This list will be separate from the current list of eight securities in which institutions are required to sell only in demat form. This list is expected to be expanded in a meeting of the Sebi committee on depository on Friday.

According to sources, the managing director of the National Securities Depository Ltd (NSDL), C B Bhave, will attend the Cosi meeting and discuss the proposal to zero in on a few securities in which all sections of the market would be required to trade only in demat shares.

``A few securities which are not heavily traded but attract reasonable amount of trading interest could be for a start made to have only mandatory trading in demat shares,'' said a top depository source.

Bhave is taking the proposal to Cosi which earlier came up with thesuggestion to allow delivery of demat shares in the physical segment as well to boost liquidity.

The suggestion, which was taken up by NSDL with Sebi, got the approval and has come into effect from April 6 onwards.

``It is the brokers who know best about the market and hence it is only fair to come up with solutions to boost trading volumes in demat segments of exchanges. "We are hence taking up the matter in the committee and will discuss it with the NSDL chief as well,'' said a Cosi member.

It is felt that in some mid-cap companies the level of demat as a percentage of total equity of the company is very high and hence with a bit of a push they could comfortably have only demat trading.

``This could pave the way, over a longer period of time, for other securities to be traded only in a demat form,'' said a source.