Dematerialised Shares May Draw Premium

Q: What kind of premium will shares traded on NSD command?

A: The shares in the depository will be traded in a separate segment from the physical shares. Since in the depository segment, investors are assured of good delivery and since no stamp duty is payable for transfers in the depository, it is expected that depository shares may command a premium.

Q: You spoke of 10 Indian companies which had agreed to be part of the NSDL. Did it take a great deal of persuasion to get them on board? Did the initiative come from them?

A: As a depository we are willing to offer our services to any of the other exchanges provided they set up clearing corporations which guarantee trades on the SE. The question of our compelling anybody does not arise. We need to appreciate that these corporates agreed to come on board even while the depository was making preparations. Q: The BSE had plans to set up a depository. Would it not undermine the NSD? Do you see a proliferation of depositories in the country?

 

A: The legislation allows more than one depository to be set up and it would be unrealistic on our part to expect that nobody else will set up a depository merely because we are the first in the business. I think the key to our existence is efficient and cost-effective investor service. I don't see any confrontation in this.