1. Prepared by
Ragini Rathore

2.  Bad deliveries
 Fake certificates
 Loss of certificates in transit
 Mutilation of certificates
 Delays in transfer
 Delay in refund and remission of dividend etc

3.  The first depository -1947 in Germany.
 In India -1996 with the enactment of Depositories Act
1996
operations
 Regulations made by SEBI ,
 bye-laws and rules of Depositories Act and SEBI
(Depositories and Participants) Regulations Act 1996

4.  It is an organization
 assists in the allotment and transfer of securities and
securities lending
 Shares-electronic accounts

5. BANK DEPOSITORY
 Holds Funds in an Account  Hold securities in an
 Transfers Funds between account
accounts as per instruction  Transfers securities
 Facilitates transfers without between accounts as the
having to handle money instruction
 Facilitates safekeeping of
 Facilitates transfers of
money ownership without having
to handle securities
 Facilitates safekeeping of
shares

6.  National Securities Depository Limited
(NSDL)- on june 7 1996
 promoted by IDBI, UTI, NSE
 Central Depository Services Limited
(CSDL)- 1998
 promoted by Stock Exchange Mumbai in
association with Bank of Baroda, Bank of India,
SBI and HDFC Bank

7.  Depository
 Depository Participant (DP)
 Issuing company
 Investors
 Stock Exchanges and Stock Brokers
 Registrars
 Clearing Corporation/ Clearing House and Clearing
Members

8.  An agent of the depository.
 Must possess requisite qualifications prescribed by the
concerned depository
 maintaining the investor securities a/c
 an account similar to a bank a/c has to be opened with the
DP
 As per SEBI Regulations , financial institutions, banks,
custodians, stock brokers
 investor can deal with1 or more DP’s

9.  SEBI made compulsory trading of shares of the
companies listed in stock exchanges in demat form w.e.f
2nd Jan 2002
 investor has to open beneficiary a/c, If he wants to trade
in respect of the companies which have established
connectivity with NSDL & CSDL
 Beneficiary a/c-opened by the investor or a broker with a
DP of his choice to hold shares in demat form

11.  Only shares registered in the name of the a/c holder are
accepted for dematerialisation
 First open a demat a/c or security a/c with any DP of
investor’s choice
 Obtain a/c no. from his DP
 A dematerialisation request form (DRF) to be submitted to
the DP who intimates depository of the request
 DP then submits the certificate along with the DRF to the
registrar who confirms the demat request

12.  Registrar validates the request, updates records ,destroys the
certificates and informs depository who in turn credits the DP
a/c
 Depository participant updates the investor a/c and informs the
investor
 process takes about 15 days time and utmost 30 days
 An investor may demat a part of his holdings and hold the
balance in physical mode for the same security

13.  It means conversion of demat holdings back into certificates
 First he has to request DP for remat
 Investor must fill up a remat request form (RRF)
 The DP will forward the request to depository after verifying
that the shareholder has the necessary balances
 Depository will in turn intimate the registrar,RTA (registrar &
transfer agent) will print the certificates and dispatch investor

14.  NSE
 The SE , mumbai
 Calcutta Stock Exchange
 Delhi SE
 Ludhiana SE
 Bangalore SE
 Over the counter exchange of India
 Madras SE
 Inter connected SE
 Ahmedabad SE

15. ▶ DP cannot effect any debit or credit in the demat a/c of
the investor,valid authorisation of the investor is needed
▶ Regular reconciliation between DP and depositories
▶ Periodic inspection by depositories of the office of DP
and registrar.
▶ DPs exercise care and diligence while issuing Debit
Instruction Slips(DISs)
▶ DISs carry bar code and pre-printed serial no.

16. ▶ All investors have a right to receive their statement of a/c’s
periodically from the DP
▶ If the depository goes bankrupt, the creditors of the DP will
have no access to the holdings in the name of the clients of
the DP. Such investors may however transfer their holdings to
another DP
▶ Compulsory internal audit of operations of DP by practicing
Chartered Accountant every quarter
▶ Steps to be taken for safe keeping and back up of data at all
levels

17.  To the nation:
 Growing and more liquid markets
 Increase in competitiveness in the international market
place attracting many investors
 Improved prospects for privatization of public sector units
by creating a conducive environment
 Considerable reduction in delay
 Minimizes settlement risk and fraud restoring investors’
faith in the capital markets

18.  To the investors (public)
 Reduction of risks associated with loss, mutilation, theft
and forgery of physical scrip
 Elimination of financial loss from loss of physical scrip
 Greater liquidity from speedier settlements
 Reduction in delays in registration
 No requisite of filling the transfer deed, payment of
stamp duty and a lot of paper work
 Reduced transaction costs through greater efficiency

19.  To issuers:
 Up-to-date knowledge of shareholders’ names and
addresses
 Reduction in printing and distribution costs of new
issues
 Easy transfer of corporate benefits
 Improved ability to attract international investors without
having to incur expenditure of issuance in overseas
markets