Unlike the selling of shares, when you buy shares you are required to give a receipt in slip (RIS) to the broker. Normally, that is a very cumbersome process so your broker will ask you to sign a standing instruction to automatically credit your DP account in the event of any purchase. This provision is available in the DP account form itself. Once again, remember that all trades to buy shares must only be executed in the trading account that is linked to your demat account. No execution of trades can be done on the demat account. To sum up, for receiving demat securities you may give a one-time standing instruction to your DP. This standing instruction can be given at the time of account opening or later. Alternatively, you may choose to give separate receipt instruction every time some securities are to be received. Here is the process of buying and receiving shares in the demat form:
  • You purchase securities through a broker. You make payment to your broker who arranges payment to clearing corporation on the pay-in day.
  • Your broker receives a credit of securities in its clearing account (clearing member pool account) on the pay-out day.
  • Your broker gives instructions to its DP to debit clearing account and credits your account.
  • You receive shares into your DP account. However, if standing instructions are not given at the time of opening the account, you will have to give 'Receipt Instructions' to your DP for receiving the credit of shares.
  • You should ensure that your broker transfers the securities from its clearing account to your depository account, before the book closure. This is in case of rights, bonuses, splits and dividends. If the securities remain in the clearing account of the broker, the company will give corporate benefits (dividend or bonus) to the broker. In that case, you will have to collect the benefits from your broker.