Update1

to
WorkBookforNISMSeriesVI:DepositoryOperationsCertification
Examination
December16,2011

Kindlynotethefollowingupdates.CandidatesattemptingtheexaminationsfromFebruary16,2012willneedto
answerquestionsintheexaminationonthebasisofthisupdate,readalongwiththeprescribedWorkbook.

Chapter2:IntroductiontoDepository
Section2.3,bulletpointaddedwhichshouldreadas:PreventionofMoneyLaunderingAct,2002.
Section2.3.8,para1,sentenceaddedwhichshouldreadas:However,withtheapplicationofthePMLA,2002to
depositoryoperationsvideGazettenotificationdatedMay24,2007,thedocumentsneedtobemaintainedfora
periodoftenyears.
Section 2.4, Functions of a Depository, point f, last line to read as: The securities pledged/hypothecated are
transferredtoasegregatedorcollateralaccountthroughbookentriesintherecordsofNSDL.IncaseofCDSL,the
securitiespledged/hypothecatedarenottransferredtoasegregatedorcollateralaccountthroughbookentriesin
theirrecords.

Chapter3:IntroductiontoDepository
Section3.1.7,
(i) Separate Accounts, last line modified and to read as, For DP's own securities, he should open a separate
accountinthedepositorysystem.
(ii) Returns, last bullet point should read as, Internal audit report and concurrent audit report, should be
submittedatsuchperiodsasspecifiedbythedepository.
(iii) Record of Services, para should read as, The DP should maintain and preserve the following records and
documentsforaminimumperiodof5yearsasperprovisionsgivenunderRegulation49oftheSEBI(Depositories
andParticipants)Regulation,1996.However,asperPMLAandtheRulesmadethereunder,therequirementisto
keeptherecordsfortenyears.
(iv)MaintenanceandPreservationofRecords,pointdtoreadas:TheComplianceOfficeroftheParticipantis
requiredtosubmitaComplianceCertificateintheprescribedformat,athalfyearlyintervalseitherseparatelyor
throughInternalAuditReportasspecifiedbythedepository.
(v)DPtoEnsureIntegrityandBackupofData,point3deletedandpoint4and5renumberedaspoint3and
4.
(vi) DP to Ensure Integrity and Backup of Data, earlier point 4 the word tapes replaced with on external
memorydevices
Section3.3.2,pointc,para2,thewordfortnightinthelastlinereplacedwithaspertherequirementofthe
issuer.

Section3.3.3,point12thewordfifteendaysdeletedandreplacedwithsuchtimeasspecifiedbythedepository
fromtimetotime;point18thelineCDSLhoweverdoesnotspecifyanytimeperioddeleted.
Section3.3.4,Para2startingwithIntheeventof..oritsR&Tagentdeleted
ReviewQuestionNo.3deletedandreplacedwith;
3.AsperPMLA,recordsofservicesneedtobepreservedfor_______years.
(a)1

(b)5

(c)7

(d)10

Answer:(d)

Chapter4:FunctionsofDepositoryParticipantAccountOpening
Section 4.1: Concept of Intermediary account has been deleted and its reference has been deleted from all
relevantplacesinchapter4.Thelastparainsection4.1toreadas:Theclearingmemberaccountisatransitory
account.Thesecuritiesinthisaccountareheldforacommercialpurposeonly.Thesecuritiesinthisaccountwillbe
eligibleforanycorporateactionbenefitdeclared.
Section4.2:
(i)
Para 1, last sentence to read as: A beneficiary account can be in the name of an individual,
corporate,KartaofHinduUndividedFamily(HUF)asusedinNSDLand/orHUFentityasinthecaseof
CDSL,minor,bank,financialinstitution,registered(incorporated)trust,etc.orthebrokerhimselffor
thepurposeofhispersonalinvestmentsindematform.TheseaccountsareopenedwithaDP.

(ii)

Thefollowingparagraphhasbeenadded.DPsarerequiredtoopenseparateaccounts,fortheirown
investments,therebykeepingthebeneficialowneraccountsseparate.Thisistoensurethatthereis
nocominglingoftheirassetswiththatoftheirclients.

(iii)

ParaonHouseaccountversusnonhouseaccounthasbeendeleted.

Section4.2.1thefollowingsentencehasbeenaddedtothebeginningofthesecondparagraphAdemataccount
canhavemaximumthreeholders.

Section4.2.1,(II)ForCorporateInvestors:Theparashouldreadasfollows:

II.ForCorporateInvestors:AllcorporateinvestorshavetosubmitthefollowingdocumentsasprescribedbySEBI
alongwiththestipulatedaccountopeningform:

1. Memorandum&ArticlesofAssociation(MOA&AOA)&CertificateofIncorporation.
2.

Boardresolutionauthorizingopeningofdemataccountandspecifiyingthenamesofthepersonsauthorized
byBoardtooperatethesaiddemataccount.TheBoardResolutionmustspecifythemannerofoperationof
theaccountandauthoritygiventotheauthorizedsignatoriestoopenandoperatetheaccount.

3.

Names of authorized signatories, designation alongwith their specimen signatures and photographs, duly
verifiedbytheManagingDirectororCompanySecretary.

4.

Proof of address of the corporate, evidenced by the document registered with Registrar of Companies or
acknowledgedcopyofIncomeTaxReturnorBankStatementorLeaveandLicenseAgreement/Agreementfor
saleorLandlinetelephonebill/electricitybill/Pancardofthecorporateentity.

An authorized official of the DP shall verify the copies of the proof of address / identity documents with the
originaldocumentsandwriteorputastampwiththethewords:verifiedwithoriginalandaffixhis/hersignature
onthedocumentssubmittedbytheClient,whileexercisingsuchduediligence.

Section4.2.4,ClientParticipantAgreement,para2,firstlineAcopyor..clientschangedtoNSDLDPsshould
giveacopyofthedulyexecutedagreementtotheclients.

Section4.2.5,Point(a)NameofAccountHoldersshouldreadasfollows:
(a) Name(s)ofaccountholder(s)DPshouldalsoensurethatthenameinthedemataccountisasitappears
inthePANcardandtheKYCdocumentsoftheintendingBO.ifanapplicationisreceivedfromamarried
lady,alongwithaPANcardinhermaidennamealongwithhermarriagecertificate,theBOaccountcan
be opened in the married name of the lady. The DP should ensure that the name is identical to that
whichappearsonthecertificate(s)tobedematerialized,ifany.Inthecaseofajointaccount,thenames
oftheholdersshouldbeinthesameorderasappearinginthesharecertificatetobedematerialized,if
any. This is not applicable in CDSL. In CDSL, by filling uptranspositionform, the share certificateswith
sameholdersbutindifferentordercanbedematerialized.Investorsareadvisedtoopentheiraccountin
theirfullyexpandedname,i.e.,tospelltothefirstnameaswellasthemiddlename.Thiswouldobviate
anydoubtsabouttheveracityoftheinformation.Investorscandematerialiseallphysicalsecuritiesheld
inhisfullname,abridgedname,namewithinitialsoranyotherfashioninthisaccount.Byopeningthe
accountinthefullest/expandedname,chancesofwrongcredits/debitsandrejectionofdematrequests
areminimised.Forexample,theremaybetwoinvestorswiththesameinitialsandsamelastnameAK
KhannamaybeeitherArunKumarKhannaorAshokKishoreKhanna.Ifthenameisfullyspeltoutthereis
noambiguityandthereisnoneedthenfortheDPtotakestepstoverifytheidentity.Similarly,investor
candematerialisesharesheldinanyformofnamelikeA.K.Khanna,ArunK.Khanna,A.KumarKhanna,
ArunKumarK.,etc.,intooneaccount.

Section4.2.5,Point(e)MailingandCommunicationAddress,para2and3toreadas:
Para2:IncaseofNSDL,forNRIaccounts,proofisrequiredforbothaddressesthatoftheaccountholderaswell
astheconstitutedattorney.

Para 3: For corporate accounts, a copy of Memorandum of Association, Articles of Association, Certificate of
IncorporationBoardresolutionpermittingopeningofaccount,theregisteredaddressoftheCompanyaswellas
addressesoftheperson(s)authorisedtooperatetheaccountonbehalfoftheCompanyhavetobefurnished.PAN
cardofauthorizedsignatoriestobeverifiedwithoriginalandtakenonrecord.

Section4.2.5,Point(e)MailingandCommunicationAddress,thefollowinghavebeenaddedtothelastparagraph:
IncaseofCDSL,addressesoftheperson(s)authorizedtooperatetheaccountonbehalfofthecompanyneednot
befurnished.AlsoincaseofCDSL,PANcardofauthorizedsignatoriesneednotbeverifiedwiththeoriginalsor
maintainedforrecordpurpose.

Sections4.2.5,anewpoint(h)havebeenadded,whichshouldbereadasfollows:

(i)
FurtherSEBIhasissuedCirculardatedJuly29,2010whichstipulatesthatwitheffectfromMonday,
August16,2010,PANnoncompliantdemataccountsshallalsobesuspendedforcreditotherthan
the credits arising out of automatic corporate actions. The circular also clarifies that other credits
including credits from IPO / FPO / Rights Issue / Offmarket transactions or any secondary market
transactionsshallnotbeallowedintosuchaccounts.
(ii)

Section4.2.5,earlierpointhrenamedasi.

(iii)

The following sentence added to point (b) of the Operating guidelines on SEBI circular providing
clarificationsonPA,.isdulysignedbytheaccountholderandattestedbyanyoneofthefollowing
entitiesofthecountrywhereNRIandFNisresiding:

TheIndianEmbassy/ConsulateGeneral
NotaryPublic
AnyCourt/Magistrate/Judge
LocalBanker

(iv)
(v)

(vi)
(vii)
(viii)

Point (c), the last sentence to read as: The exemption, however, would be subject to the DPs
associatedwithNSDLcollectingdocumentaryevidenceinsupportofsuchclaimoftheinvestors.
Point (d), should read as: In case of HUF, Association of Persons (AoP), Partnership Firm,
Unregistered Trust, etc. though the BO account would be in the name of natural persons (in CDSL
HUF account can be in the name of HUF entity also). PAN of the respective HUF, AoP, Partnership
Firm,UnregisteredTrust,etcshallbeobtained.
Point (g) under the header, Operating guidelines on SEBI circular providing clarifications on PAN
hasbeendeleted.
Point (i) and (ii) under the header Operating guidelines for the same are given below: has been
deleted.
PointI,detailsofintroducer,linehasbeenaddedattheendoftheparawhichshouldreadas:The
conceptofintroducerisonlywithNSDL.

Section4.2.6,thefollowingsentencehasbeenaddedtothelastparagraphunderheadingTransposition:Asper
CDSL DP operating instructions, such request is to be submitted along with physical certificates at the time of
dematerialization.

Section4.2.7,theparagraphshouldbereadasfollows:ThedepositoryaccountofanHUFcanbeopenedonlyin
thenameofitsKartaincaseofNSDLandHUFentityincaseofCDSL.DPsshouldclearlydesignatetheaccountin
thenameoftheKarta/HUFentityassuch.PancardandbankaccountproofofHUFshouldbeobtained.Theform
for Opening a HUF accounts is the same as the individual account. While opening such accounts the DP should
select the 'HUF' subtype in the 'Individual' category of account opening. HUF accounts cannot be opened with
jointholders.

Section4.2.8,underSubheadingDetailsofIntroducerthefollowingsentencehasbeenadded:Theconceptof
introducerisonlywithNSDL.

Section4.2.9,FormsforMinor,
(i)
Line added to para 1 which should read as The minor shall be the first and sole holder in the
account.
(ii)

Point(II),Subpoint3shouldbereadasfollows:IncaseofNSDL,suspendtheaccountfordebitand
disable the standing instruction for credit pertaining to the account of Minor. In case of CDSL, it is
onlyrequiredtosuspendtheaccountfordebit.

(iii)

Point(II),Subpoint8thefollowinghasbeenadded:ThisprocedureisnotapplicableinCDSL.Ifthe
minorturnedmajorintendstocontinuewiththesameaccount,thentheguardiandetailsaretobe
deletedandNomination,ifgivenbytheclientistoberecordedinthesystem.

(iv)

Point (II), Sub point 9 the following has been added: The procedures mentioned above can be
followedonlyifthewordMinordoesnotappearagainsttheaccountholdernames.Otherwise,a
newaccounthastobeopenedfortheclientwhohasturnedfromMinortoMajor.

Section4.2.10,
(i)
Point(c)thefollowingsentencehasbeenadded:PANdetailsoffirmtobeenteredinthesystem.
Pan cards of the partners, in whose name the account is being opened, are also to be taken on
record.
(ii)

Point(e)added:AsperCDSLoperatinginstructions,partnershipdeedistobetakenonrecord.

Section4.2.11,thelastbulletpointshouldreadas:BothCDSLandNSDLrequirethattheaccountopeningformbe
signed by the NRI. This account can be operated under signature of account holder(s) or a Power of Attorney

Holder. However, according to the CDSL operating instructions, accounts cannot be opened / closed under
signatureofpowerofattorneyholder.

Section 4.2.11, para 3, the following lines have been added: CDSL however does not need an introducer for
accounts to be opened by an illiterate person(s) and In case of CDSL, the DP is not required to read out the
deliveryinstructionformtotheclient.

Section 4.2.12, the following sentence added to the paragraph: As per CDSL operating instructions, a system
generatedconfirmationletterforhavingopenedtheaccountshouldbesenttotheBOalongwithotherformsand
instructionslips.

Section 4.2.13, header has been modified and should read as, Standing Instructions / Purchase confirmation
waiver.

Box4.1:Pointno.iiideleted.

Section4.3.1,para1,lastsentencetoreadas,However,w.r.tCDSL,theconceptofCMBPIdisnotthereandthe
systemgeneratesa16digitIDsimilartotheBOID.TheClearingmemberaccountswithCDSLcanbeopenedbya
DPjustlikeanyotherdemataccountaftertheformalitiesasmentionedintheCDSLDPOperatinginstructionsare
fulfilled.

Section4.4.1,
(i)
Point(b)thefollowingsentencehasbeenadded:Thisisapplicableonlyiftheclientwantstoavailof
freetransferfacility.Elsetoreducethebalancetozero,theclientmaytransferthesecuritiestoany
otheraccountordeliverthesecuritiesforpayinofhismarkettransactions.
(ii)

Para 4, sentence has been added which should read as, In CDSL, account closure can be initiated
evenifbalancesarepresentintheaccount.CDSLsystemwillchangestatusofsuchanaccounttoTO
BECLOSEDandclosetheaccountwhenallbalancesarereducedtozero.

Section4.4.3,ClosurebyDP,sentencehasbeenaddedwhichwillreadasInCDSL,a30daysnoticeisrequired.
Section4.4.4,thefollowingsentenceaddedhasbeenaddedtotheparagraph:Theaboveprocedureisspecificto
NSDLDPs.InCDSL,thereisnorequirementofapprovalofdepositoryinthiscategory.InCDSLtheCMcanclosehis
clearingaccountswithoneDPandopenthesamewithanyotherDPwithoutanyneedofapprovalfromCDSL.

Section4.4.5,Massshiftingofaccounts
(i)
Point (3), last sentence to read as, In case the Participant is unable to close the account due to
pendingdemat/rematrequests,ISINinsuspendedstatus,fractionalpositionorduetoopenpledges
etc.,theParticipantfreezestheaccounti.e.'suspendedfordebitandcredit'incaseofNSDLandfor
CDSLitgetsconvertedTobeclosedstatus.
(ii)

Point(4),thefollowingsentencehasbeenadded:IncaseofCDSLifthetransferiseffectedthrough
theTransfermodule,nochargesarelevied.Applicationneedstobemadeforwaiveronlyincaseof
shiftingofaccountsthroughinterdepository.

Section4.6,
(i)

Bulletpoint1,sentencehasbeenadded:NotpermittedinCDSL.

(ii)

Point(b)and(c),linehasbeenaddedOnlyinNSDLrespectively.

(iii)

Pointno.(2)and(3),linehasbeenadded,ThisisnotamandatoryrequirementasperCDSL.

(iv)

UnderChangeofnameinCorporateAccounts,newbulletpointaddedto(i)whichshouldreadas:
ListofauthorizedsignatoriesalongwiththespecimensignaturedulyverifiedbyMD/Co.Secretary.

(v)

UnderChangeofnameinCorporateAccounts,point(ii),lastparatoreadasWhilecarryingoutthe
modifications,thenameofanyexistingaccountholderofanaccountcanneitherbedeletednorany
newnamecanbeadded.DPscanonlymakechangestothename(s)ofexistingaccountholder(s)of
theaccount.NotallowedinCDSL.However,CDSLDPsarerequiredtoforwardtherequestalongwith
documentstoCDSLforeffectingthechange.

(vi)

UnderChangeofSignature,point(2)toreadas,NewsignatureshouldbedulyattestedbyClient's
banker,onlyincasewherethebeneficiaryownercannotcomepersonallyandpoint(3)asClient
shouldvisitDP'sofficepersonallyandproducevalidproofofidentity.Clientsopeningaccountwith
NSDLDPs,needstobringthelatesttransactionstatementofitsaccount.

Chapter5:FunctionsofDepositoryParticipantTransmissionandNomination
Section 5.2, last para, line has been added, A minor can nominate through a guardian. A minor can also be
appointedasanomineerepresentedbyaguardian.Iftheaccountisheldjointlyalljointholderswillberequiredto
sign the nomination form. Nominee can be only individual. Nonindividual entities such society, trust, body
corporate,HUFcannotbeappointedasnominee.

Section5.3.1,firstbulletpoint,shouldbereadas,itissubmittedtotheParticipantbytherightfulClient(s).The
nominationformhastobesignedbyallholders.APOAholdercannotnominate.

Section 5.3.1, sixth bullet point, line has been added, CDSL Nomination form does not have provision for
mentioningsecurities.Nominationisapplicabletoentireholding.

Section5.3.1,lastbulletpointdeleted.Sentencehasbeenadded:AsperCDSLOperatinginstructions,nominees
photograph,signature,orincaseofminor,theguardianssignaturearenotrequired.

Section 5.3.1,last para, first line to be read as, Upon the death of the sole holder or the death of all the joint
holders, as the case may be, the nominee shall request the Participant in writing alongwith an Original death
certificate or a copy of the same(duly notarized/attested) issued by the competent authority to transmit the
securitiescoveredbythenominationtotheaccountoftheNominee,heldwithanyDepository,aspertheClient
Master Report available with the Depositories, if the nominee has a demat account in individual capacity with
anotherDP.

Section5.3.2,secondpara,firstsentencetobereadas,Incasethesuccessorsexpresstheirinabilitytoproduce
eitherofthedocumentsmentionedaboveandifthemarketvalueofthesecuritiesheldineachoftheaccountsof
the deceased BO as on the date of application for transmission is not more than Rs. 1 lakh, DP may admit the
requestfortransmission.

Section5.3.2,pointc,d,e,fremarkedasi,ii,iii,ivandnewpointcaddedwhichshouldbereadas,
Anyoneormoreofthefollowing.FootnoteaddedtotheworddeceasedBOinthesamesection.Therenamed
pointsI,ii,iii,andivtobesubpointsofnewpointc.

Section 5.3.3, para 1, second sentence to read as, The surviving Client(s) shall make an application to the
ParticipantinthespecifiedformgivenbytheDepository,alongwithoriginaloracopyofthedeathcertificateduly
notarized/attestedbyagazetteofficer.

Section 5.3.3, first bullet point, line added and should be read as, The surviving holder(s) to have a separate
accountwithanyDP,ClientMasterReportofsuchaccounts,thewordinstructionforminsecondandthirdbullet
pointreplacedwithwordtransmissionform.

Section 5.3.4, first sentence to be read as: Upon death of the Karta of a Hindu Undivided Family (HUF), the
survivingmember(s)oftheHUFmayappointanotherpersonasthenewKartaoftheHUF.

Section 5.3.4, point ii should be read as An appropriate order by a competent court, (this is not a required in
CDSL).

Section5.3.4,lastpara,contentaddedwhichshouldbereadas:ItmaybenotedthatinCDSLthepreviousaccount
neednotbeclosedandthesameaccountcancontinue.Thenewkartashallsubmitthenewlsitofmembersanda
no objection from the surviving membersof the HUF for him toact as a karta of the HUF. Thenew karta shall
recordchangeinsignaturetooperatetheaccount.
In CDSL, in case of a partial partition, the others can still continue the HUF in the existing name. In case of full
partition,theentireHUFisdissolved.Inboththeabovecases,thekartacantransfersharestothememberswho
seek partition. If the transfer cannot be amicably settled,the family members cangoto a court and transfer of
sharescanthenbebasedonthecourtdirection.

Section5.3.4,lastpara,thewordsurvivingmembersdeletedandreplacedwithwordclaimants.

Chapter6:FunctionsofDepositoryParticipantDematerialisation

Section6.2.2,
(i)
Pointno.3,bulletno.2hasbeendeleted.
(ii)

Pointno.3,bulletno.6,subpoint4,anewsentencehasbeenadded:InCDSL,DRFrequirestheBO
to sign as per the signature recorded with the DP and as per the signature recorded with the
company. The DP official is required to verify the signature of the BO as per its records with the
signatureonDRFundersignaturewithDP.

(iii)

Pointno.7toreadas:DPshouldensurethatthecertificatesaredefacedandmutilatedbeforethey
are sent to the Issuer / RTA. The security certificates are marked (defaced) with the words
Surrendered for Dematerialization with DP name and BO ID. DP must ensure that the security
certificates submitted for dematerialization to the issuer or its RTA, bear the DP name, DP ID and
Client ID. This is a precautionary measure to prevent misuse of share certificates by anyone. The
certificatesaremutilatedbypunchingtwoholesatthetopofthecertificatesbyusingnormaloffice
perforator.

(iv)

ChecklistforDP,pointk,sentencehasbeenaddedwhichshouldreadasAsperCDSLOperating
instructions,DPshoulddefaceandmutilatethecertificatesandnottheclient.

Section6.2.5,contenthasbeenaddedafterthefirstpara.Thecontentshouldreadas;

Original or copy of the death certificate of the deceased holder(s), duly notarized or attested by a Gazetted
Officer.TheDPshouldensurethatthedemataccountisinthenameofthesurvivingholdersonly.

ProceduretobefollowedifPhysicalSecuritiesarelostinTransit

In cases where the Issuer/RTA has received information, setupby theDP, about dematerialization electronically
fromCDSLbutphysicalcertificateshavenotbeenreceived,theproceduretobefollowedisasunder:

The DP shall provide the Issuer/RTA proof of dispatch and also confirm that the certificates are not returned
undeliveredattheirend.

IfthecertificateshavenotbeenreturnedundeliveredandarenottraceableattheIssuer/RTAsoffice,thenitwill
beassumedthatthecertificateshavebeenlostintransit.Insuchacase,theDPshallexecuteanIndemnityBondin
favoroftheIssuer/RTA.

IftheIssuer/RTAhasalreadyrejectedtheoriginaldematrequest,thenafreshdematrequestistobesetupby
theDPandtheIndemnityBonddulyexecutedshallbesubmittedtotheIssuer/RTA,alongwithanewDRN.The
Issuer/RTA shall accept the demat request and carry out dematerialization on the basis of the Indemnity Bond
givenbytheDP.

In cases where the Issuer/RTA has rejected the demat request (for such a reason where the rejection can be
rectified by the BO/DP), and despatched the same to the DP, and such certificates are lost in transit, then an
IndemnityBondistobeexecutedandsubmittedtotheIssuer/RTAalongwithanewDRN.Insuchcases,theDPis
requiredtoobtainpriorconsentfromtheIssuer/RTAforexecutionofIndemnity.

However,incaseswheretheIssuer/RTAhasrejectedthedematrequest(forsuchareasonwheretherejection
cannotberectifiedbytheBO/DP),theIssuer/RTAwillretainthedocuments.Suchrejectionsmaybeonaccountof
Fake / Forged / Duplicates already issued / Court Injunctions, etc. In such cases, the DP should obtain rejection
lettersfromtheIssuer/RTA&handoverthesametotheBOinordertoenabletheBOtotakeupthematterwith
theIssuer/RTAconcerned.

ProcedureforDematerializationofShareswhichareheldinmorethanthreenames

Incasethenumberofjointholdersaremorethanthree,theDPhastoprocessthedematerializationrequestas
perusualprocedureensuringthatthemainBOnameismentionedas1stAccountHolderandthebalancejoint
holders are accommodated in the two joint holders names but ensuring that the pattern of holding as per the
certificatetallieswiththepatternofholdingaspertheaccount.

Such an account should be used only for the purpose of dematerialization and once all certificates have been
dematerialized, such account should beclosed and shares transferred to a new account opened in the name of
maximumthreeholders

Chapter7:FunctionsofDepositoryParticipantTradingandSettlement
Section7.1,footnoteaddedagainstthewordstandinginstructionswhichshouldreadasSIisalsoidentifiedas
PurchasewaiverorConfirmationwaiverinCDSL.

Section7.2,thewordInstructionnumberreplacedwithwordInstructionID.
Section 7.2, third para, line 4 to be read as: In NSDL, the account will be debited immediately on receipt of
adequate balances in the account. In CDSL, the account will be debited after predefined intervals of time on
receiptofadequatebalancesintheaccount.
Section 7.3, Para 5, line added which will read as; The type and number of accounts opened may vary across
depositories,thewordorBrokerpoolaccountaddedafterthewordBrokerSettlementAccount
Section 7.3.1.4, Para 1, the following content has been deleted instructions to transfer securities from Client
accounttoCMPoolaccount,InterSettlementInstructions,CMPooltoCMPoolaccounttransfersandDeliveryOut
Instructions,etc.
Section 7.3.1.5, heading Tracking of securities received for payin, point 3, the word SPEED replaced with the
wordIDeAS

Section7.3.1.5,headingAutomaticDeliveryout,point1,theparatostartwith;InNSDL,deliveryout.
Section7.3.1.5,headingAutomaticDeliveryout,point2,subpointa,NonPariPassuSharesormultipleISINs
deleted.
Section7.3.1.5,headingAutomaticDeliveryout,point2,subpointb,ShiftingofCMSettlementAccountfrom
oneParticipanttoanotherParticipant,lastlineaddedwhichshouldreadasHowever,thisisapplicableonlywith
respecttoNSDL.
Section 7.3.1.5, heading Automatic Deliveryout, point 3 added, and the content to read as: In case of CDSL,
thereareoptionsofearlypayin,normalpayinandautopayin.
Early payin facility is used to avail margin exemptions and other applicable benefits. The CC / CH maintain
separateearlypayinaccountsforeachCMwherethesecuritiesforearlypayinhavetobedelivered.Foravailing
marginexemption,theCM/BOcangiveearlypayininstructionstoDPfromonedaypriortothedayoftrading
uptothepayindayoranysuchtimeasmaybespecifiedbythestockexchanges.OnreceiptofinstructionstheDP
verifies the same and enters the early payin instruction in the CDSL system and thereafter the securities get
transferredfromtheconcernedBO/CMaccounttotheearlypayinaccount.Theexecutionofearlypayinwill
takeplaceonlyifadequatebalanceisavailablewiththeCM/BOaccount.

Normal payin facility can be used by a CM [applicable only in case of BSE CMs, set up of normal payin.
InstructionsfromnonBSECMaccountsarenotallowed]orthesellerBOtodeliversecuritiestotheCC/CHofthe
stockexchangebygivingnormalpayininstructiontotheDP.Thesenormalpayininstructionscanbegivenany
timefromtheTdaytothepayindaytillthepayintime,evenifnobalanceisavailableintheaccount.

IncaseofBSEPayin,atthetimeofpayin,CDSLearmarksthebalanceintheaccountsforwhichthenormal
payininstructionshasbeenenteredbytheDP,totheextentofquantityspecified(orpart)inthenormal
payininstruction.TheaccountsoftheCM/BOareaccordinglydebitedduringpayouttime.

In case of nonBSE payin at the time of payin, balance in the BO account for which the normal payin
instructionshavebeenenteredbytheDPswillbedebited,totheextentofquantityenteredinnormalpay
ininstructions(orpart)andwillbecreditedtotherespectiveCMaccounts.

Autopayin

AfacilityisavailabletoBSECMsonwrittenrequesttoCC/CH(i.e.BOISL).ByusingthisoptiontheCMwill
notberequiredtogiveanypayininstructionstohisDPandthesecuritieswillbeautomaticallyconsidered
forpayin.ThedetailsofautopayincanbeviewedontheCDSLsystemfromT+1dayafternoon,afterthe
autopayininstructionareuploadedbyCC/CH.Atthedesignatedpayintime,thesecuritiesforwhichauto
payin instructions have been generated are earmarked in the designated CM account and considered
automaticallybytheCHforpayin.Debitofsecuritiesaredoneatthetimeofpayout.

AfacilityisalsoavailabletoNSECMsonwrittenrequesttoCC/CH(i.e.NSCCL).CMswhohaveavailedthis
optionsecuritiesforpayinwillbereportedusingfollowinglogic

IfearlypayinquantityismorethanAutoDO,noquantitywillbedebitedfromCMsaccount

IfearlypayinquantityislessthanAutoDO,quantitywillbedebitedtotheextentdifferencebetween
AutoDOandearlypayin
In case of no early payin but Auto DO is generated, quantity will be debited to the extent Auto DO

quantity

In case where no Auto DO is generated entire quantity available in CMs settlement pocket will be
debited
ThedetailsofautopayincanbeviewedontheCDSLsystemfromT+1afternoon,aftertheautopayininstructions
areuploadedbyCC/CH.Atthedesignatedpayintime,thesecuritiesforwhichautopayininstructionshavebeen
generatedquantitywillbedebitedfromtheCMaccountaspertheaforesaidlogicandwillbecreditedtotheCC/
CHhouseaccount

For trades done on exchanges, other than BSE, the auto payin is the default option, where auto payin
instructions are not generated by the CC / CH. At the designated payin time, the securities that are
availableinCMsaccountundertherespectivesettlementpocketareautomaticallyconsideredforpayin.

Section7.3.1.5,headingInterdepositorytransfer,bulletpointno.7,shouldreadas,ThedeadlinetimeforDPsto
verify & release Inter Depository Transferdelivery/ receipt instructions is 8 p.m. on weekdays and 2.30p.m. on
Saturdays.W.e.f.September26,2011inaninterdepositorytransferfromNSDLaccounttoCDSLaccount,where
receiving CDSL account is a CM account and securities credited under appropriate settlement id can only be
consideredagainsttheCMssettlementpayinobligation.

Chapter8:FunctionsofDepositoryParticipantPledge&Hypothecation
Chapter8heading,footnoteaddedwhichshouldreadasItmaybenoted,thatthetermhypothecationisused
onlyinNSDL.

Section8.2.1,
(i)
Para 1, the word agreement number replaced with unique system generated number (pledge
sequence number). Also a line added, which should read as (Entering the agreement number is
optionalinCDSLsystem).
(ii)

Para 2 should read as: The DP then enters the details of the request in DP system as a
pledge/hypothecation. On entering the details, a pledge sequence number for the request is
generated. The DP then verifies it and confirms the requests. Securities are then debited from the
freeorlockedinbalancesandcreditedaspledgedbalancesofthepledgor.TheDPintimatestothe
pledgor, the pledge sequence number. Figure 8.1 gives the procedure for pledging of demat
shares.

Section8.2.2,
(i)
Para1,firstsentenceshouldreadas:Onceapledge/hypothecationrequesthasbeencreatedand
verified, the pledgor submits the duly stamped and signed PRF tothepledgee alongwith the letter
generatedconfirmingthepledgesetup.
(ii)

Figure8.1,points2and3toreadas:
2.PledgorgivesapledgerequesttohisDPwhoentersitinthesystem.Securitiesaretransferred
fromFreebalancetoPledgesetupbalanceinthepledgorsaccount.Thepledgerequestisavailable
tothepledgeeDPthroughdepositorysystem.
3.PledgeeDPgivesapledgeconfirmationrequesttohisDPwhoentersitonthedepositorysystem.
Status of the pledge request changes to Accepted Verified. Balance moves from Pledge setup
balancetoPledgebalance.

Section8.2.3
(i)
IntheHeading,wordUnpledgedaddedafterthewordClosure.
(ii)

In the content wherever the word closure was used, it has been replaced with the word un
pledging/closure.

(iii)

Para 3, should be read as: The DP executes the order accepting/rejecting the un
pledge/hypothecationclosurerequestinDPsystemaspertheinstructionsgivenintheform.Incase
ofrejectionbythepledgee,theDPentersthereasonforrejectioninDPsystemasspecifiedinthe
form. The acceptance/rejection of unpledge/hypothecation closure confirmation is electronically
communicatedtoDPsystemofthepledgor'sDP.Thesecuritiesacceptedforunpledge/closuregets
debitedfromthepledgedbalancesofthepledgorandcreditedtoitsfree/lockedinbalances.Incase
of rejection by the pledgee, the securities continue to remain as pledged balances in the pledgor's
account.ThereasonsforrejectionaredisplayedinDPsystemofthepledgor'sDP.

(iv)

Lineaddedattheendofthepara3whichshouldreadas:Therejectionreasonsarenotpresentin
CDSLsystem.IfthepledgeeDPisrejectingtheunpledgerequest,hecanenterthereasonforsamein
aremarkfieldprovidedforthispurpose.

(v)

Figure8.2,wordunpledgeaddedafterthewordclosure.

Section8.2.4,Figure8.3,wordunpledgeaddedafterthewordclosure.

Section8.2.5,Para2,thelineTheintimationisgiventothepledgor'sDPthroughDMandthestatusofthepledge
changesto"ClosedVerified,isdeleted.

Section8.2.6,Lineaddedtotheheader,itshouldreadasInvocationofhypothecation(NotapplicableinCDSL).

Section8.2.7,para1,wordsaddedtothestartofthepara,InNSDL,a.

Chapter9:SpecialServicesCorporateActions
Section9.1,
(i)
UnderRecordDatelineaddedattheendoftheparawhichshouldreadas:Thisdateisreferredto
astheRecordDateanddepositorysystemprovidesholdingreporti.e.listofBOshavingholdingsin
theISINoftheissuerasofendofthedayofrecorddate.
(ii)

ContentunderasubheadingBookclosureStartDate/EndDateaddedwhichshouldreadas:Book
ClosureStartDate/EndDate:IncertaincasesIssuermaysetupacorporateactionspecifyingBook
closurestartdateandbookclosureenddate.InsuchcaseThedepositorysystemgeneratesholding
reporti.e.listofBOshavingholdingsintheISINoftheissuerasofendofthedayofonedaypriorto
bookclosurestartdate.

Section 9.2.5, Line added to the header, it should read as Rights of Lender (under stock lending scheme) (Not
applicableinCDSL).

Chapter10:SpecialServicesPublicIssues
Para1,line1toreadasTheprimarymarketprovidesthechannelforraisingfundsfrominvestorsthroughsaleof
newsecurities;theissuersofsecuritiesissue(createandsell)newsecuritiesintheprimarymarkettoraisefunds
forinvestmentand/ortodischargesomeobligation.

Section10.1,
Para1toreadasbelow:Thepresentprocedurefollowedforgettingdematallotmentinpublicissue
(i)
isbygivingoptioninapplicationform,tosubscribetotheissueeitherinphysicalformorelectronic
form. Investors can apply in public offerings to get allotments directly in dematerialised form. To
receivethesecuritiesinelectronicform,investormustopenademataccountthroughanyDPwith
any depository before making an application. For this purpose, the application form should have
provisionforinvestorstofurnishtheirdemataccountnumberalongwiththefollowinginformation:

o DepositoryName
o DP'sName
o DPlD
o BeneficiaryAccountNumber(BOID)
SEBI guidelines require that all public issues of the size of Rupees ten crores and above be
compulsorilymadeindematform.

(ii)

Para3,secondsentencetoreadasThedepositorywillcreditthesecuritiestotheallotteeaccounts
ontheexecutiondateandtheIssuer/itsR&Tagentinformtheinvestorsofthecreditofsecuritiesin
theelectronicformbysendingtheallotmentadvice.

Section10.1.1,
(i)
Para 1 to read as: The depositories have developed their own systems to facilitate application,
processingandallotmentofsecuritiesinprimarymarket.Givenbelowisbroadlistoffunctionswhich
arefollowedbyNSDLanditsDPs.
(ii)

Point 2, line added at the end of the point which should read as or directly to the collection
bank/centreintheapplicationform.

(iii)

Point 3 should be read as: The DPs shall capture the details such as client id, issue number,
application form number, application date, requested quantity for the ISIN, bank details etc of the
applicationinthePublicOfferfunctionalityintheDPsystemandreleasethesametothedepository.

(iv)

Point5and6deleted.

(v)

Point 7 & 8 renumbered as 5 & 6. The new point 5 to be read as: After the process of
allotment is completed in the depository, DPs receive the allotment information through the
depositorysystem.TheaccountsofallthesuccessfulallotteeswillbecreditedontheBOD/EODof
theallotmentdate.

Section10.1.1.1,
(i)
Para1toreadasDepositoryParticipantswhichmayhavetheirbranchnetworksacrossthecountry
may need to adhere to the below mentioned points while accepting application forms for public
issues,ifsomentionedbythedepository.However,theprocessmentionedbelowisnotapplicableto
CDSL.
(ii)

Point2toreadasThebranchesshallensurethatthedetailsaretransmittedtoitsmainofficein
suchawayasintimatedbytheDepositoryfromtimetotime.

Chapter11:SpecialServicesDebtInstruments&GovernmentSecurities
Section11.4.1,
(i)
DematerialisationofPhysicalSecurities,lineaddedtopara2,whichshouldreadas:Someofthe
detailsasmentionedabovemaynotberequiredbyboththedepositories.
(ii)

ProcedureforTransferringGovernmentSecuritiesinSGLFormtoDepositoryaccount,lineaddedto
para2,whichshouldreadasNotapplicabletoCDSLandItmaybenotedhere,thateachdepository
may have its own specific requirement details apart from the ones, which have been mentioned
above.

(iii)

Footnote added to heading Settlement of RBI trades which should read as: This facility is not
enabledatCDSLasonOctober2011.

(iv)

The word Form iii replaced with the word designated form in para under heading Purchase by
DepositoryClientandSalebyDepositoryClient.

(v)

Rematerialisation of Government Securities Para 2 should read as: On receipt of the debit
confirmationfromRBI,thedepositoriesconfirmtheacceptanceofRRFGSandforwardthephysical
certificatesalongwiththeformoftransfertotheclientdirectly.Incasetherequestwasfortransfer
toanSGLaccountwithothereligibleentity,thedepositoryshouldconfirmtheacceptanceofRRFto
theDP,afterobtainingapprovalfromRBI.OnreceiptofsuchconfirmationfromRBI,thedepository
removesthebalancefromtheclient'saccount.TheDPtheninformstheclientaccordingly.

Chapter12:SpecialServicesWarehouseReceipts

Section12.1,
(i)
Thewordpersonsinpara1replacedwiththewordmembers/investors.
(ii)
UnderImportantpointspertainingtowarehousereceiptsareprovidedbelow,point2,shouldread
as:Accountsopenedunderthisagreementshallholdonlyelectronicwarehousereceiptsandcannot
bemixedupwithsecurities.DPsshouldensurecomplianceofthisandincasesecuritiesgetcredited
into this account, the DPs shall take necessary action to transfer the securities to the originating /
appropriateaccount.
(iii)
UnderImportantpointspertainingtowarehousereceiptsareprovidedbelow,point4,shouldread
as: The depository informs to the commodity exchanges relating to activation of commodities
identificationnumbercalledtheInternationalCommodityIdentificationNumber(ICIN)(equivalentto
ISIN)/CommodityIdentifierasandwhensuchICINsareactivatedinthesystem.Dependingonthe
typeofcommodity,grade,validity,expirydate,nameandlocationofwarehouse,theexchangesallot
ICINtoeachcommodity.ICINforsamecommoditydiffersfromexchangetoexchange.
(iv)
UnderImportantpointspertainingtowarehousereceiptsareprovidedbelow,point5,shouldread
as:Initialcreditofelectronicwarehousereceiptsintodemataccountandrevalidationofelectronic
warehousereceiptswillbeeffectedbywayofcorporateaction(i.e.debittheoldICINandcreditthe
newICINofthesamecommodityhavingdifferentgrade,validityand/orexpirydate).
(v)
Under,Importantpointspertainingtowarehousereceiptsareprovidedbelow,point7,shouldread
as:Atthetimeoftakingdeliveryinphysicalmode,clientinitiatesarematrequestthroughtheDP
using the Physical Delivery Request Form (PDRF). DP shall issue acknowledgment for receipt of the
rematrequestbyenteringrematrequest(transaction)numberontheacknowledgmentportionand
attest the signature of the client on the copy of PDRF. Client will submit this acknowledgment,
attested copy of PDRF and letter generated by the depository system (duly signed by authorized
signatoryoftheDP)tothewarehouseatthetimeoftakingphysicaldelivery.Oncethecommoditys
expirydateisover,investorhastotakephysicaldeliverybywayofremat.
(vi)
Under Important points pertaining to warehouse receipts are provided below, point no. 8 added,
which should read as, Since ICIN for the same commodity differs from exchange to exchange,
commoditytraded/settled(inelectronicform)withoneexchangecannotbeapartofsettlementof
tradesforanotherexchange.
(vii)
Under Important points pertaining to warehouse receipts are provided below, point no. 9 added,
whichshouldreadas,DPsarerequiredtosendtransactioncumholdingstatementtotheinvestors
asspecifiedinoperatinginstructions.