In the month of August, 494 National Stock Exchange (NSE) brokers and 302 Bombay Stock Exchange (BSE) brokers delivered demat shares in the physical segment of their respective bourses.

This according to National Securities Depository Ltd managing director, CB Bhave is an indication that delivery of demat shares in phyiscal segment is not being resorted to by the institutions alone. The move to create a unified segment had been aimed at allowing institutions who could sell only demat shares in certain securities, to find an exit route given the poor liquidity in the demat segment of these bourses.

"These high number of brokers indicate that a number of retail investors as well as brokers have started doing business in demat sharesand this is a good sign", said Bhave.

Further, the number of scrips where demat shares are being delivered has remained higher than the ones specified by Sebi for mandatory demat trading by institutions.

In August, demat shares were delivered with respect to 57 scrips when the mandatory list comprised of only 50 scrips. In June when the number of scrips for mandatory trading was 30, in 38 scrips demat shares were delivered.

Coming back to the participation by brokers, figures collated by NSDL reveal that at NSE the number of brokers delivering demat shares has risen from 80 in April to 494 in August. In May the figure was at 99, in June 281 and went up to 441 in July. This means that almost half of all NSE brokers are delivering demat shares in the physical segment of NSE. The rise has been equally prominent among BSE brokers. In April, the number of BSE brokers who were delivering demat shares was 124. This went up to 157, 203 and 278 in May, June and July respectively and touched 302 in August.

"Atthe end of the day it is the broker who has to be convinced about the benefits of the depository. Only once he is convinced is he going to bring in clients into the system. The response from brokers to the depository has been more than encouraging if these figures are any indication. They are obviously realising the merits of faster settlement and receipt of a clean title", said Bhave.