demat form from January 4, 1999. With effect from February 15, 1999 nineteen companies have been added to this list of 12 companies. From April 15, 1999 another 29 companies have to be traded in demat form compulsorily.
6. Incentives to Investors: Special incentives are offered by depository participants. Waiver of account opening charges, security deposit, maintenance charges and reduction in transaction costs are some of the incentives available to the investors.
7. Lending and borrowing of securities in demat form: To enhance trading volume in the demat shares, NSDL intends to facilitate stock lending and borrowing of securities held in demat form. This would step up the trading volume in the demat shares.