Presented By:-

ANANT MISHRA
VIMAL SINGH
 Depository system in India
 Existing depositories in India
 Functions of Depository
 NSDL
 CDSL
 A depository can be compared to a bank.
 A depository holds securities ( like shares,
debentures, bonds, Government Securities, units
etc.) of investors in electronic form. Besides holding
securities, a depository also provides services
related to transactions in securities.
 A depository system is a system of computerized
book entry of securities and their transfers in the
Capital Market Transactions.
 Depository interacts with its clients / investors
through its agents, called Depository Participants
normally known as DPs.
 For any investor / client, to avail the services
provided by the Depository, has to open Depository
account, known as Demat A/c, with any of the DPs.
 BANK DEPOSITORY

Holds funds in an account Holds securities in an account

Transfers funds between accounts on the Transfers securities between accounts on the
instruction of the account holder instruction of the BO account holder

Facilitates transfer without having to handle Facilitates transfer of ownership without

money having to handle securities

Facilitates safekeeping of money Facilitates safekeeping of securities

Account Transfer: The depository gives effects to all
transfers resulting from the settlement of trades and
other transactions between various beneficial owners
by recording entries in the accounts of such beneficial
owners.

Corporate Actions:
 A depository may handle corporate actions in two ways.
 In the first case, it merely provides information to the issuer
about the persons entitled to receive corporate benefits.
 In the other case, depository itself takes the responsibility of
distribution of corporate benefits.
 Transfer and Registration:
 A transfer is the legal change of ownership of a security in the
records of the issuer.

 For effecting a transfer, certain legal steps have to be taken like

endorsement, execution of a transfer instrument and payment of
stamp duty.

 The depository accelerates the transfer process by registering the

ownership of shares in the name of the depository.

 Under a depository system, transfer of security occurs merely by

passing book entries in the records of the depositories, on the
instructions of the beneficial owners.
 Pledge:
 The securities held with NSDL may be used as collateral to
secure loans and other credits by the clients.

 In a manual environment, borrowers are required to deliver

pledged securities in physical form to the lender or its
custodian. These securities are verified for authenticity and
often need to be transferred in the name of lender.

 Use of depository services for pledging the securities makes

the process very simple and cost effective. The securities
pledged are transferred to a segregated or collateral account
through book entries in the records of the depository.
 Linkages with Clearing System:
 The clearing system performs the functions of
ascertaining the pay-in (sell) or pay-out (buy) of
brokers who have traded on the stock exchange.

 Actual delivery of securities to the clearing system

from the selling brokers and delivery of securities from
the clearing system to the buying broker is done by the
depository through electronic linkage.
 The benefits are enumerated below:-
  A safe and convenient way to hold securities;
  Immediate transfer of securities;
 Elimination of risks associated with physical certificates such as bad delivery, fake
securities, delays, thefts etc.
 Reduction in paperwork involved in transfer of securities;
 No odd lot problem, even one share can be traded;
 Nomination facility;
 Change in address recorded with DP gets registered with all companies in which
investor holds securities electronically eliminating the need to correspond with each of
them separately;
 Transmission of securities is done by DP eliminating correspondence with companies;
 Automatic credit into demat account of shares, arising out of
bonus/split/consolidation/merger etc.
 Holding investments in equity and debt instruments in a single  account.
 Who is a Depository Participant?
 A Depository Participant (DP) is an agent of the depository through
which it interfaces with the investor and provides depository services. 
 Public financial institutions, scheduled commercial banks, foreign banks
operating in India with the approval of the Reserve Bank of India, state
financial corporations, custodians, stock-brokers, clearing corporations
/clearing houses, NBFCs and Registrar to an Issue or Share Transfer
Agent complying with the requirements prescribed by SEBI can be
registered as DP. 
 A person who enjoys the benefits of ownership even though
title is in another name. 

 Any individual or group of individuals that, either directly or

indirectly, has the power to vote or influence the transaction
decisions regarding a specific security.
 Dematerialization is the process by which physical
certificates of an investor are converted to an equivalent
number of securities in electronic form and credited into the
Beneficial Owner’s account with his DP.

 Transmission is the process by which securities of a

deceased account holder are transferred to the account of his
legal heirs / nominee.
 Rematerialization is the process to get back the securities in
the physical form for which RRF (Remat Request Form) is
to be filled and DP takes care of the balances in securities
account.
Participant shall be charged the following fee for rematerialization of
securities: a fee of Rs.10 for every hundred securities or part thereof ; or a
flat fee of Rs.10 per certificate, whichever is higher
 Presently, there are two depositories in the country.
 National Securities Depositories Limited. (NSDL)
 Central Depositories Services Limited. (CDSL)

 NSDL - Having 95 Cr. Demat A/c as on 31-03-2010

- 300 DPs in India
 CDSL - Having 65 laks Demat A/c as on 31-03-2010
- 500 DPs in India
 It enables the surrender and withdrawal of securities
to, and from, the depository
 Maintains investors holding in the electronic form
 Transfer of securities
 Receipt of non cash corporate benefits like bonus,
rights and so on.
 NSDL at a Glance  (March 26, 2011)
  Accounts having Debt instruments 297,318
 Depository Participants
 DPs 293
 DP Service Centres 12,820
 DP Geographical Coverage (Cities/Towns) 1,425
 Companies Joined 8,812
 Demat Custody Quantity (mn. Securities) 4,66,310
 Demat CustodyInstrumentsValue (in Rs. Million)
 Shares 8,625 48,507,539 
 Debt/Bonds 6,9528,633,754
 CP 1,1038,70,699
 Settlement (21/03/2011 - 26/03/2011) (single side)
 Equity Shares Qty (in Million) Value (in Rs. Million)
 NSE 730  170,631 
 BSE 453 39,197
 Total 1,189 209,935
 Debt/Bonds Settlement 396,000
  
 What is SPEED-e?
 SPEED-e is a common Internet Infrastructure that
enables the Depository Participants (DPs) to
provide depository services to their clients. DEMAT
account holders (including Clearing Members)
subscribing to this facility can submit delivery
instructions to their DPs through SPEED-e website
https://speed-e.nsdl.com, instead of submitting
delivery instruction slips (in paper form) to their
DPs.
 CDSL is the secondary depository in India for
dealing in securities.
Objectives of CDSL are:-
 To accelerate the growth of scrip-less trading.
 To create competitive environment, which will be
responsive to the user`s interest and demands.
 To enhance liquidity.
 Centralized database and accounting.
 Disasters recovery.
 CDSL link up NSDL.
 Services offered by CDSL:- Dematerialization of
existing scripts, dematerialization of new issues,
reliable and efficient settlements.
 CDSL Update on Mar 28,2011
 Companies:8,110
 Depository Participants:544
 DP Service Centers:9,206
 Investor Accounts:74,97,142(Excl. Closed Accounts) 
 Demat Custody
 Quantity (in Million):1,04,880
 Value (Rs. in Million):1,03,85,320
 Equity:5,977
 Others:4,966 
 Settlement
 From Mar 21, 2011 To Mar 26, 2011
 Quantity (in Million):641
 Value (Rs. in Million):61,693
 www.sebi.gov.in
 www.cdslindia.com
 www.nsdl.co.in
THANK YOU……