A Statement Step by Step Understanding of a Demat Statement

A Statement Step by Step Understanding of a Demat Statement

Demat holding statement and account statement

Since demat is electronic mode, investors often wonder, what is the proof of ownership. One thing you must file and keep with you is the demat account holding statement and the demat account transaction statement sent to you by the DP in a regular basis. That is where a demat account holding statement comes in very handy. Let us first try and understand what is meant by a Demat holding statement. Typically, holdings refer to ownership; which means the securities you own and these could be equities, bonds or ETFs.

Demat Account statement is the shares and other securities standing to the credit of your demat account and the transactions in the same i.e. the movement in and the movement out. It is a flow. The DP holding statement shows the value of the portfolio on a real time basis or on a near real time basis. We will also look at what is this statement of demat holding and how it matters to your financial record keeping and as a statement of your net worth.

In this segment, we shall focus on what is demat account holding statement and also what is meant by just a demat statement. Do you know how to get demat holding statement? We will also dwell on this aspect towards the end of the narrative. Dematerialisation Request Form.

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Table of Content

  1. Demat holding statement and account statement
  2. How to read the demat statement mailer sent by the DP
  3. Key components of the Demat Account Statement CAS
  4. Demat account statement itemizes your ownership franchise
  5. Don’t forget to monitor the demat account statement cumulatively

How to read the demat statement mailer sent by the DP

If you already have a demat account with a SEBI registered DP, it is extremely likely that you would be periodically receiving either emails or snail mails from the DP telling you about the holdings and the transactions in your DP statement during a set period. You may have grossly ignored such data flows, but it is time to focus and understand these things in your own personal interest. 

If that is the case, it is high time that you open your demat account statement and the demat holding statement and look at in detail. It is an interest summary of your trades and your holdings in various securities presented in a very systematic and organized manner. Every Demat account holder receives these statements regularly through email, containing a wealth of information about Demat account, so don’t make the mistake of ignoring it. In last few years, with the rapid growth of online trading, the whole concept of demat statements have become electronic, albeit with the same intent and thrust.

One argument proffered by many investors is that they are regularly checking their holdings real time on the web. So there is no value addition in again looking at these numbers. That is not correct. Probably, in your hurry, you may have missed some transaction and that would show up in your demat account statement in terms of impact. Hence it is advisable to open your demat account statement and go through it in detail, since that is the official record from the DP and any discrepancies have to be reported immediately to the DP for rectification. The onus is on you.

Key components of the Demat Account Statement CAS

Most DPs send a consolidated demat account statement (DCAS), which includes the statement of holding and the statement of transaction for simplicity. When you receive demat account statement (DAS) with consolidated account statement (CAS), here is what you need to delve into in detail.

  1. First and foremost, check the basic details and verify they are right and updated. That includes your name, your contact number, your residence address, mobile number for alerts etc. If it is not updated, intimate the DP immediately.
  2. The statement of transactions highlights the stocks and the other assts you bought and sold with the net balance that goes into the holding statement. This section covers all inflow and outflows of all securities; be it equity, ETFs, bonds and mutual funds.
  3. Cross check the statement of holdings with the summation of the contract notes. It is a cumbersome task, but it is your money after all, so you need to do it. If you bought 600 shares of RIL and sold 300 shares of RIL, then the net balance of 300 shares will show in your holding statement.
  4. More importantly, this statement covers corporate actions during the period and you can use it as a reference while filing your tax returns. Corporate actions include dividends (both interim and final) paid out, bonus shares issued and credited with the ratio, rights applied for, buyback of shares, stock splits, scheme of arrangement etc.
  5. The demat balance is itself quite nuanced and has many components. The overall holdings of various securities in the demat account is segregated into various categories. It then segregates free balance, which are available for transacting in the market. The third segment of the classification is the lock-in balance which could be shares under lock-in for a fixed period due to a private placement, pre IPO or anchor placement or for any other reason. Such shares cannot be sold till the lock-in period is completed. You may have pledged shares for LAS (loan against shares) and these shares are also not available for transacting. The pledged balance is also shown. The free balance is normally the net figure. It is the current balance minus locked-in balance minus the pledged balance. Free balance is your liquidity or your leeway to transact in the markets.

Demat account statement itemizes your ownership franchise

Demat holdings statement provides a complete and comprehensive list of all the shares and other securities like mutual funds, ETFs, gold bonds, government bonds etc you own. F&O transactions or intraday trades do not impact your demat account in any way since these are contracts and not assets and demat account only holds assets. Contracts stay in the trading account and are adjusted right there. The summary of Demat holdings will show the final results of different credits and debits to your Demat account as well as the net credit balance along with flow in the period, which could be a month or a quarter.

How do demat credits happen? Demat credits can come from applying for an IPO and getting the allotment. Demat credits can also arise when you buy shares in the secondary market. It can come from corporate actions like rights, bonuses, splits. You can also have credits to the demat account because you got shares as a gift or because you got shares by transmission. Debits to the demat account can happen from sale of shares or buyback of shares or, at times, due to pledge confiscation.

Don’t forget to monitor the demat account statement cumulatively

One of the best ways to keep a tab on  your demat account is by cumulatively tracking your demat account statements. The least you can do is to closely monitor your demat account statement closely. If you find debits or any transaction not authorized by you, bring it to the DP and to the broker with immediate effect. Also keep a tab on the debit and credit flows. When you buy the stock it must be credited to your demat account on T+2 day and when you sell the stock it is debited to your demat account on T+1 day. IT can save you a lot of blushes in the end.