Sources said that the regulator may come out with a list of securities comprising of either the A group stocks listed at the Bombay Stock Exchange or the 50 scrips comprising of the S&P CNX Nifty index, where all investors will be asked to trade only in demat shares from a certain specified date.The working group on depositories had met just last week and come out with a recommendation that from January 4 onwards, investors having a delivery of 5,000 shares and more per settlement with regard to 24 securities would make delivery only in demat form.

However, this directive is set to be given a re-look following the unexpected statement from none other than the prime minister, that he would take steps to ensure thatstructural changes are undertaken to ensure the speedy implementation of the depository system in the country.

This, according to him, would bring in greater transparency and lower the costs for small investors. Sources said that the most relevant structural change would be to make demat trading compulsory as this is the only way in which the system can grow rapidly.

When contacted, Sebi executive director in charge of depositories, Pratip Kar confirmed that a meeting had been convened and that the group would consider expanding the list of securities where investors would be asked to trade only in demat shares from a certain date.

``Following the prime minister's statement, we have decided to convene another meeting of the working group on depositories to come out with a fresh set of recommendations. Expanding the list of 12 securities where all investors will trade only in demat form and also expanding the list where institutions will trade only in demat form will be considered,'' Kar told TheFinancial Express.

On Saturday, Sebi chairman DR Mehta had told this paper that the regulator would come out with a fresh set of criteria for increasing investor participation in depositories. A move is being considered to make demat trading in all those companies mandatory where the number of shareholders is less than 50,000 and where the percentage of demat delivery has already touched a level of 80 per cent.

On the other hand, the National Securities Depository Ltd (NSDL) chief CB Bhave has said that the depository is ready with the necessary infrastructure and that the aim should be to bring in all the Nifty-50 stocks within the demat ambit by March, 1999.