Average 13 lakh new demat accounts added every month since Apr Mumbai, Jun 6 PTI Amid near-record rally in the equity markets during the pandemic-ravaged FY21, brokerages have added on an average 13 lakh new demat accounts every month since April last year, taking the overall retail investor headcount to record 6. The markets ended the year to December with a 15 per cent gains and the fiscal year to March with a historic 68 per cent, the second best in its history after an 80 per cent in after taking 40 per cent due to the global financial crisis in the previous year. Brokerages and exchanges on an average added lakh new investors every month in the past 14 months, taking the total to 6.
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A Demat account is a must if you want to buy and hold shares. However, if you are not able to sell shares from your intraday trading due to some reasons, you may be required to hold securities. Having a Demat account will be beneficial in such cases. Additionally, a Demat account helps you store debentures, bonds and mutual fund units. Dematerialization Demat is a process of converting a physical share certificate into an electronic record. The shares in electronic form can be readily bought and sold and are easy to account for.
The trading on stock exchanges in India used to take place through open outcry without use of information technology for immediate matching or recording of trades. This was time consuming and inefficient. This imposed limits on trading volumes and efficiency. In order to provide efficiency, liquidity and transparency, NSE introduced a nation-wide on-line fully automated screen based trading system where a member can punch into the computer quantities of securities and the prices at which he likes to transact and the transaction is executed as soon as it finds a matching sale or buy order from a counter party.
Actual stock certificates are then removed and retired from circulation in exchange for electronic recording. With the age of computers and the Depository Trust Company , securities no longer need to be in certificate form. They can be registered and transferred electronically. The introduction of dematerialization allowed for accounts to be updated automatically and swiftly. In earlier eras, transactions at stock exchanges were conducted by traders who shouted buy and sell prices.