SEBI has recently made some moves for making the depositories (an organisation which holds securities like shares, debentures, bonds, government securities, mutual fund units etc) the authority of distributing non cash as well as cash benefits. Now I would call that a real smooth way of trading for the investors.
What it implies is the benefits such as dividends, bonus shares, interest payments etc will be given by the organisation holding the securities instead of the companies which issue them. This is really going to create a single point of contact for an investor for all his queries and requests. Centralised payments are always the best way of keeping track and increasing the efficiency.
The way NSDL (one of the depositories) has taken steps to facilitate this is by applying for the “Payment Bank” licences to RBI. Payment banks can only accept deposits up to 1 lakh and make payments whenever necessary.
Last year around 400 complaints were lodged for non receipt of dividends which was not really easy to trace and resolve for SEBI since each one was concerned to a different entity altogether.
A big thumbs up for the move and that too strategically merged with payment bank licence. This move will really boost the market operations in an efficient way. I feel the only problem is are we ready with that kinda infrastructure to support that purpose?? Also the bank details of all the investors may be available partially which creates risk of wrong remittances as such. The financial inclusion and awareness, linking of adhaar to bank accounts( although adhaar is of no use apart from address proof for sim cards at present 😛 ) may help to resolve this problem. With this I hope the markets become more robust towards protecting investor rights and giving them a hassle free trading experience.