Details of a Demat Account - Introduction, Benefits and Steps to Acquire One

A large number of shares are bought and purchased by the investors with SEBI being the regulatory body in the whole process. In line with the protocols of legal authorities, such shares are present in either physical or electronic form. Physical Shares or Share certificates have a paper presence whereas electronic shares are in the dematerialized form stored in the Demat Account of the concerned Investor.  

As stated by the Laws of Companies Act 2013, the complete transaction of Shares and Securities will be in Demat Form effective from 2nd October 2018, which also means from 1 October 2019 no company will be allowed to transfer its shares and securities in physical form. Owing to this current amendment investors have to open a Demat Account under their name by submitting the Dematerialization request.   

An Registrar & Transfer Agent Service provider offers assistance such as dematerialization of shares, complete record-keeping, contact with the national depositories, expert assistance related to investment opportunities or assistance to any other query of the customer.

Demat Account

Dematerialization of Shares is a process in which shares owned by the investor are converted into electronic form and stored in the Demat Account of the respective investor. So clearly a Demat Account holds the shares and securities present in the electronic form to facilitate the investor with online visibility of his purchased shares.  

The concept of Demat Account was initiated by the Securities and Exchange Board of India (SEBI). SEBI is India’s largest regulatory body for all types of share transactions in the Indian market, operating since 1996 in India.

Demat Account is almost equivalent to a bank account. The only difference is that it holds shares, securities, bonds and mutual funds on behalf of the investor. Earlier, holding a Demat Account was recommended to those who trade with shares and securities on a regular basis. But from now onwards it is mandatory for every investor to get a Demat Account regardless of how frequently he is trading on shares. 

Before we jump into the step-wise procedure to open a Demat Account lets get familiar with the two crucial terms with regards to share transactions (i) Depositories and (ii) Depository Participant. 

National Depositories and Depository Participants 

National Depositories - Operating under the surveillance of SEBI, National Depositories are the organizations responsible for holding all the registered shares and securities in the country. There are two major depositories namely National Securities Depository Limited (NSDL) and Central Securities Depository Limited (CSDL). Transactions of all the registered shares and securities is possible only through these two main depositories.       

Depository Participants - These are organizations working as an intermediary between the investor and the main depositories. For opening a Demat Account, the investor needs to approach the Depository Participants. 

Steps to open a Demat Account

Step 1: Approach a DP which can be any financial institution like banks, brokers, etc. 

Step 2: Fill in the application form with accurate details for opening a Demat Account affixing the copies of the required documents.    

Step 3: Once the online documents are submitted by the investor, the officers from the DP comes for the in-person verification.   

Step 4: Once the information is checked for its authenticity, a unique account number is given to the applicant by the DP which is required by the investor to access his/her online Demat Account.   

The expense for opening a Demat Account

Following the completion of the account opening process, the Demat account holder gets an agreement copy from the concerned DP enlisting the terms and conditions, rules and regulations along with the applicable charges. Generally, the DPs offer free of cost Demat Account while there are some who charge a certain amount or some take refundable charges. 

The account holder is charged with the transaction fees along with the annual maintenance fees and the conversion fees (dematerialization of shares and securities). 

Read Also:- Complete Procedure For Dematerialisation Of Shares Under RTA

Points to remember while opening a Demat Account    

1. It takes 7-14 days for a Demat Account to get active.
2. Investors can open different accounts with different DPs. 
3. No minimum share limit is set for opening a Demat Account. 
4. It is mandatory to add a beneficiary while opening a Demat Account
5. KYC is mandatory before opening a Demat Account. 

KYC Conformity

Getting KYC done is mandatory if you want to have a Demat Account. As the process above says that the investor has to apply by submitting the application along with the valid documents to the concerned DP for availing a Demat Account. 

Identity Proof - The copy of any government authorized ID like Adhaar Card, PAN Card, Passport or Voter ID can be submitted by the applicant. 

Address Proof - Applicant’s residence proof like ration card, electricity bill, water bill or any ID Proof having the place of residence mentioned in it. 

Bank Details - It is a must for the applicant to submit his/her basic bank details like bank account number, etc. 

Benefits of owning a Demat Account

• A Demat account eliminates the chances of your shares, securities, bonds and debentures getting misplaced, robbed or damaged. 
• The charges on the transaction of shares is less if done via a Demat Account as compared to the physical one.
• A Demat Account has made transactions more easy and less time consuming for investors. 
• There are no restrictions on the number of shares you buy or sell via a Demat Account. 
• Online transactions and management is far convenient these days than physical transactions of shares. 
• More secure than physical shares transactions. 

Owing a Demat Account gives you all the above facilities simultaneously adhering to the compliance of the Government.

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Revolution of Mutual Fund Industry by RTAs

It is the technology which takes a normal growth rate of business to an accelerated progress dexterity. Whether it is a normal course of operation of an organisation or serving the clients with customer care facilities, technical advancement is necessary to make a win-win. In today’s digital era, if you are not upgraded with technologies and latest utilities, you can not ensure automation, ease and accuracy. 

Last few years evidence the enormous growth & success encountered by Mutual Fund houses. Here as well, the credit goes to high technology, the hi-tech facilities given by the Registrar & Share Transfer Agent (RTA).

It is only because Registrar and Transfer Agents (RTAs) that mutual fund houses could get to the top quickly and amazingly among other institutions of the financial sector such as banks, insurance companies, brokerage firms, etc. 

Read Also:- RTA - An “all-inclusive” Solution for Mutual Fund Investors

RTA agent is a cornerstone behind the astounding progress of mutual fund houses. By introducing & promoting advanced technology in the mutual fund houses, RTA Agent has assured accuracy and value addition in the services of mutual fund houses. 

Technology has transformed the financial sectors in a never-imagined way. Some of the examples include e-investment tools for investors and distributors, intermediary interfaces, data sharing apps, digital transaction systems; they all are techno-driven and bolstered.

Today, it's a matter of a few clicks and seconds to encash the money, to transfer the money, to get monthly payouts, to upload the investment statistics on different platforms. Similarly, executing a Systematic Investment Plan (SIP) with a mutual fund houses, asset management entity or insurance firm has brought high-level of convenience for investors, it would not have been possible without technological advancement.

Now let us shift our focus to Registrar and Transfer Agent and the way they have implemented technological up-gradation in the mutual fund industry to greet the ease, automation, speediness and many other exquisite services in the industry. We all know that RTA is linchpin behind the triumph & popularity of mutual fund houses. Let us march towards the answer to HOW?

A Registrar and Share Transfer Agent like SAG RTA being an intermediary serve the facilities to and interact with every stakeholder while maintaining the records of clients’ transactions on behalf of mutual fund houses. 

Different key stakeholders like asset management companies (AMCs), fund accountants, couriers & postal agencies, exchanges, depositories, depository participants, mutual fund utilities, channel partners, payment aggregators, and banks are served through sustained interfaces.

Management of Data

RTAs also processes & transfers all the investors’ & investment-associated details & data from diversified sources in multiple formats. RTAs regularly interact and help every stakeholder of the mutual fund industry in the management & maintenance of their data.

Import Data in all Formats and Exporting Them in the Relevant One

With the use of technology-based systems Registrar & Transfer Agent meets the diversified needs of different mutual fund investors easily and also exchange data with them in multiple formats which includes  CSV, DBF, Excel, text or advanced XML through web-services.

RTAs use technology-embedded system that creates the output files in accordance to the required data format and also input data in different formats from the stakeholders. Technology allows the RTAs to preserve the input and generate the output in the desired format. 

Read Also:- RTA is a Cornerstone of Mutual Fund Companies. See How?

It is because of the innovative approach of the Registrar & Transfer Agent industry that mutual fund houses could be ahead of the game and break new grounds. RTAs have been in the client’s best interest as well.

High Technology to Serve the Clients

Despite being highly successful & gangbusters, the whole Registrar & Share Transfer Agent industry endures to adopt cutting-edge technologies and implement ground-breaking ideas to serve the mutual fund industry and its clients in the best possible way. 

Adherence to Government Rules & Regulations

RTAs keep updating themselves as per the amendments in government rules & regulations and latest notifications. This up-to-minute leg-up alongside the adoption of lead-forward technology let RTAs like SAG Infotech provide world-class services to mutual fund houses and investors in adherence to legal norms. 

Safety, Security & Reliability

Beyond the shadow of a doubt, RTAs have been the true supporter for mutual fund stakeholders and the non-stop advancement in the RTA’s system & software guarantees reliability, security and confidentiality of big-league financial & investment-related facts & figures. 

Read Also:- RTA Expertise for Mutual Fund Houses and Investors

Reduction in no. of Complaints and Increment in Investments 

Unprecedented technologies of RTA have revolutionised the mutual fund arena in which number of complaints have reduced and the mutual fund investments have grown quickly in the past few years.

Taking the Stakeholder Ahead

Besides, leading off important services, processes and statutory changes in the mutual fund industry, RTAs are driving the industry stakeholders to become a top-drawer with technological advancements through ground-breaking innovation and out of the box ideas. 

Boosts Trust and Credibility within Investors & Regulators

Also, RTAs have upsurge the trust and assurance for mutual fund houses within investors, regulators and stakeholders. With the optimal use of hi-end technologies, RTAs are inviting front-line products, projects and procedures in the mutual fund industry. 

For mutual fund customers as well, RTAs have played no small role by catering the most efficient & valuable facilities to them. 

In the ever-changing dynamic market also, RTAs have potency and foresee to take mutual fund industry parallel or an advance of the banking sector.

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RTA - An End to End Solution For MF Investors & Companies

A mutual fund transaction involves a trail of activities that include digital and manual as well. Several transactions such as buying, selling and switching the shares are carried out by investors regularly and these transactions must be properly recorded & updated by the mutual fund companies to grease the wheels for future activities.

Sometimes circumstances to change investors’ address name or bank details also germinates and many investors need to dematerialise or rematerialise the share & securities, they also need to payout dividend etc.

So, in a scenario when they are busy executing their core responsibilities, who accomplish these tasks on their behalf?

Read Also:-  Why Registrar and Transfer Agent Boon For MF Houses & Investors?

Registrar and Transfer Agent Services of SAG Infotech takes on this responsibility. SAG RTA maintains & records the transactions carried out by the mutual fund investors on behalf of mutual fund companies and also facilitates investors doing their mutual fund related job.

It caters investors with services such as Transmission, Transposition, Name Removal, Investors’ Name & Address Change, Alteration in Client Signature, etc.

Apart from these basic RTA services, SAG RTA Registrar and Share Transfer Agent helps investors in settlement of all the IEPF claim, dematerialization of securities through CDSL/NSDL depositories, paying out dividends through ECS transfer, and so on also.

First, let us understand the meaning of Registrar and Transfer Agent Services and their role to dive into the benefits offered by them to mutual fund companies and mutual fund investors. 

Registrar and Transfer Agent

What is the meaning of Registrar & Share Transfer Agent?

Registrar and Transfer Agents refers to the trusts or third-party organisations which are appointed by mutual fund companies, financial institutions & publicly-traded companies to register and upkeep the detailed records of the transactions executed by their investors for their convenience. 

Such companies often have many investors who possess a part of the organisation and so their records need to recorded & preserved well and so they hire a third-party professional service by Registrar & Transfer Agents to carry out these tasks on behalf of these companies. However, some companies do not prefer such third party services and act as their own Registrar and Transfer Agent. 

What is the importance of Registrar & Transfer Agent for Mutual Funds Companies and Investors?

R&T agent is a single-window solution for Mutual Funds Companies as they execute all the investors’ and their transaction-related work like record keeping, updating the personal information of investors, etc on behalf of these companies and spare them with a lot of time to focus on their core job.

Since an R&T Agent is a specialised professional and works through its widely extended branches across the nation, it very-well meets the multiple needs of mutual fund companies as well as investors.

Read Also:- RTA is a Cornerstone of Mutual Fund Companies. See How?

RTA notifies the investors about new offers and schemes also and so act as marketing personnel for mutual fund companies while assisting investors to make a beneficial deal. R&T provides an end-to-end solution (E2ES) to all the three stakeholders of Mutual Fund Companies - Distributors, Investors and the Asset Management Companies (AMC).

Registrar & Transfer Agent is an all-inclusive solution for mutual fund investors as well and fully knock off the need for investors to visit the mutual fund offices. RTAs provide forms of fund houses to the investors, they also notify the investors about the dates of dividend distribution, new offers and maturity dates in case of fixed maturity plans (FMPs).

Besides, RTAs also complete the transactions of investors and procure their account statements.

Adding stars to the benefits, RTAs directly do not charge a fee from investors, mutual fund companies pay RTA which these companies recover from investors. 

Notably, SAG RTA Registrar & Transfer Agent Services must be availed from Securities and Exchange Board of India (SEBI) accredited RTA service provider like SAG Infotech that promises accuracy and adherence to prevailing laws.  

Leading RTA Agent in the Mutual Fund world of India are as follows:-

• SAG RTA by SAG Infotech Private Limited
• Franklin Templeton International Services Private Limited
• Computer Age Management Services (CAMS) Limited.
• Karvy Computershare Limited 

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RTA is a Cornerstone of Mutual Fund Companies. See How?

Mutual Fund is the first option that punches the clock of the investors when they think of making an investment to earn big. Mutual Fund sector is a never-depressing market with lakhs of investors making investments in various schemes.

A mutual fund house needs a manager for the proficient management of its tasks and to help its clients with diversified needs. So, instead of appointing an in-house manager or managers, mutual fund houses outsource these jobs to a professional and trustworthy Registrar and Transfer Agent (RTA Agent) who is specialized in RTA Services & having a presence throughout the nation.

Read Also:- How Mutual Fund Companies Primarily Based on RTA Services?

Advancement in technologies has made the digital presence of an organisation possible in different cities across the world. Similarly, R&T Agent are present at different places through its virtually connected expanded branches. In this way, an R&T Agent facilitates all the client living in different cities with multiple services such as the management of transactions carried out by them, notifying them about different offers & investment opportunities, changing their name, address as required etc in addition to the managerial facilities to the concerned mutual fund houses.

Facilities offered by Agent is based on the agent type you have hired. Some companies appoint an agent only for investment guidance while some appoint for the complete management of the investment portfolio. Registrar and Transfer Service are appointed by mutual fund houses either permanently or on a clientele basis.

Registrar and Transfer Agent can Increase the Financial Worth of Business

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A Registrar and Transfer Agent Service is a single-window solution for the management of the mutual fund process. Once the tasks related to mutual funds are outsourced to Registrar & Transfer Agent, It knocks off the need to appoint an exclusive workforce by being an intermediary between clients & mutual fund houses and serving both simultaneously.

• RTA Agent notify the client about new offers and provide them with quality service which generates new & more sales. 
• Helps investors execute transactions such as selling, buying and switching funds and also simplify the paperwork for them.  
• Advice the best offers to make an investment to the clients which further increases their investment potentials and so the profits. 
• Provides business-like ideas associated with a mutual fund investment. 
• RTA assists you to make rational decisions, upkeep and monitor diversified investments.

A Registrar and Transfer Agent Services is a sure way for any investment company to prosper and multiply their profits. When a company outsources its investment-related decisions & tasks to a leading Registrar & Transfer Agent Services like SAG RTA, their back-end processes and clientele services are managed properly & proficiently. 

SAG RTA Registrar and Share Transfer Agent are first SEBI accredited RTA service provider and one of the leading RTA in India. Contact us now to avail our top-rated RTA services.

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