Depository participant

DEPOSITORY

• A “Depository” is a provider of facility for holding securities .

• It is a kind of bank for securities like shares, debentures, bonds, etc.

DEPOSITORY IN INDIA

• National Securities Depository Ltd. – NSDL

• Central Depository Services Ltd. - CDSL

DEPOSITORY PARTICIPANT •Agent of the depository.

•Intermediary between the depository and the

investors.

•Registered with SEBI.

CONT…

• Organization – holds securities for TRADING.

• Shares, Debentures, Mutual Funds, Derivatives and Commodities.

DEPOSITORY IN INDIA

• National Securities Depository Ltd. – NSDL

Having 95 lakh Demat A/c - 300 DPs in India

• Central Depository Services Ltd. - CDSL –

Having 65 lakh Demat A/c - 500 DPs in India

HOW DO DEPOSITORY OPERATE?

• Interacts with its investors.

• Through its agents, called Depository Participants normally known as DPs.

• By opening Demat A/C WITH DPS

• Agreement to be made between the parties.

IMPORTANT POINTS

• Registered owner of Securities- Physical certificates – INVESTOR

electronic form- DEPOSITORY

• Beneficial Owner (BO) - INVESTOR

SERVICES PROVIDED BY THE DEPOSITORY

• Dematerialisation ( demat) - converting physical certificates to electronic form

• Rematerialisation ( remat) is reverse of demat.

• Transfer of securities, change of ownership.

BENEFITS OF DEPOSITORY• Immediate transfer of

shares

• No stamp duty on such transfers

• Reduced transaction cost

• Transparency

BENEFITS (CONT…)

Elimination of risks - associated in dealing with Physical certificates - loss / theft / forgery /etc.