In a related development, Price Waterhouse has developed a software codenamed `ESS' to facilitate automated back office work for a custodial depository participant. The international consultant is in talks with four top banks and institutions like Deutsche Bank, HSBC, HDFC Bank and ICICI for installation of this software.

While Deutsche Bank and ICICI are already believed to have commenced trials of this software, the other two are in the process of taking a decision. Thesoftware has been developed at the Calcutta-based technology centre of Price Waterhouse to cater to the sudden surge in trading in demat shares arising out of the April 6 Sebi announcement which allowed delivery of demat shares in the physical segment.

"We realise the immense potential that a demat environment holds out for our clients as well as investors. We have, therefore, decided to look at this area in a major way in terms of creating systems that could facilitate speedier and more efficient dematerialisation," said a top Price Waterhouse source.

"In the case of custodial DPs, the demat shares not only have to be transferred from one account to another but have to also be delivered on behalf of clients. In the demat mode the settlement has to be concluded fast and therefore an automated system which takes care of all the procedures involved is essential. Moreover, now that they have to also take care of delivery of both demat and physical scrips for the same settlement post April 6, a sound systemwould help," said the source. "There are tremendous opportunities in the areas of stock-lending and loans against shares, both of which will be able to develop only in a demat environment. We see a role in advising our clients on this front as well as putting in place necessary systems," the source added.