WHAT is a DEPOSITORY ?

A depository is an organization where the securities of an investor are held in electronic form, at the request of the investor through the medium of a Depository Participant If an investor wants to utilize the services offered by a depository, he has to open an account with the depository through its Depository Participant. This is similar to opening an account with any of the branches of a bank in order to utilize the services of that bank

WHO is a DEPOSITORY PARTICIPANT ?

A DP is an interface between customers and the depository A customer opens an account with a DP and commences operations Balances are maintained with the depository and are available through the DP DP intimates customers status transactions from time to time of holdings or

WHO can be a DEPOSITORY PARTICIPANT ?

A Depository Participant (DP) is an agent of the depository and is authorized to offer depository services to investors In terms of the Depositories Act, 1996, only the following entities

are eligible to become a Depository Participant.

1. Financial Institutions, 2. Banks, including approved foreign banks, 3. Recognised stock exchange 4. A non-banking finance company, 5. A custodian of securities approved by Government of India,

DIFFERENCE BETWEEN BANK & DEPOSITORY

BANK
Holds Funds in an Account

DEPOSITORY
Hold securities in an account

Transfers Funds between accounts Transfers securities between on the instruction of the account holder. accounts on the instruction of the account holder Facilitates transfers of Facilitates transfers without having ownership without having to to handle money handle securities

Facilitates safe-keeping of money

Facilitates safekeeping of shares

DEPOSITORY SERVICES IN INDIA

NSDL :National Securities Depository Limited First and largest depository in India, established in August 1996. National Stock Exchange is linked directly to NSDL. PROMOTERS OF NSDL - Industrial Development Bank of India Limited, Unit Trust of India ,National Stock Exchange of India Limited SHARE-HOLDERS OF NSDL-State Bank of India, Oriental Bank of Commerce, Citibank, Standard Chartered Bank, HDFC Bank Limited,The Hongkong and Shanghai Banking Corporation Limited, Deutsche Bank, Dena Bank , Canara Bank, Union Bank of India.

Facilities offered by NSDL

Maintains record of benefecial owners. Undertakes materialisation of certificates. Undertakes rematerialisation of securities,if and when required. Undertakes settlement of off market-trades. Settlement of securities which are traded in the electronic mode on the stock exchanges. Indemnifies against missappropiations or defaults by the participants.

CDSL: Central Depository Services Limited

This is the second depository in India. This was formed and registered in 1999. Bombay Stock Exchange are linked directly to CDSL. PROMOTERS OFCDSL - Bombay Stock Exchange Limited, Bank of India, Bank of Baroda, State Bank of India and HDFC Bank

SHAREHOLDERS OF CDSL - Standard Chartered Bank Centurion ,Bank of Punjab Ltd. ,Canara Bank, Union Bank of India, Bank of Maharashtra, Jammu and Kashmir Bank Limited, The Calcutta Stock Exchange Association Limited.

BENEFITS of Depository Services

A safe, convenient way to hold securities Instant transfer of securities; Stamp duty is not required on 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; Reduction in the cost of transaction, No odd lot problem, even one share can be sold; Facility of nomination; 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; Credited automatically into demat account of shares, arising out-of bonus or split or consolidation or merger etc.

Services offered by a DP
Account Opening & Maintenance Dematerialization of Securities Rematerialization of Securities Transfer of Securities Pledging of Securities