The National Securities Depository Limited (NSDL)—India’s first and largest repository of electronic securities on Thursday celebrated two decades of operations.
You can also follow us for daily intraday updates click here to
Along with electronic trading, the introduction of dematerialization—conversion of physical shares into electronic form--in the mid-90s was the other radical move that changed the character of the Indian market forever, and for the better.
Need for Demat The birth of NSDL was inevitable once the National Stock Exchange commenced operations in November with electronic trading, instead of the open outcry system being followed by rival Bombay Stock Exchange. Electronic trading made price discovery more efficient, it also sent volumes soaring.
There were transactions happening every day, but all the trades would be cleared once a fortnight. And therein lay a headache for the stock exchanges in settling the trades—ensuring that sellers got their money and buyers, their shares. Often, truckloads of share certificates would land up at the clearing houses of BSE and NSE.
As an experiment, regional clearing corporations were tried out. But that did not work, the main problem being the transportation of physical shares.
No comments:
Post a Comment