The diktat is expected to come into effect from November this year. Shareholders will, however, be allowed to rematerialise their securities free of cost if they are desirous of keeping their shares in a physical form only. Sebi will kick-off a series of meetings with merchant bankers to ascertain their views on the timing of the diktat as well as look at any functional changes which would need to be brought about. "We would need to prescribe a different application form for instance. These issues would be looked into and we are hopeful of making this mandatory on all fresh issuers from sometime in November this year", said a Sebi source.

Chief economic advisor, N Shankar Acharya, had in his recommendations on the development of the primary markets, suggested that oneway of bringing down public issue related costs is to route all public issues through the depository.

Speaking to The Financial Express, the depository chief, CB Bhave had made a call for this and added that the entire issue allotment process would be completed in 10 days once such a measure was put in place. The NSDL has already put in place its primary market issue allotment module and is ready with the infrastructure for kick-starting the move.

According to Bhave, on the functional side, an entire issue allotment would be completed within 10 days of the closure of the issue as against 30 days currently taken for despatching all the shares to investors. Add to this another 10-15 days of postal time taken and it leads to a 45 day time period by when an investor receives his shares. This time will be reduced to 10 days thereby giving him liquidity for that much more time.

Explaining the procedure that will be adopted, Bhave said that an investor would only need to fill in his name and depositoryaccount number apart from details of the mode of payment. He would take this form to his depository participant who already has other details about the investor captured with him. The DP will then electronically forward these requests to NSDL which will in turn transmit these shares to the registrar. The registrar will similarly provide the depository with details of those investors who have received the allotment and those who have not. The allotments will electronically be credited into the account of investors and the refunds will be made to those not eligible.

"There will be tremendous cost saving for the company as it does not need to print any paper and not incur any postal cost. For the investor, he gets his shares much faster and does not have to go through the headaches of filling up lengthy application forms", said Bhave. Bhave said that an investor will now start dealing directly through his DP with whom he has proximity and a working relationship.

"Currently an investor deals with a registrarfor all issue related problems. There is no proximity and no incentive for the registrar to service the investor. The DP on the other hand deals with the investor and is dependant financially on him as well. Moreover, he is in proximity to the investor. For an investor, this is an important change", said Bhave.