The 24 securities shortlisted by SEBI include BSES, Bajaj Auto, Colgate, Glaxo, Grasim, Gujarat Ambuja, Hindustan Lever, Hindustan Petroleum, Hindalco, Reliance, ITC, Tisco, Telco, ACC, M&M, NIIT, Ranbaxy, Castrol, Tata Chemicals, Indian Hotels, MTNL, Nestle, Novartis and Tata Power.

The core group also decided to make it mandatory for all vyaj badla shares to be deposited with a clearing house in demat form from January 4. This is something which the National Stock Exchange managing director R H Patil had suggested in his dissent note to the Varma panel on the revised carryforward system.

Meanwhile, Wipro and VSNL have been included in the list of 10securities where all investors will be required to trade in the demat form from January 4. Four mutual fund schemes of UTI, Mastergain, Mastershare, Mastergrowth and Masterplus have been put on the list of securities where institutions have been asked to trade only in demat shares from December 15.

According to SEBI chairman D R Mehta, the committee discussed putting a cap of Rs 5 lakh beyond which all trades would be in the demat form. However, it was pointed out that instead of a cap in terms of cash, it should be done in terms of number of shares.

"Institutions are already trading in demat shares in these 24 securities and now high networth clients will move into the depository fold. Over a period of time, we will lower the cap," said Mehta, adding, "These 24 securities form part of the Sensex; the remaining 6 are already in the list of 10 securities where demat trading will commence from January 4. This means that all the Sensex stocks will now be covered under the mandatory demat mode."

Accordingto Mehta, the next meeting of the core group will discuss the expansion of the list of scrips where institutions have been asked to trade in demat shares. He said that SEBI would take up with the Department of Telecommunications (DoT) the issue of levying a fee for allowing NSDL's network to connect with that of its depository participant's wide-area-network (WAN).

SEBI has also cleared an amendment in the bye-law of NSDL which will allow depository participants to send quarterly statement of accounts rather than the current period of 15 days. The process for dematerialisation has also been streamlined with a share now being sent directly by the registrar for dematerialisation when it is received for transfer in an investors name.

Move no great shakes, say experts

The SEBI diktat on setting a cap for investors beyond which they can deliver only demat shares is not expected to contribute much to the growth of the depository. Market sources say there is no way in which an exchange will be able tomonitor whether or not a client of a broker has actually run up a net outstanding of above 5,000 shares and has, therefore, delivered demat shares. The clearing house only gets to know the total outstanding position of a broker and not that of his clients. All a broker needs to do is to spread the number of clients in such a way that each one gets less than 5,000 shares of delivery against his name and, thereby, circumvents the SEBI diktat. "If a broker has delivered 10,000 shares through one client, all he needs to do is show it as delivery by 3 clients and deliver physical shares. The clearing house of an exchange does not go into the profile of the client.