These scrips would include a number of software and pharma companies which have not yet been shortlisted for mandatory demat trading.

Sebi's decision is expected to be ratified on August 19 when Sebi meets stock exchange heads. Sebi had earlier indicated that it would expand the list of securities to 100 by the end of the year and it surpassed this target when, in one stroke, it cleared a list of 60 securities where trading in demat shares would be mandatory for institutions from October 15 onwards.

Sebi chairman DR Mehta had indicated that another list of 40 securities could be added to the 110 before the end of the year.However, sources close to Mehta say the Sebi chairman has taken it on himself to give a boost to the depository and is now of the opinion that all securities which are available for dematerialisation should be brought within the ambit of mandatory demat trading for institutions.

"The chairman is keen that by December, all 235 companies that have signed up with the National Securities Depository Ltd should have institutions trading only in demat shares of these companies," said a source. The August 19 meetingwill also take up measures to boost the growth of the depository. NSDL chief CB Bhave has also been invited for the meeting. Another issue which is expected to be taken up is to see how the minimum networth criteria for broker depository participants can be reduced to facilitate participation of a larger number of brokers.