The issue of expanding the list was discussed at the core group meeting on depositories on Wednesday and it was felt that in the wake of requests from none other than the companies themselves the list should be expanded.

The list may be expanded or an additional list may be announced at the next meeting of the core group convened on October 20.

According to Sebi sources quite a few companies have made a strong pitch before the regulator to include their shares in the mandatory demat trading list which is currently confined to 10.

Sebi sources said that the exercise has already been kicked-off and the regulator has asked leading depository participant, Geojit Securities, tooutline the parameters adopted by it for expanding the list of securities for mandatory demat trading to 53. Geojit has asked its 10,000-odd clients that it will only trade demat shares of these 53 securities from January 4.

Geojit Securities is believed to have informed Sebi that it had shortlisted the companies based on two parameters. One, the investor interest in the scrip and second, companies where the extent of signature differences detected are the maximum. The latter actually leads to bad deliveries which can be eradicated through demat trading.

Taking note of the development, which could be emulated by several other broker DPs and coupled with a phenomenal response to Sebi's diktat on mandatory demat trading, Sebi is tilting towards expanding the list of 10.

The group was informed that several companies which have seen high levels of dematerialisation have written to the regulator urging the inclusion of their name in the list. Their shares could be included in the same list or a subsequentone, but at the earliest, they have suggested.

Companies stand a lot to gain through elimination of paper by being able to get rid of the cost and headaches of processing huge quantities of paper. It also eases the task of the share registrar and eliminates processing complaints on bad deliveries and delay in receipt of shares after transfer.

Most importantly, it prevents unscrupulous elements from introducing tainted shares of the company in the market.

Among the companies which have expressed their intentions to be part of the list is Reliance, a company which has a vast shareholder base and generates a lot of investor interest.

There has been a significant rise in the number of accounts being opened with the depository. The number of accounts opened have sped past the 75,000 mark and more importantly, the number of shares that have been dematerialised have crossed the 300 crore shares mark.

The value of these shares is currently at Rs 47,000 crore (about $ 11.5 billion).

The two recentdevelopments, that of making the secondary and the primary market compulsorily in the demat form, has led to the sudden spurt of interest. It is felt that through the twin measures Sebi has outlined the future course of the market and investors hitherto on the sidelines have jumped into the fray.