At present, shares come back to the investor after transfer. The process of demat begins all over again, leading to inordinate delays. Sebi is now considering the possibility of transfer and demat, which will help cut down delay. Kar said that this facility is offered by nine companies and ``we want to make it mandatory for all the 104 scrips.''

Briefing the media after a marathon meeting with depository participants (DPs) and registrars today, Kar said that the demat backlog as on July 27 was cleared byAugust 10. A number of crucial decisions were taken at the meeting to iron out difficulties involved in dematerialisation and the procedural delays. Prominently, the exposure limit for broker DPs is expected to be increased from 35 times their networth to 100 times their networth. ``With DPs inundated with demat requests, it was found that this limit was not enough. The higher limit will give them enough leeway in meeting the demat requests.'' However, a final decision on this will be taken by the Sebi board. To ensure operational control at the branch offices of DPs, it has been decided that branches with more than 5000 accounts will have to link up with the depositories. ``They can be connected through wide-area network or live with NSDL,'' said Kar. While bank DPs have the advantage of network, many non-bank DPs do not have their branches connected to the depositories.

Registrars have also been asked to give confirmation of inter-depository transfers within two hours of the receipt of requests, failingwhich it will be automatically transferred. Registrars can reject such cases only if there is a mismatch or there are not enough shares.

To ensure that loss in transit does not add to the woes of the investors, it was decided that DPs would give indemnity to the registrars in such cases. On this basis, the registrars will proceed with dematerialisation of such scrips.

Another common problem faced by retail investors is that registrars do not accept partial dematerialisation, where a portion of the shares sent for demat are found to be not good. In such cases, the entire lot is returned to the investors. It has been decided that registrars will accept partial demat and send back to investors only those shares not found to be good delivery.

All DPs have been asked to ensure that they deploy trained personnel at their branch offices before March next. Another procedural problem is the wrong credit arising from errors. Ways and means are being worked out to put in place the process of reversal, saidKar.

In order to standardise the demat process, a committee has been set up. This committee will look into standardisation of opening of accounts, demat form, delivery slips, safety features in instruction slips etc. Kar said that the DPs and registrars have done a commendable job with almost 10 crore shares dematerialised so far. The market regulator had held the second such meeting in the last few weeks following complaints of delays in the demat process. The compulsory demat for 104 scrips hit a road block when it coincided with the seasonal book closures and the surge in the trading volumes on the bourses.

SPEEDING UP DEMAT