Lesson 3 Depositories Act, 1996

Key Concepts One Learning Objectives

Should Know
To understand:
• Depository
Ȉ ƒ•‹  ‘ ‡’–‘ˆ†‡’‘•‹–‘”›ƒ†Š‘™‹–™‘”•
• Depository Ȉ ‡’‘•‹–‘”› ’ƒ”–‹ ‹’ƒ–•ǡ ‹–• ˆ— –‹‘•ǡ ”‹‰Š–• ƒ† ‘„Ž‹‰ƒ–‹‘• ‘ˆ
Participant (DP) †‡’‘•‹–‘”‹‡•ǡ„‡‡ϐ‹–•‘ˆ†‡’‘•‹–‘”‹‡•ǡ†‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘’”‘ ‡••ǡ
ƒ†–Š‡”‡‰—Žƒ–‘”›ˆ”ƒ‡™‘”ˆ‘”†‡’‘•‹–‘”›‹ †‹ƒǤ
• Issuer
Ȉ ‹‰Š–• ƒ† „Ž‹‰ƒ–‹‘• ‘ˆ ‡’‘•‹–‘”‹‡•ǡ ƒ”–‹ ‹’ƒ–•ǡ ••—‡”• ƒ†
• ‡‡ϐ‹ ‹ƒŽ™‡” ‡‡ϐ‹ ‹ƒŽ™‡”•
ȋȌ
Ȉ ‘™‡”•‘ˆ ǡ‡’‘•‹–‘”‹‡•ƒ†‡–”ƒŽ ‘˜‡”‡–
• Registered —”–Š‡”ǡ ƒ ‘’ƒ› ‡ ”‡–ƒ”› ‹ ”ƒ –‹ ‡ ‹• ƒ—–Š‘”‹•‡† „›   –‘
™‡” ‘†— –‹–‡”ƒŽȀ ‘ —””‡–ƒ—†‹–‘ˆ†‡’‘•‹–‘”‹‡•’ƒ”–‹ ‹’ƒ–•ƒ†
• Security ƒŽ•‘–‘ ‘†— ––Š‡”‡ ‘ ‹Ž‹ƒ–‹‘‘ˆ•Šƒ”‡ ƒ’‹–ƒŽǤ

Lesson Outline
• Introduction Ȉ ‡„‡”•Š‹’‹‰Š–•‹”‡•’‡ –
‘ˆ•‡ —”‹–‹‡•Š‡Ž†„›ƒ
Ȉ ‡’‘•‹–‘”››•–‡Ȃ
Depository
˜‡”˜‹‡™
Ȉ ‘™‡”‘ˆ‡–”ƒŽ ‘˜‡”‡–
• Depository Functions
–‘ƒ‡—Ž‡•
Ȉ ‡‡ϐ‹–•‘ˆ‡’‘•‹–‘”››•–‡
Ȉ ‘™‡”‘ˆ‡’‘•‹–‘”‹‡•–‘ƒ‡
Ȉ ‘†‡Ž•‘ˆ‡’‘•‹–‘”› ›‡Ǧƒ™•
Ȉ ‡‰ƒŽ‹ƒ‰‡ Ȉ  ȋ‡’‘•‹–‘”‹‡•ƒ†
Participants)
• Depository Participant
Ȉ ‡‰—Žƒ–‹‘•ǡʹͲͳͺ
• Issuer
Ȉ ‡ ‘ ‹Ž‹ƒ–‹‘Ƭ—†‹–—†‡”
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘
 ȋ‡’‘•‹–‘”‹‡•ƒ†
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘ ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡ
ʹͲͳͺ
Ȉ Ž‡ –”‘‹ ”‡†‹–‹‡™ ••—‡•
Ȉ –‡”ƒŽ—†‹–‘ˆ‘’‡”ƒ–‹‘•‘ˆ
Ȉ ”ƒ†‹‰›•–‡
Depository Participants
Ȉ ‘”’‘”ƒ–‡ –‹‘•
Ȉ ‘ —””‡–—†‹–
Ȉ ‡‰ƒŽ ”ƒ‡™‘”
Ȉ ‘Ž‡‘ˆ‘’ƒ›‡ ”‡–ƒ”›
Ȉ ‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸
Ȉ Ǧ
Ȉ ‘™‡”‘ˆ
Ȉ 
Ȉ ‡ƒŽ–‹‡•ƒ††Œ—†‹ ƒ–‹‘
Ȉ 
Ȉ ˆˆ‡ ‡•ƒ†‘‰‹œƒ ‡
Ȉ       
•   
 74 Lesson 3 • EP-SLCM

Regulatory Framework
Ȉ Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸
Ȉ Š‡ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺ
Ȉ ›‡ǦŽƒ™•‘ˆ‡’‘•‹–‘”›
Ȉ —•‹‡••—Ž‡•‘ˆ‡’‘•‹–‘”›Ǥ
Ȉ Š‡‘’ƒ‹‡• –ǡʹͲͳ͵
Ȉ Š‡ †‹ƒ–ƒ’ –ǡͳͺͻͻ
Ȉ ‡ —”‹–‹‡•ƒ†š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒ –ǡͳͻͻʹ
Ȉ ‡ —”‹–‹‡•‘–”ƒ –•ȋ‡‰—Žƒ–‹‘Ȍ –ǡͳͻͷ͸
Ȉ ‡ƒ‹”ƒ•ƒ –‹‘ȋ”‘Š‹„‹–‹‘Ȍ –ǡͳͻͺͺ
Ȉ  ‘‡ƒš –ǡͳͻ͸ͳ
Ȉ ƒ‡”•ǯ‘‘•˜‹†‡ ‡ –ǡͳͺͻͳ
Ȉ ”‡˜‡–‹‘‘ˆ‘‡›ƒ—†‡”‹‰ –ȋȌǡʹͲͲʹ

INTRODUCTION
‡’‘•‹–‘”‹‡•ƒ”‡‹•–‹–—–‹‘•–Šƒ–Š‘Ž†•‡ —”‹–‹‡•‘ˆ ‹˜‡•–‘”•‹†‡ƒ–‡”‹ƒŽ‹œ‡†Ȁ‡Ž‡ –”‘‹ ˆ‘”ƒ†’”‘˜‹†‡†‡ƒ–
•‡”˜‹ ‡• –‘ –Š‡ ‹˜‡•–‘”• –Š”‘—‰Š –Š‡‹” ‡’‘•‹–‘”› ƒ”–‹ ‹’ƒ–• ȋȌǤ Š‡”‡ ƒ”‡ –™‘ †‡’‘•‹–‘”‹‡• ‹ ‘—” ‘—–”›
ƒ‡Ž›ǡ ƒ–‹‘ƒŽ ‡ —”‹–‹‡•‡’‘•‹–‘”›‹‹–‡†ȋȌƒ† ‡–”ƒŽ ‡’‘•‹–‘”›‡”˜‹ ‡•ȋ †‹ƒȌ ‹‹–‡†ȋȌǤ
†‡”‡ƒ Š‡’‘•‹–‘”›ǡ–Š‡”‡ƒ”‡”‡‰‹•–‡”‡†‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–•ȋ•Ȍǡ™Š‹ Š’”‘˜‹†‡˜ƒ”‹‘—••‡”˜‹ ‡•–‘–Š‡
‹˜‡•–‘”•Ž‹‡‘’‡‹‰ƒ†ƒ‹–ƒ‹‹‰‘ˆƒ‡ƒ–ƒ ‘—–ǡ†‡ƒ–‡”‹ƒŽ‹œƒ–‹‘‘ˆ•Šƒ”‡•ǡ‡– Ǥ

Š‡‹ ‡’–‹‘‘ˆ†‡’‘•‹–‘”›•›•–‡‹–Š‡ †‹ƒƒ’‹–ƒŽƒ”‡–Šƒ•„‡‡•–ƒ”–‡††—”‹‰–Š‡ͻͲǯ•ǤŠ‡ˆ–ǡˆ‘”‰‡”›ǡ

—–‹Žƒ–‹‘‘ˆ ‡”–‹ˆ‹ ƒ–‡•ƒ†‘–Š‡”‹””‡‰—Žƒ”‹–‹‡•’”‘˜‹†‡†–Š‡‹••—‡””‹‰Š––‘”‡ˆ—•‡–Š‡–”ƒ•ˆ‡”‘ˆƒ•‡ —”‹–›Ǥ
††‡† ‘•–• ƒ† †‡Žƒ›• ‹ •‡––Ž‡‡–ǡ ”‡•–”‹ –‡† Ž‹“—‹†‹–› ƒ† ƒ†‡ ‹˜‡•–‘” ‰”‹‡˜ƒ ‡ ”‡†”‡••ƒŽ –‹‡
‘•—‹‰Ǥ‘‘„˜‹ƒ–‡–Š‡•‡’”‘„Ž‡•ǡ–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸™ƒ•’ƒ••‡†ƒ†•—„•‡“—‡–Ž›–Š‡”‡‰—Žƒ–‹‘•
™‡”‡‘–‹ϐ‹‡†Ǥ
LEGAL FRAMEWORK
Š‡Ž‡‰ƒŽˆ”ƒ‡™‘”ˆ‘”ƒ†‡’‘•‹–‘”›•›•–‡Šƒ•„‡‡Žƒ‹††‘™„›–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸ƒ†‹•”‡‰—Žƒ–‡†„›
 ǤŠ‡†‡’‘•‹–‘”›„—•‹‡••‹ †‹ƒ‹•”‡‰—Žƒ–‡†„›Ȃ
• Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸
• Š‡ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺ
 Lesson 3 • Depositories Act, 1996 75

• ›‡ǦŽƒ™•‘ˆ‡’‘•‹–‘”›
• —•‹‡••—Ž‡•‘ˆ‡’‘•‹–‘”›Ǥ
’ƒ”–ˆ”‘–Š‡ƒ„‘˜‡ǡ‡’‘•‹–‘”‹‡•ƒ”‡ƒŽ•‘‰‘˜‡”‡†„› ‡”–ƒ‹’”‘˜‹•‹‘•‘ˆǣ
• Š‡‘’ƒ‹‡• –ǡʹͲͳ͵
• Š‡ †‹ƒ–ƒ’ –ǡͳͺͻͻ
• ‡ —”‹–‹‡•ƒ†š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒ –ǡͳͻͻʹ
• ‡ —”‹–‹‡•‘–”ƒ –•ȋ‡‰—Žƒ–‹‘Ȍ –ǡͳͻͷ͸
• ‡ƒ‹”ƒ•ƒ –‹‘ȋ”‘Š‹„‹–‹‘Ȍ –ǡͳͻͺͺ
•  ‘‡ƒš –ǡͳͻ͸ͳ
• ƒ‡”•ǯ‘‘•˜‹†‡ ‡ –ǡͳͺͻͳ

Š‡Ž‡‰ƒŽˆ”ƒ‡™‘”ˆ‘”†‡’‘•‹–‘”›•›•–‡‹–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸’”‘˜‹†‡•ˆ‘”–Š‡‡•–ƒ„Ž‹•Š‡–‘ˆ—Ž–‹’Ž‡
†‡’‘•‹–‘”‹‡•Ǥ›„‘†›–‘„‡‡Ž‹‰‹„Ž‡ˆ‘”’”‘˜‹†‹‰†‡’‘•‹–‘”›•‡”˜‹ ‡•—•–„‡ˆ‘”‡†ƒ†”‡‰‹•–‡”‡†ƒ•ƒ ‘’ƒ›
—†‡” –Š‡ ‘’ƒ‹‡•  –ǡ ʹͲͳ͵ ƒ† •‡‡ ”‡‰‹•–”ƒ–‹‘ ™‹–Š   ƒ† ‘„–ƒ‹ ƒ ‡”–‹ϐ‹ ƒ–‡ ‘ˆ ‘‡ ‡‡– ‘ˆ
—•‹‡••ˆ”‘–Š‡ ‘ˆ—Žϐ‹ŽŽ‡–‘ˆ–Š‡’”‡• ”‹„‡† ‘†‹–‹‘•Ǥ
Š‡‹˜‡•–‘”•‘’–‹‰–‘Œ‘‹†‡’‘•‹–‘”›‘†‡ƒ”‡”‡“—‹”‡†–‘‡–‡”‹–‘ƒƒ‰”‡‡‡–™‹–Š†‡’‘•‹–‘”›–Š”‘—‰Šƒ
’ƒ”–‹ ‹’ƒ–™Š‘ƒ –•ƒ•ƒƒ‰‡–‘ˆ–Š‡†‡’‘•‹–‘”›ǤŠ‡ƒ‰‡ ‹‡••— Šƒ• —•–‘†‹ƒ•ǡ„ƒ•ǡϐ‹ƒ ‹ƒŽ‹•–‹–—–‹‘•ǡ
Žƒ”‰‡ ‘”’‘”ƒ–‡ „”‘‡”ƒ‰‡ ϐ‹”•ǡ ‘Ǧ„ƒ‹‰ ϐ‹ƒ ‹ƒŽ ‘’ƒ‹‡• ‡– Ǥ ƒ – ƒ• ’ƒ”–‹ ‹’ƒ–• ‘ˆ †‡’‘•‹–‘”‹‡•Ǥ Š‡
‘’ƒ‹‡•‹••—‹‰•‡ —”‹–‹‡•ƒ”‡ƒŽ•‘”‡“—‹”‡†–‘‡–‡”‹–‘ƒƒ‰”‡‡‡–™‹–Š–Š‡‡’‘•‹–‘”›Ǥ

DEPOSITORY SYSTEM – AN OVERVIEW

Ȉ †‡’‘•‹–‘”›‹•ƒ‘”‰ƒ‹œƒ–‹‘™Š‹ ŠŠ‘Ž†••‡ —”‹–‹‡•
ȋŽ‹‡ •Šƒ”‡•ǡ †‡„‡–—”‡•ǡ „‘†•ǡ ‰‘˜‡”‡–  ‘”†‹‰ –‘ ‡ –‹‘ ʹȋ‡Ȍ ‘ˆ –Š‡ ‡’‘•‹–‘”‹‡•
•‡ —”‹–‹‡•ǡ —–—ƒŽ ˆ—† —‹–• ‡– ǤȌ ‘ˆ ‹˜‡•–‘”• ‹  –ǡͳͻͻ͸ǡ‡’‘•‹–‘”›‡ƒ•ƒ ‘’ƒ›ˆ‘”‡†
‡Ž‡ –”‘‹ ˆ‘”ƒ––Š‡”‡“—‡•–‘ˆ–Š‡‹˜‡•–‘”•–Š”‘—‰Š ƒ† ”‡‰‹•–‡”‡† —†‡” –Š‡ ‘’ƒ‹‡•  –ǡ ʹͲͳ͵
ƒ ”‡‰‹•–‡”‡† †‡’‘•‹–‘”› ’ƒ”–‹ ‹’ƒ–Ǥ – ƒŽ•‘ ’”‘˜‹†‡• ƒ† ™Š‹ Š Šƒ• „‡‡ ‰”ƒ–‡† ƒ ‡”–‹ϐ‹ ƒ–‡ ‘ˆ
•‡”˜‹ ‡•”‡Žƒ–‡†–‘–”ƒ•ƒ –‹‘•‹•‡ —”‹–‹‡•Ǥ ”‡‰‹•–”ƒ–‹‘ —†‡” ‡ –‹‘ ͳʹȋͳȌ ‘ˆ –Š‡  
Ȉ  ‡’‘•‹–‘”› ‹• ƒ ‘”‰ƒ‹œƒ–‹‘ Ž‹‡ ƒ ‡–”ƒŽ ƒ  –ǡͳͻͻʹǤ
™Š‡”‡–Š‡•‡ —”‹–‹‡•‘ˆƒ•Šƒ”‡Š‘Ž†‡”ƒ”‡Š‡Ž†‹–Š‡
‡Ž‡ –”‘‹ ˆ‘”ƒ––Š‡”‡“—‡•–‘ˆ–Š‡•Šƒ”‡Š‘Ž†‡”–Š”‘—‰Š–Š‡‡†‹—‘ˆƒ‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–Ǥ‘—–‹Ž‹œ‡
–Š‡ •‡”˜‹ ‡• ‘ˆˆ‡”‡† „› ƒ ‡’‘•‹–‘”›ǡ –Š‡ ‹˜‡•–‘” Šƒ• –‘ ‘’‡ ƒ ƒ ‘—– ™‹–Š –Š‡ ‡’‘•‹–‘”› –Š”‘—‰Š ƒ
‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–Ǥ
Ȉ  –Š‡ †‡’‘•‹–‘”› •›•–‡ǡ •Šƒ”‡ ‡”–‹ϐ‹ ƒ–‡• „‡Ž‘‰‹‰ –‘ –Š‡ ‹˜‡•–‘”• ƒ”‡ –‘ „‡ †‡ƒ–‡”‹ƒŽ‹œ‡† ƒ† –Š‡‹”
ƒ‡• ƒ”‡ ”‡“—‹”‡† –‘ „‡ ‡–‡”‡† ‹ –Š‡ ”‡ ‘”†• ‘ˆ †‡’‘•‹–‘”› ƒ• „‡‡ϐ‹ ‹ƒŽ ‘™‡”•Ǥ ‘•‡“—‡– –‘ –Š‡•‡
Šƒ‰‡•ǡ –Š‡ ‹˜‡•–‘”•ǯ ƒ‡• ‹ –Š‡ ‘’ƒ‹‡•ǯ ”‡‰‹•–‡” ƒ”‡ ”‡’Žƒ ‡† „› –Š‡ ƒ‡ ‘ˆ †‡’‘•‹–‘”› ƒ• –Š‡
”‡‰‹•–‡”‡†‘™‡”‘ˆ–Š‡•‡ —”‹–‹‡•Ǥ
• TŠ‡†‡’‘•‹–‘”›ǡŠ‘™‡˜‡”ǡ†‘‡•‘–Šƒ˜‡ƒ›˜‘–‹‰”‹‰Š–•‘”‘–Š‡”‡ ‘‘‹ ”‹‰Š–•‹”‡•’‡ –‘ˆ–Š‡•Šƒ”‡•ƒ•
ƒ”‡‰‹•–‡”‡†‘™‡”ǤŠ‡„‡‡ϐ‹ ‹ƒŽ‘™‡” ‘–‹—‡•–‘‡Œ‘›ƒŽŽ–Š‡”‹‰Š–•ƒ†„‡‡ϐ‹–•ƒ†‹••—„Œ‡ ––‘ƒŽŽ–Š‡
Ž‹ƒ„‹Ž‹–‹‡•‹”‡•’‡ –‘ˆ–Š‡•‡ —”‹–‹‡•Š‡Ž†„›ƒ†‡’‘•‹–‘”›Ǥ
Ȉ –Š‡‡’‘•‹–‘”›‘†‡ǡ ‘”’‘”ƒ–‡ƒ –‹‘••— Šƒ• •ǡ”‹‰Š–•ǡ ‘˜‡”•‹‘•ǡ„‘—•ǡ‡”‰‡”•ȀƒƒŽ‰ƒƒ–‹‘•ǡ
•—„†‹˜‹•‹‘• Ƭ ‘•‘Ž‹†ƒ–‹‘• ƒ”‡ ƒ””‹‡† ‘—– ™‹–Š‘—– –Š‡ ‘˜‡‡– ‘ˆ ’ƒ’‡”ǡ •ƒ˜‹‰ „‘–Š ‘•– Ƭ –‹‡Ǥ
ˆ‘”ƒ–‹‘‘ˆ„‡‡ϐ‹ ‹ƒ”›‘™‡”•‹•”‡ƒ†‹Ž›ƒ˜ƒ‹Žƒ„Ž‡ǤŠ‡‹••—‡”‰‡–•‹ˆ‘”ƒ–‹‘‘ Šƒ‰‡•‹•Šƒ”‡Š‘Ž†‹‰
’ƒ––‡”‘ƒ”‡‰—Žƒ”„ƒ•‹•ǡ™Š‹ Š‡ƒ„Ž‡•–Š‡‹••—‡”–‘‡ˆϐ‹ ‹‡–Ž›‘‹–‘”–Š‡ Šƒ‰‡•‹•Šƒ”‡Š‘Ž†‹‰•Ǥ
Ȉ Š‡ ‡’‘•‹–‘”› •›•–‡ Ž‹• –Š‡ ‹••—‹‰ ‘”’‘”ƒ–‡•ǡ ‡’‘•‹–‘”› ƒ”–‹ ‹’ƒ–• ȋ•Ȍǡ –Š‡ ‡’‘•‹–‘”‹‡• ƒ†
Ž‡ƒ”‹‰ ‘”’‘”ƒ–‹‘•‘ˆ•–‘ ‡š Šƒ‰‡•ǤŠ‹•‡–™‘”ˆƒ ‹Ž‹–ƒ–‡•Š‘Ž†‹‰‘ˆ•‡ —”‹–‹‡•‹–Š‡•‘ˆ–ˆ‘”ƒ†
‡ˆˆ‡ –•–”ƒ•ˆ‡”•„›‡ƒ•‘ˆƒ ‘—––”ƒ•ˆ‡”•Ǥ
 76 Lesson 3 • EP-SLCM

Ȉ †‡”–Š‡’”‘˜‹•‹‘•‘ˆ–Š‡‡’‘•‹–‘”‹‡• –ǡ–Š‡•‡‡’‘•‹–‘”‹‡•’”‘˜‹†‡˜ƒ”‹‘—••‡”˜‹ ‡•–‘‹˜‡•–‘”•ƒ†

‘–Š‡”ƒ”–‹ ‹’ƒ–•‹–Š‡ ƒ’‹–ƒŽƒ”‡–ǡ•— Šƒ•ǡ Ž‡ƒ”‹‰‡„‡”•ǡ•–‘ ‡š Šƒ‰‡•ǡ‹˜‡•–‡–‹•–‹–—–‹‘•ǡ
„ƒ• ƒ† ‹••—‹‰ ‘”’‘”ƒ–‡•Ǥ Š‡•‡ ‹ Ž—†‡ „ƒ•‹  ˆƒ ‹Ž‹–‹‡• Ž‹‡ ƒ ‘—– ‘’‡‹‰ǡ †‡ƒ–‡”‹ƒŽ‹œƒ–‹‘ǡ
•‡––Ž‡‡– ‘ˆ –”ƒ†‡• ƒ† ƒ†˜ƒ ‡† ˆƒ ‹Ž‹–‹‡• Ž‹‡ ’Ž‡†‰‹‰ǡ †‹•–”‹„—–‹‘ ‘ˆ ‘Ǧ ƒ•Š ‘”’‘”ƒ–‡ ƒ –‹‘•ǡ
distribution of securities to ƒŽŽ‘––‡‡•‹ ƒ•‡‘ˆ’—„Ž‹ ‹••—‡•ǡ‡– Ǥ
Ȉ †‡’‘•‹–‘”› ƒ‘–ƒ –ƒ•ƒ†‡’‘•‹–‘”›—Ž‡••‹–‘„–ƒ‹•ƒ ‡”–‹ϐ‹ ƒ–‡‘ˆ ‘‡ ‡‡–‘ˆ„—•‹‡••ˆ”‘–Š‡ Ǥ
Ȉ ‘—–‹Ž‹œ‡–Š‡•‡”˜‹ ‡•‘ˆƒ†‡’‘•‹–‘”›ǡ–Š‡‹˜‡•–‘”Šƒ•–‘‘’‡ƒƒ ‘—–™‹–Š–Š‡†‡’‘•‹–‘”›–Š”‘—‰Šƒ
’ƒ”–‹ ‹’ƒ–ǡ•‹‹Žƒ”–‘–Š‡‘’‡‹‰‘ˆƒƒ ‘—–™‹–Šƒ›‘ˆ–Š‡„ƒ„”ƒ Š‡•–‘—–‹Ž‹œ‡•‡”˜‹ ‡•‘ˆ–Šƒ–„ƒǤ
‡‰‹•–”ƒ–‹‘‘ˆ–Š‡†‡’‘•‹–‘”›‹•”‡“—‹”‡†—†‡”–Š‡ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺ
ƒ†‹•ƒ’”‡Ǧ ‘†‹–‹‘–‘–Š‡ˆ— –‹‘‹‰‘ˆ–Š‡†‡’‘•‹–‘”›Ǥ‡’‘•‹–‘”›ƒ††‡’‘•‹–‘”›’ƒ”–‹ ‹’ƒ–„‘–Šƒ”‡
”‡‰—Žƒ–‡†„›–Š‡ Ǥ

BANK–DEPOSITORY - AN ANALOGY

BANK DEPOSITORY
‘Ž†•ˆ—†•‹ƒƒ ‘—– ‘Ž†••‡ —”‹–‹‡•‹ƒƒ ‘—–
”ƒ•ˆ‡”•ˆ—†•„‡–™‡‡ƒ ‘—–•‘–Š‡‹•–”— –‹‘‘ˆ ”ƒ•ˆ‡”• •‡ —”‹–‹‡• „‡–™‡‡ ƒ ‘—–• ‘ –Š‡
–Š‡ƒ ‘—–Š‘Ž†‡” ‹•–”— –‹‘‘ˆ–Š‡‡‡ϐ‹ ‹ƒŽ‘™‡”ƒ ‘—–Š‘Ž†‡”
ƒ ‹Ž‹–ƒ–‡• –”ƒ•ˆ‡” ‘ˆ ‘™‡”•Š‹’ ™‹–Š‘—– Šƒ˜‹‰ –‘
ƒ ‹Ž‹–ƒ–‡•–”ƒ•ˆ‡”™‹–Š‘—–Šƒ˜‹‰–‘Šƒ†Ž‡‘‡›
Šƒ†Ž‡•‡ —”‹–‹‡•
 ‘—–ƒ„Ž‡ˆ‘”–Š‡•ƒˆ‡‡‡’‹‰‘ˆˆ—†•  ‘—–ƒ„Ž‡ˆ‘”–Š‡•ƒˆ‡‡‡’‹‰‘ˆ•‡ —”‹–‹‡•

DEPOSITORY FUNCTIONS
•  ‘—–‘’‡‹‰
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘
Ȉ ‡––Ž‡‡–
Ȉ ‹–‹ƒŽ—„Ž‹ ˆˆ‡”•ȋ ǯ•Ȍǡ ‘”’‘”ƒ–‡„‡‡ϐ‹–•
Ȉ ”‡ƒ–‹‘‘ˆ‡ —„”ƒ ‡

Difference between Depository and Custodian

‘–Š†‡’‘•‹–‘”›ƒ† —•–‘†‹ƒ•‡”˜‹ ‡•ƒ”‡”‡•’‘•‹„Ž‡ˆ‘”•ƒˆ‡‡‡’‹‰‘ˆ•‡ —”‹–‹‡•„—––Š‡›ƒ”‡†‹ˆˆ‡”‡–‹–Š‡
•‡•‡–Šƒ––Š‡‡’‘•‹–‘”› ƒŽ‡‰ƒŽŽ›–”ƒ•ˆ‡”„‡‡ϐ‹ ‹ƒŽ‘™‡”•Š‹’ǡ™Š‹Ž‡ƒ —•–‘†‹ƒ ƒ‘–ǤŠ‡ƒ‹‘„Œ‡ –‹˜‡‘ˆ
ƒ‡’‘•‹–‘”›‹•–‘‹‹‹œ‡–Š‡’ƒ’‡”™‘”‹˜‘Ž˜‡†™‹–Š–Š‡‘™‡”•Š‹’ǡ–”ƒ†‹‰ƒ†–”ƒ•ˆ‡”‘ˆ•‡ —”‹–‹‡•Ǥ

BENEFITS OF DEPOSITORY SYSTEM

–Š‡†‡’‘•‹–‘”›•›•–‡ǡ–Š‡‘™‡”•Š‹’ƒ†–”ƒ•ˆ‡”‘ˆ•‡ —”‹–‹‡•–ƒ‡•’Žƒ ‡„›‡ƒ•‘ˆ‡Ž‡ –”‘‹ „‘‘‡–”‹‡•Ǥ
––Š‡‘—–•‡–ǡ–Š‹••›•–‡”‹†•–Š‡ ƒ’‹–ƒŽƒ”‡–‘ˆ–Š‡†ƒ‰‡”•”‡Žƒ–‡†–‘Šƒ†Ž‹‰‘ˆ’ƒ’‡”ǤŠ‡•›•–‡’”‘˜‹†‡•
—‡”‘—•†‹”‡ –ƒ†‹†‹”‡ –„‡‡ϐ‹–•ǡŽ‹‡ǣ
• Elimination of bad deliveries Ǧ  –Š‡ †‡’‘•‹–‘”› ‡˜‹”‘‡–ǡ ‘ ‡ –Š‡ Š‘Ž†‹‰• ‘ˆ ƒ ‹˜‡•–‘” ƒ”‡
†‡ƒ–‡”‹ƒŽ‹•‡†ǡ–Š‡“—‡•–‹‘‘ˆ„ƒ††‡Ž‹˜‡”›†‘‡•‘–ƒ”‹•‡‹Ǥ‡Ǥ–Š‡› ƒ‘–„‡Š‡Ž†Dz—†‡”‘„Œ‡ –‹‘dzǤ –Š‡
’Š›•‹ ƒŽ ‡˜‹”‘‡–ǡ „—›‡” ‘ˆ •Šƒ”‡• ™ƒ• ”‡“—‹”‡† –‘ –ƒ‡ –Š‡ ”‹• ‘ˆ –”ƒ•ˆ‡” ƒ† ˆƒ ‡ — ‡”–ƒ‹–› ‘ˆ –Š‡
“—ƒŽ‹–›‘ˆƒ••‡–•’—” Šƒ•‡†ǡ™Š‹Ž‡‹ƒ†‡’‘•‹–‘”›‡˜‹”‘‡–‰‘‘†‘‡› ‡”–ƒ‹Ž›„‡‰‡–•‰‘‘†“—ƒŽ‹–›‘ˆ
ƒ••‡–•Ǥ
• Ž‹‹ƒ–‹‘‘ˆƒŽŽ”‹••ƒ••‘ ‹ƒ–‡†™‹–Š’Š›•‹ ƒŽ ‡”–‹ϐ‹ ƒ–‡•Ǧ‡ƒŽ‹‰‹’Š›•‹ ƒŽ•‡ —”‹–‹‡•Šƒ˜‡ƒ••‘ ‹ƒ–‡†
•‡ —”‹–›”‹••‘ˆ–Š‡ˆ–ǡ—–‹Žƒ–‹‘‘ˆ ‡”–‹ϐ‹ ƒ–‡•ǡŽ‘••‘ˆ ‡”–‹ϐ‹ ƒ–‡•†—”‹‰‘˜‡‡–•–Š”‘—‰Šƒ†ˆ”‘–Š‡
”‡‰‹•–”ƒ”•ǡ –Š—• ‡š’‘•‹‰ –Š‡ ‹˜‡•–‘”• –‘ –Š‡ ‘•– ‘ˆ ‘„–ƒ‹‹‰ †—’Ž‹ ƒ–‡ ‡”–‹ϐ‹ ƒ–‡•ǡ Ž‘•• ‘ˆ ‡”–ϐ‹ ƒ–‡• ƒ†
ƒ†˜‡”–‹•‡‡–•ǡ‡– ǤŠ‹•’”‘„Ž‡†‘‡•‘–ƒ”‹•‡‹–Š‡†‡’‘•‹–‘”›‡˜‹”‘‡–Ǥ
 Lesson 3 • Depositories Act, 1996 77

• Immediate transfer and registration of securities Ǧ –Š‡†‡’‘•‹–‘”›‡˜‹”‘‡–ǡ‘ ‡–Š‡•‡ —”‹–‹‡•ƒ”‡

”‡†‹–‡†–‘–Š‡‹˜‡•–‘”ǯ•ƒ ‘—–‘’ƒ›‘—–ǡŠ‡„‡ ‘‡•–Š‡Ž‡‰ƒŽ‘™‡”‘ˆ–Š‡•‡ —”‹–‹‡•ǤŠ‡”‡‹•‘ˆ—”–Š‡”
‡‡†–‘•‡†‹––‘–Š‡ ‘’ƒ›ǯ•”‡‰‹•–”ƒ”ˆ‘””‡‰‹•–”ƒ–‹‘Ǥ ˆ•‡ —”‹–‹‡•ƒ”‡’—” Šƒ•‡†‹–Š‡’Š›•‹ ƒŽ‡˜‹”‘‡–ǡ
–Š‡ ‹˜‡•–‘” Šƒ• –‘ •‡† ‹– –‘ –Š‡ ‘’ƒ›ǯ• Šƒ”‡ ”ƒ•ˆ‡” ‰‡– •‘ –Šƒ– –Š‡ Šƒ‰‡ ‘ˆ ‘™‡”•Š‹’ ƒ „‡
”‡‰‹•–‡”‡†ǤŠ‹•’”‘ ‡••—•—ƒŽŽ›–ƒ‡•ƒ”‘—†–Š”‡‡–‘ˆ‘—”‘–Š•ƒ†‹•”ƒ”‡Ž› ‘’Ž‡–‡†™‹–Š‹–Š‡•–ƒ–—–‘”›
ˆ”ƒ‡™‘”‘ˆ–™‘‘–Š•–Š—•‡š’‘•‹‰–Š‡‹˜‡•–‘”–‘‘’’‘”–—‹–› ‘•–‘ˆ†‡Žƒ›‹–”ƒ•ˆ‡”ƒ†–‘”‹•‘ˆŽ‘••
‹–”ƒ•‹–Ǥ‘‘˜‡” ‘‡–Š‹•ǡ–Š‡‘”ƒŽŽ›ƒ ‡’–‡†’”ƒ –‹ ‡‹•–‘Š‘Ž†–Š‡•‡ —”‹–‹‡•‹•–”‡‡–ƒ‡•‹Ǥ‡Ǥ not to
”‡‰‹•–‡”–Š‡ Šƒ‰‡‘ˆ‘™‡”•Š‹’Ǥ ‘™‡˜‡”ǡ‹ˆ–Š‡‹˜‡•–‘”•‹••ƒ„‘‘ Ž‘•—”‡–Š‡•‡ —”‹–‹‡•ƒ”‡‘–‰‘‘†ˆ‘”
†‡Ž‹˜‡”›ƒ†–Š‡‹˜‡•–‘”™‘—Ž†ƒŽ•‘•–ƒ†–‘Ž‘‘•‡–Š‡‹” ‘”’‘”ƒ–‡‡–‹–Ž‡‡–•Ǥ
• ƒ•–‡”†‹•„—”•‡‡–‘ˆ‘Ǧ ƒ•Š ‘”’‘”ƒ–‡„‡‡ϐ‹–•Ž‹‡”‹‰Š–•ǡ„‘—•ǡ‡– ǤȂ‡’‘•‹–‘”›•›•–‡’”‘˜‹†‡•
ˆ‘” †‹”‡ – ”‡†‹– ‘ˆ ‘Ǧ ƒ•Š ‘”’‘”ƒ–‡ ‡–‹–Ž‡‡–• –‘ ƒ ‹˜‡•–‘”• ƒ ‘—–ǡ –Š‡”‡„› ‡•—”‹‰ ˆƒ•–‡”
†‹•„—”•‡‡–ƒ†ƒ˜‘‹†‹‰”‹•‘ˆŽ‘••‘ˆ ‡”–‹ϐ‹ ƒ–‡•‹–”ƒ•‹–Ǥ
• Reduction in brokerage by many brokers for trading in dematerialized securities Ȃ”‘‡”•’”‘˜‹†‡–Š‹•
„‡‡ϐ‹––‘‹˜‡•–‘”•ƒ•†‡ƒŽ‹‰‹†‡ƒ–‡”‹ƒŽ‹œ‡†•‡ —”‹–‹‡•”‡†— ‡•–Š‡‹”„ƒ ‘ˆϐ‹ ‡ ‘•–‘ˆŠƒ†Ž‹‰’ƒ’‡”ƒ†
ƒŽ•‘‡Ž‹‹ƒ–‡•–Š‡”‹•‘ˆ„‡‹‰–Š‡‹–”‘†— ‹‰„”‘‡”Ǥ
• ‡†— –‹‘‹Šƒ†Ž‹‰‘ˆŠ—‰‡˜‘Ž—‡•‘ˆ’ƒ’‡”ƒ†’‡”‹‘†‹ •–ƒ–—•”‡’‘”–•–‘‹˜‡•–‘”•‘–Š‡‹”Š‘Ž†‹‰•ƒ†
–”ƒ•ƒ –‹‘•ǡŽ‡ƒ†‹‰–‘„‡––‡” ‘–”‘Ž•Ǥ
• Ž‹‹ƒ–‹‘‘ˆ’”‘„Ž‡•”‡Žƒ–‡†–‘ Šƒ‰‡‘ˆƒ††”‡••‘ˆ‹˜‡•–‘”ǡ–”ƒ•‹••‹‘ǡ‡– ǤȂ  ƒ•‡‘ˆ Šƒ‰‡‘ˆ
ƒ††”‡••‘”–”ƒ•‹••‹‘‘ˆ†‡ƒ–•Šƒ”‡•ǡ‹˜‡•–‘”•ƒ”‡•ƒ˜‡†ˆ”‘—†‡”‰‘‹‰–Š‡‡–‹”‡ Šƒ‰‡’”‘ ‡†—”‡
™‹–Š‡ƒ Š ‘’ƒ›‘””‡‰‹•–”ƒ”Ǥ ˜‡•–‘”•Šƒ˜‡–‘‘Ž›‹ˆ‘”–Š‡‹”™‹–ŠƒŽŽ”‡Ž‡˜ƒ–†‘ —‡–•ƒ†–Š‡
”‡“—‹”‡† Šƒ‰‡•ƒ”‡‡ˆˆ‡ –‡†‹–Š‡†ƒ–ƒ„ƒ•‡‘ˆƒŽŽ–Š‡ ‘’ƒ‹‡•ǡ™Š‡”‡–Š‡‹˜‡•–‘”‹•ƒ”‡‰‹•–‡”‡†Š‘Ž†‡”‘ˆ
•‡ —”‹–‹‡•Ǥ
• Elimination of problems related to selling securities on behalf of a minor Ȃ  ƒ–—”ƒŽ ‰—ƒ”†‹ƒ ‹• ‘–
”‡“—‹”‡†–‘–ƒ‡ ‘—”–ƒ’’”‘˜ƒŽˆ‘”•‡ŽŽ‹‰†‡ƒ–•‡ —”‹–‹‡•‘„‡ŠƒŽˆ‘ˆƒ‹‘”Ǥ
MODELS OF DEPOSITORY
Immobilisation ȂŠ‡”‡’Š›•‹ ƒŽ•Šƒ”‡ ‡”–‹ϐ‹ ƒ–‡ƒ”‡‡’–‹˜ƒ—Ž–•™‹–Š–Š‡†‡’‘•‹–‘”›ˆ‘”•ƒˆ‡ —•–‘†›ƒ†ƒŽŽ
•—„•‡“—‡– –”ƒ•ƒ –‹‘• ‹ –Š‡•‡ •‡ —”‹–‹‡• –ƒ‡ ’Žƒ ‡ ‹ „‘‘ ‡–”› ˆ‘”Ǥ Š‡ ƒ –—ƒŽ ‘™‡” Šƒ• –Š‡ ”‹‰Š– –‘
™‹–Š†”ƒ™Š‹•’Š›•‹ ƒŽ•‡ —”‹–‹‡•ƒ•ƒ†™Š‡†‡•‹”‡†ǤŠ‡‹‘„‹Ž‹œƒ–‹‘‘ˆˆ”‡•Š‹••—‡ƒ›„‡ƒ Š‹‡˜‡†„›‹••—‹‰
ƒŒ—„‘ ‡”–‹ϐ‹ ƒ–‡”‡’”‡•‡–‹‰–Š‡‡–‹”‡‹••—‡‹–Š‡ƒ‡‘ˆ†‡’‘•‹–‘”›ǡƒ•‘‹‡‡‘ˆ–Š‡„‡‡ϐ‹ ‹ƒŽ‘™‡”•Ǥ
Dematerialisation Ȃ‘Š›•‹ ƒŽ• ”‹’‹‡š‹•–‡ ‡ǡ‘Ž›‡Ž‡ –”‘‹ ”‡ ‘”†•ƒ‹–ƒ‹‡†„›†‡’‘•‹–‘”›ǤŠ‹•–›’‡‘ˆ
•›•–‡‹• ‘•–‡ˆˆ‡ –‹˜‡ƒ†•‹’Ž‡ƒ†Šƒ•„‡‡ƒ†‘’–‡†‹ †‹ƒǤ

LEGAL LINKAGE
 78 Lesson 3 • EP-SLCM

DEPOSITORY PARTICIPANT (DP)

—•–ƒ•ƒ„”‘‡”•ƒ –ƒƒ‰‡–‘ˆ–Š‡‹˜‡•–‘”ƒ––Š‡–‘ š Šƒ‰‡ǡƒ‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–ȋȌ‹•–Š‡”‡’”‡•‡–ƒ–‹˜‡
ȋƒ‰‡–Ȍ‘ˆ–Š‡‹˜‡•–‘”‹–Š‡†‡’‘•‹–‘”›•›•–‡’”‘˜‹†‹‰–Š‡Ž‹„‡–™‡‡–Š‡‘’ƒ›ƒ†‹˜‡•–‘”–Š”‘—‰Š–Š‡
‡’‘•‹–‘”›ǤŠ‡‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–ƒ‹–ƒ‹••‡ —”‹–‹‡•ǯƒ ‘—–„ƒŽƒ ‡•ƒ†‹–‹ƒ–‡•–Š‡•–ƒ–—•‘ˆŠ‘Ž†‹‰
–‘–Š‡ƒ ‘—–Š‘Ž†‡”ˆ”‘–‹‡–‘–‹‡Ǥ

Ȉ ”ƒ•‹••‹‘”‡“—‡•–•Ȁ‘‹ƒ–‹‘
Ȉ  –•ƒ•ƒ‰‡–‘ˆ‡’‘•‹–‘”›
Ȉ —•–‘‡”‹–‡”ˆƒ ‡‘ˆ‡’‘•‹–‘”›
• — –‹‘•Ž‹‡‡ —”‹–‹‡•ƒ
Ȉ Šƒ”ƒ –‡”‹•–‹ •‘ˆƒ

Characteristics Ȉ  ‘—–‘’‡‹‰
of a DP Ȉ ƒ ‹Ž‹–ƒ–‡•†‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘Ȁ”‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘
• Instant transfer on pay-out
Ȉ ƒ„Ž‡•‘ˆˆƒ”‡––”ƒ•ˆ‡”•
Ȉ ‡––Ž‡•–”ƒ†‡•‹‡Ž‡ –”‘‹ •‡‰‡–
Ȉ Ž‡†‰‡Ȁ‡ˆ‘” ‡‡–‘ˆ’Ž‡†‰‡‡– Ǥ

  ‹• ‘‡ ™‹–Š ™Š‘ ƒ ‹˜‡•–‘” ‡‡†• –‘ ‘’‡ ƒ ƒ ‘—– –‘ †‡ƒŽ ‹ •Šƒ”‡• ‹ ‡Ž‡ –”‘‹  ˆ‘”Ǥ Š‹Ž‡ –Š‡
‡’‘•‹–‘”› ƒ„‡ ‘’ƒ”‡†–‘ƒƒǡ‹•Ž‹‡ƒ„”ƒ Š‘ˆ–Šƒ–„ƒ™‹–Š™Š‹ Šƒƒ ‘—– ƒ„‡‘’‡‡†Ǥ

Question: Who can be a DP?

Answer: —„Ž‹ ϐ‹ƒ ‹ƒŽ‹•–‹–—–‹‘•ǡ• Š‡†—Ž‡† ‘‡” ‹ƒŽ„ƒ•ǡˆ‘”‡‹‰„ƒ•‘’‡”ƒ–‹‰‹ †‹ƒ™‹–Š–Š‡
ƒ’’”‘˜ƒŽ ‘ˆ –Š‡ ‡•‡”˜‡ ƒ ‘ˆ †‹ƒǡ •–ƒ–‡ ϐ‹ƒ ‹ƒŽ ‘”’‘”ƒ–‹‘•ǡ —•–‘†‹ƒ•ǡ •–‘ Ǧ„”‘‡”•ǡ Ž‡ƒ”‹‰
‘”’‘”ƒ–‹‘• Ȁ Ž‡ƒ”‹‰ Š‘—•‡•ǡ  • ƒ† ”‡‰‹•–”ƒ” –‘ ƒ ‹••—‡ ‘” •Šƒ”‡ –”ƒ•ˆ‡” ƒ‰‡– ‘’Ž›‹‰ ™‹–Š –Š‡
”‡“—‹”‡‡–•’”‡• ”‹„‡†„›  ƒ„‡”‡‰‹•–‡”‡†ƒ•Ǥ

ISSUER
Dz ••—‡”dz‡ƒ•’‡”•‘ƒ‹‰ƒ‹••—‡‘ˆ•‡ —”‹–‹‡•Ǥ›‡–‹–›•— Šƒ•ƒ ‘”’‘”ƒ–‡Ȁ•–ƒ–‡‘” ‡–”ƒŽ‰‘˜‡”‡–
‘”‰ƒ‹œƒ–‹‘•‹••—‹‰•‡ —”‹–‹‡•™Š‹ Š ƒ„‡Š‡Ž†„›†‡’‘•‹–‘”›‹‡Ž‡ –”‘‹ ˆ‘”Ǥ

Functions of Issuer ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘

‘ϐ‹”ƒ–‹‘‘ˆ‡‡ϐ‹ ‹ƒ”› ‘Ž†‹‰•
‘”’‘”ƒ–‡ –‹‘•Ȃ‹‰Š–•ǡ‘—•ǡ‡– Ǥ
‡ ‘ ‹Ž‹ƒ–‹‘‘ˆ‡’‘•‹–‘”› ‘Ž†‹‰•
‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘

DEMATERIALISATION
‡ƒ–‡”‹ƒŽ‹œƒ–‹‘‹•ƒ’”‘ ‡••„›™Š‹ Š–Š‡’Š›•‹ ƒŽ•Šƒ”‡ ‡”–‹ϐ‹ ƒ–‡•‘ˆƒ‹˜‡•–‘”ƒ”‡–ƒ‡„ƒ „›–Š‡‘’ƒ›
ƒ†ƒ‡“—‹˜ƒŽ‡–—„‡”‘ˆ•‡ —”‹–‹‡•ƒ”‡ ”‡†‹–‡†Š‹•ƒ ‘—–‹‡Ž‡ –”‘‹ ˆ‘”ƒ––Š‡”‡“—‡•–‘ˆ–Š‡‹˜‡•–‘”Ǥ
‹˜‡•–‘”™‹ŽŽŠƒ˜‡–‘ϐ‹”•–‘’‡ƒƒ ‘—–™‹–Šƒ‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–ƒ†–Š‡”‡“—‡•–ˆ‘”–Š‡†‡ƒ–‡”‹ƒŽ‹œƒ–‹‘
‘ˆŠ‹••Šƒ”‡ ‡”–‹ϐ‹ ƒ–‡•–Š”‘—‰Š–Š‡‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–•‘–Šƒ––Š‡†‡ƒ–‡”‹ƒŽ‹œ‡†Š‘Ž†‹‰• ƒ„‡ ”‡†‹–‡†‹–‘
–Šƒ–ƒ ‘—–ǤŠ‹•‹•˜‡”›•‹‹Žƒ”–‘‘’‡‹‰ƒƒ ‘—–Ǥ
‡ƒ–‡”‹ƒŽ‹œƒ–‹‘‘ˆ•Šƒ”‡•‹•‘’–‹‘ƒŽƒ†ƒ‹˜‡•–‘” ƒ•–‹ŽŽŠ‘Ž†•Šƒ”‡•‹’Š›•‹ ƒŽˆ‘”Ǥ ‘™‡˜‡”ǡŠ‡Ȁ•Š‡Šƒ•
–‘†‡ƒ––Š‡•Šƒ”‡•‹ˆŠ‡Ȁ•Š‡™‹•Š‡•–‘•‡ŽŽ–Š‡•ƒ‡–Š”‘—‰Š–Š‡–‘ š Šƒ‰‡•ǡƒ•’Š›•‹ ƒŽ•Šƒ”‡•ƒ”‡–‘„‡•‘Ž†
–Š”‘—‰Šƒ•‡’ƒ”ƒ–‡•‡••‹‘ƒ†ƒ”‡•‘Ž†ƒ–ƒ„‹‰†‹• ‘—––‘–Š‡ƒ”‡–’”‹ ‡•Ǥ‹‹Žƒ”Ž›ǡ‹ˆƒ‹˜‡•–‘”’—” Šƒ•‡•
 Lesson 3 • Depositories Act, 1996 79

•Šƒ”‡•ˆ”‘–Š‡–‘ š Šƒ‰‡ǡŠ‡Ȁ•Š‡™‹ŽŽ‰‡–†‡Ž‹˜‡”›‘ˆ–Š‡•Šƒ”‡•‹†‡ƒ–ˆ‘”Ǥ††Ž‘–•Šƒ”‡ ‡”–‹ϐ‹ ƒ–‡• ƒ

ƒŽ•‘„‡†‡ƒ–‡”‹ƒŽ‹œ‡†Ǥ‹‹Žƒ”Ž›ǡ‹—„Ž‹  ••—‡•Ȁ‹‰Š– ••—‡•ǡ•Šƒ”‡•ƒ”‡‹••—‡†‘Ž›‹†‡ƒ–ˆ‘”Ǥ
 PROCEDURE FOR DEMATERIALISATION 

Question:ƒƒ‹˜‡•–‘”ǡƒŽ”‡ƒ†›Šƒ˜‹‰ƒ†‡ƒ–ƒ ‘—–Ǣ‘’‡ƒ‘–Š‡”ƒ ‘—–™‹–Šƒ›‘–Š‡”‡’‘•‹–‘”›

Participant (DP)?
Answer:‡•ǡ–Š‡‹˜‡•–‘”Šƒ•ƒ Š‘‹ ‡–‘‘’‡ƒ‘–Š‡”†‡ƒ–ƒ ‘—–™‹–Šƒ›Ǥ

REMATERIALISATION
‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘‹•–Š‡’”‘ ‡••‘ˆ ‘˜‡”–‹‰•‡ —”‹–‹‡•Š‡Ž†‹‡Ž‡ –”‘‹ ˆ‘”‹ƒ†‡ƒ–ƒ ‘—–„ƒ ‹’Š›•‹ ƒŽ
‡”–‹ϐ‹ ƒ–‡ˆ‘”Ǥ ‘”–Š‡’—”’‘•‡‘ˆ”‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘ǡ–Š‡ Ž‹‡–Šƒ•–‘•—„‹––Š‡”‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘”‡“—‡•––‘–Š‡
™‹–Š™Š‘Š‡Šƒ•ƒƒ ‘—–Ǥ Ž‹‡– ƒ”‡ƒ–‡”‹ƒŽ‹•‡Š‹•†‡ƒ–‡”‹ƒŽ‹•‡†Š‘Ž†‹‰•ƒ–ƒ›’‘‹–‘ˆ–‹‡ǤŠ‡
•‡ —”‹–‹‡••‡–ˆ‘””‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘ ƒ‘–„‡–”ƒ†‡†Ǥ
 80 Lesson 3 • EP-SLCM

ELECTRONIC CREDIT IN NEW ISSUES

• ˜‡•–‘”‘’‡•ƒ ‘—–™‹–Š
Ȉ —„‹–•ƒ’’Ž‹ ƒ–‹‘™‹–Š‘’–‹‘–‘Š‘Ž†•‡ —”‹–‹‡•‹†‡’‘•‹–‘”›‰‹˜‹‰Ǧ †ƒ†Ž‹‡–Ǧ †
Ȉ ‡‰‹•–”ƒ”—’Ž‘ƒ†•Ž‹•–‘ˆƒŽŽ‘––‡‡•–‘‡’‘•‹–‘”›
Ȉ ‡’‘•‹–‘”› ”‡†‹–•ƒŽŽ‘––‡‡ǯ•ƒ ‘—–™‹–Š
Ȉ ‡ˆ—†••‡–„›‡‰‹•–”ƒ”ƒ•—•—ƒŽǤ

TRADING SYSTEM
Ȉ ‡’ƒ”ƒ–‡“—‘–‡•‹‘‘–”›
Ȉ ”ƒ†‹‰‡„‡”–‘Šƒ˜‡Ž‡ƒ”‹‰ ‘—–™‹–Š
Ȉ ‡––Ž‡‡–ƒ•’‡”‡––Ž‡‡–ƒŽ‡†ƒ”‘ˆ–‘ š Šƒ‰‡
Ȉ ”ƒ†‹‰ ƒ„‡‹–”‘†— ‡†‹ƒ›–‘ ‡š Šƒ‰‡‹ˆ•‡––Ž‡‡–‹•‰—ƒ”ƒ–‡‡†Ǥ

CORPORATE ACTIONS
Ȉ ‹˜‹†‡†•Ȁ ƒ•Š„‡‡ϐ‹–•ǡ–Š‡•‡„‡‡ϐ‹–•ƒ”‡†‹”‡ –Ž›ˆ‘”™ƒ”†‡†–‘–Š‡‹˜‡•–‘”•„›–Š‡ ‘’ƒ›‘”‹–•”‡‰‹•–”ƒ”
ƒ†–”ƒ•ˆ‡”ƒ‰‡–Ǥ
Ȉ ‘Ǧ ƒ•Š „‡‡ϐ‹–•ǡ ˜‹œǤ ‘—•ǡ ‹‰Š–• ••—‡ǡ ‡– Ǥ –Š‡•‡ „‡‡ϐ‹–• ƒ”‡ ‡Ž‡ –”‘‹ ƒŽŽ› ”‡†‹–‡† –‘ –Š‡ „‡‡ϐ‹ ‹ƒŽ
‘™‡”ǯ•ƒ ‘—––Š”‘—‰Š‡’‘•‹–‘”›Ǥ

—‡•–‹‘ǣ ‘™™‘—Ž†”Ǥ‰‡–‘—•Šƒ”‡•‹ˆŠ‡Š‘Ž†••Šƒ”‡•‹‡ƒ– ‘”ǫ

Answer:Š‡ ‘ ‡”‡† ‘’ƒ›‘„–ƒ‹•–Š‡†‡–ƒ‹Ž•‘ˆ„‡‡ϐ‹ ‹ƒ”›Š‘Ž†‡”•ƒ†–Š‡‹”Š‘Ž†‹‰•ˆ”‘‡’‘•‹–‘”›
ȋ‘”Ȍƒ•‘–Š‡”‡ ‘”††ƒ–‡ǤŠ‡—„‡”‘ˆ•Šƒ”‡•Š‡‹•‡–‹–Ž‡†ˆ‘”ǡƒ”‡ ”‡†‹–‡†–‘Š‹•†‡ƒ–ƒ ‘—–
„›–Š‡ ‘’ƒ›Ȁ‹–•Ǥ

DEPOSITORIES ACT, 1996

Regulatory Framework
Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸‹•†‹˜‹†‡†‹–‘ϐ‹˜‡ Šƒ’–‡”•™Š‹ Šƒ”‡†‹• —••‡†„‡Ž‘™ƒ•—†‡”ǣ

Depositories Act, 1996 Chapter I ‡ϐ‹‹–‹‘•‘ˆ˜ƒ”‹‘—•–‡”•

Chapter II ‡”–‹ϐ‹ ƒ–‡‘ˆ‘‡ ‡‡–‘ˆ—•‹‡••
Chapter III ‹‰Š–• ƒ† „Ž‹‰ƒ–‹‘• ‘ˆ ‡’‘•‹–‘”‹‡•ǡ ƒ”–‹ ‹’ƒ–•ǡ ••—‡”•
ƒ†‡‡ϐ‹ ‹ƒŽ™‡”•
Chapter IV “—‹”›ƒ† •’‡ –‹‘
Chapter V ‹• ‡ŽŽƒ‡‘—•

Objectives
Š‡†‡’‘•‹–‘”‹‡•ǯŽ‡‰‹•Žƒ–‹‘ƒ•’‡”–Š‡–ƒ–‡‡–‘ˆ„Œ‡ –•ƒ†‡ƒ•‘•ƒ’’‡†‡†–‘–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸
ƒ‹•ƒ–’”‘˜‹†‹‰ǣ
Ȉ Ž‡‰ƒŽ„ƒ•‹•ˆ‘”‡•–ƒ„Ž‹•Š‡–‘ˆ†‡’‘•‹–‘”‹‡•–‘ ‘†— ––Š‡–ƒ•‘ˆƒ‹–‡ƒ ‡‘ˆ‘™‡”•Š‹’”‡ ‘”†•ƒ†
‡ˆˆ‡ –‹‰ Šƒ‰‡•‹‘™‡”•Š‹’”‡ ‘”†•–Š”‘—‰Š„‘‘‡–”›Ǣ
Ȉ ‡ƒ–‡”‹Ž‹•ƒ–‹‘‘ˆ•‡ —”‹–‹‡•‹–Š‡†‡’‘•‹–‘”‹‡•‘†‡ƒ•™‡ŽŽƒ•‰‹˜‹‰‘’–‹‘–‘ƒ‹˜‡•–‘”–‘ Š‘‘•‡„‡–™‡‡
Š‘Ž†‹‰•‡ —”‹–‹‡•‹’Š›•‹ ƒŽ‘†‡ƒ†Š‘Ž†‹‰•‡ —”‹–‹‡•‹ƒ†‡ƒ–‡”‹ƒŽ‹œ‡†ˆ‘”‹ƒ†‡’‘•‹–‘”›Ǣ
 Lesson 3 • Depositories Act, 1996 81

Ȉ ƒ‹‰–Š‡•‡ —”‹–‹‡•ˆ—‰‹„Ž‡Ǣ
Ȉ ƒ‹‰–Š‡•Šƒ”‡•ǡ†‡„‡–—”‡•ƒ†ƒ›‹–‡”‡•––Š‡”‡‘‘ˆƒ’—„Ž‹ Ž‹‹–‡† ‘’ƒ›ˆ”‡‡Ž›–”ƒ•ˆ‡”ƒ„Ž‡Ǣƒ†
Ȉ š‡’–‹‰ƒŽŽ–”ƒ•ˆ‡”•‘ˆ•Šƒ”‡•™‹–Š‹ƒ†‡’‘•‹–‘”›ˆ”‘•–ƒ’†—–›Ǥ

‡”–‹ϐ‹ ƒ–‡‘ˆ‘‡ ‡‡–‘ˆ—•‹‡••„›‡’‘•‹–‘”‹‡•

Sectio͵‘ˆ–Š‡‡’‘•‹–‘”› –ǡ•–‹’—Žƒ–‡•–Šƒ–‘†‡’‘•‹–‘”›•ŠƒŽŽƒ –ƒ•ƒ†‡’‘•‹–‘”›—Ž‡••‹–‘„–ƒ‹•ƒ ‡”–‹ϐ‹ ƒ–‡
‘ˆ ‘‡ ‡‡– ‘ˆ „—•‹‡•• ˆ”‘ –Š‡   ‹ •— Š ˆ‘” ƒ• ƒ› „‡ •’‡ ‹ϐ‹‡† „› –Š‡   ȋ‡’‘•‹–‘”‹‡• ƒ†
ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺǤ
Š‡ •ŠƒŽŽ‘–‰”ƒ–ƒ ‡”–‹ϐ‹ ƒ–‡—Ž‡••‹–‹••ƒ–‹•ϐ‹‡†–Šƒ––Š‡†‡’‘•‹–‘”›Šƒ•ƒ†‡“—ƒ–‡•›•–‡•ƒ†•ƒˆ‡‰—ƒ”†•
–‘’”‡˜‡–ƒ‹’—Žƒ–‹‘‘ˆ”‡ ‘”†•ƒ†–”ƒ•ƒ –‹‘•Ǥ
‘™‡˜‡”‘ ‡”–‹ϐ‹ ƒ–‡•ŠƒŽŽ„‡”‡ˆ—•‡†—Ž‡••–Š‡†‡’‘•‹–‘”› ‘ ‡”‡†Šƒ•„‡‡‰‹˜‡ƒ”‡ƒ•‘ƒ„Ž‡‘’’‘”–—‹–›
‘ˆ„‡‹‰Š‡ƒ”†Ǥ
Eligibility Condition for Depository Services
› ‘’ƒ›‘”‘–Š‡”‹•–‹–—–‹‘–‘„‡‡Ž‹‰‹„Ž‡–‘’”‘˜‹†‡†‡’‘•‹–‘”›•‡”˜‹ ‡•—•–ǣ
Ȉ Šƒ•ƒ‡–™‘”–Š‘ˆ‘–Ž‡••–Šƒ”—’‡‡•‘‡Š—†”‡† ”‘”‡•Ǥ
Ȉ „‡ˆ‘”‡†ƒ†”‡‰‹•–‡”‡†ƒ•ƒ ‘’ƒ›—†‡”–Š‡‘’ƒ‹‡• –ǡʹͲͳ͵Ǥ
Ȉ „‡”‡‰‹•–‡”‡†™‹–Š ƒ•ƒ†‡’‘•‹–‘”›—†‡”  –ǡͳͻͻʹǤ
Ȉ Šƒ•ˆ”ƒ‡†„›‡ǦŽƒ™•™‹–Š–Š‡’”‡˜‹‘—•ƒ’’”‘˜ƒŽ‘ˆ Ǥ
Ȉ Šƒ•‘‡‘”‘”‡’ƒ”–‹ ‹’ƒ–•–‘”‡†‡”†‡’‘•‹–‘”›•‡”˜‹ ‡•‘‹–•„‡ŠƒŽˆǤ
Ȉ Šƒ•ƒ†‡“—ƒ–‡•›•–‡•ƒ†•ƒˆ‡‰—ƒ”†•–‘’”‡˜‡–ƒ‹’—Žƒ–‹‘‘ˆ”‡ ‘”†•ƒ†–”ƒ•ƒ –‹‘•–‘–Š‡•ƒ–‹•ˆƒ –‹‘
‘ˆ Ǥ
Ȉ ‘’Ž‹‡•™‹–Š‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸ƒ† ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺǤ
Ȉ ‡‡–•‡Ž‹‰‹„‹Ž‹–› ”‹–‡”‹ƒ‹–‡”•‘ˆ ‘•–‹–—–‹‘ǡ‡–™‘”ǡ‡– Ǥ

›’‡”•‘ǡ–Š”‘—‰Šƒ’ƒ”–‹ ‹’ƒ–ǡƒ›‡–‡”‹–‘ƒƒ‰”‡‡‡–ǡ‹•— Šˆ‘”ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„›–Š‡„›‡ǦŽƒ™•ǡ

™‹–Šƒ›†‡’‘•‹–‘”›ˆ‘”ƒ˜ƒ‹Ž‹‰‹–••‡”˜‹ ‡•Ǥ

‹‰Š–•ƒ†„Ž‹‰ƒ–‹‘•‘ˆ‡’‘•‹–‘”‹‡•ǡƒ”–‹ ‹’ƒ–•ǡ ••—‡”•ƒ†‡‡ϐ‹ ‹ƒŽ™‡”•

Agreement between depository and participant
 †‡’‘•‹–‘”› •ŠƒŽŽ ‡–‡” ‹–‘ ƒ ƒ‰”‡‡‡– ™‹–Š ‘‡ ‘” ‘”‡ ’ƒ”–‹ ‹’ƒ–• ƒ• ‹–• ƒ‰‡– ‹ •— Š ˆ‘” ƒ• ƒ› „‡
•’‡ ‹ϐ‹‡†„›–Š‡„›‡ǦŽƒ™•Ǥ
Services of depository
›’‡”•‘ǡ–Š”‘—‰Šƒ’ƒ”–‹ ‹’ƒ–ǡƒ›‡–‡”‹–‘ƒƒ‰”‡‡‡–ǡ‹•— Šˆ‘”ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„›–Š‡„›‡ǦŽƒ™•ǡ
™‹–Šƒ›†‡’‘•‹–‘”›ˆ‘”ƒ˜ƒ‹Ž‹‰‹–••‡”˜‹ ‡•Ǥ
—””‡†‡”‘ˆ ‡”–‹ϐ‹ ƒ–‡‘ˆ•‡ —”‹–›
›’‡”•‘™Š‘Šƒ•‡–‡”‡†‹–‘ƒƒ‰”‡‡‡––Š”‘—‰Šƒ’ƒ”–‹ ‹’ƒ–•ŠƒŽŽ•—””‡†‡”–Š‡ ‡”–‹ϐ‹ ƒ–‡‘ˆ•‡ —”‹–›ǡˆ‘”™Š‹ Š
Š‡•‡‡•–‘ƒ˜ƒ‹Ž–Š‡•‡”˜‹ ‡•‘ˆƒ†‡’‘•‹–‘”›ǡ–‘–Š‡‹••—‡”‹•— Šƒ‡”ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„›–Š‡”‡‰—Žƒ–‹‘•Ǥ
Š‡‹••—‡”ǡ‘”‡ ‡‹’–‘ˆ ‡”–‹ˆ‹ ƒ–‡‘ˆ•‡ —”‹–›ǡ•ŠƒŽŽ ƒ ‡Ž–Š‡ ‡”–‹ˆ‹ ƒ–‡‘ˆ•‡ —”‹–›ƒ†•—„•–‹–—–‡‹‹–•”‡ ‘”†•
–Š‡ ƒ‡ ‘ˆ –Š‡ †‡’‘•‹–‘”› ƒ• ƒ ”‡‰‹•–‡”‡† ‘™‡” ‹ ”‡•’‡ – ‘ˆ –Šƒ– •‡ —”‹–› ƒ† ‹ˆ‘” –Š‡ †‡’‘•‹–‘”›
ƒ ‘”†‹‰Ž›Ǥ
†‡’‘•‹–‘”›•ŠƒŽŽǡ‘”‡ ‡‹’–‘ˆ–Š‡‹ˆ‘”ƒ–‹‘ˆ”‘‹••—‡”ǡ‡–‡”–Š‡ƒ‡‘ˆ–Š‡’‡”•‘‹‹–•”‡ ‘”†•ǡƒ•–Š‡
„‡‡ϐ‹ ‹ƒŽ‘™‡”Ǥ͵
 82 Lesson 3 • EP-SLCM

Registration of transfer of securities with depository

˜‡”›†‡’‘•‹–‘”›•ŠƒŽŽǡ‘”‡ ‡‹’–‘ˆ‹–‹ƒ–‹‘ˆ”‘ƒ’ƒ”–‹ ‹’ƒ–ǡ”‡‰‹•–‡”–Š‡–”ƒ•ˆ‡”‘ˆ•‡ —”‹–›‹–Š‡ƒ‡‘ˆ
–Š‡ –”ƒ•ˆ‡”‡‡Ǥ ˆ ƒ „‡‡ϐ‹ ‹ƒŽ ‘™‡” ‘” ƒ –”ƒ•ˆ‡”‡‡ ‘ˆ ƒ› •‡ —”‹–› •‡‡• –‘ Šƒ˜‡ —•–‘†› ‘ˆ •— Š •‡ —”‹–› –Š‡
†‡’‘•‹–‘”›•ŠƒŽŽ‹ˆ‘”–Š‡‹••—‡”ƒ ‘”†‹‰Ž›Ǥ

’–‹‘•–‘”‡ ‡‹˜‡•‡ —”‹–› ‡”–‹ϐ‹ ƒ–‡‘”Š‘Ž†•‡ —”‹–‹‡•™‹–Š†‡’‘•‹–‘”›

‡ –‹‘ͺ•–ƒ–‡•–Šƒ–Ȃ
ȋͳȌ ˜‡”›’‡”•‘•—„• ”‹„‹‰–‘•‡ —”‹–‹‡•‘ˆˆ‡”‡†„›ƒ‹••—‡”•ŠƒŽŽŠƒ˜‡–Š‡‘’–‹‘‡‹–Š‡”–‘”‡ ‡‹˜‡–Š‡•‡ —”‹–›
‡”–‹ϐ‹ ƒ–‡•‘”Š‘Ž†•‡ —”‹–‹‡•™‹–Šƒ†‡’‘•‹–‘”›Ǥ
ȋʹȌ Š‡”‡ƒ’‡”•‘‘’–•–‘Š‘Ž†ƒ•‡ —”‹–›™‹–Šƒ†‡’‘•‹–‘”›ǡ–Š‡‹••—‡”•ŠƒŽŽ‹–‹ƒ–‡•— Š†‡’‘•‹–‘”›–Š‡†‡–ƒ‹Ž•
‘ˆƒŽŽ‘–‡–‘ˆ–Š‡•‡ —”‹–›ǡƒ†‘”‡ ‡‹’–‘ˆ•— Š‹ˆ‘”ƒ–‹‘–Š‡†‡’‘•‹–‘”›•ŠƒŽŽ‡–‡”‹‹–•”‡ ‘”†•–Š‡
ƒ‡‘ˆ–Š‡ƒŽŽ‘––‡‡ƒ•–Š‡„‡‡ϐ‹ ‹ƒŽ‘™‡”‘ˆ–Šƒ–•‡ —”‹–›Ǥ
However, Section 29 of the Companies Act, 2013 read with the Companies (Prospectus and
Allotment of Securities) Rules, 2014, provides that –
Ȉ ‡˜‡”› ‘’ƒ›ƒ‹‰’—„Ž‹ ‘ˆˆ‡”ƒ†•— Š‘–Š‡” Žƒ••‘” Žƒ••‡•‘ˆ ‘’ƒ‹‡•ƒ•ƒ›„‡’”‡• ”‹„‡†ǡ•ŠƒŽŽ
‹••—‡–Š‡•‡ —”‹–‹‡•‘Ž›‹†‡ƒ–‡”‹ƒŽ‹•‡†ˆ‘”„› ‘’Ž›‹‰™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ–Š‡‡’‘•‹–‘”‹‡• –ǡ
ͳͻͻ͸ƒ†–Š‡”‡‰—Žƒ–‹‘•ƒ†‡–Š‡”‡—†‡”Ǥ
Ȉ —”–Š‡”ǡ‹ ƒ•‡‘ˆ•— Š Žƒ••‘” Žƒ••‡•‘ˆ—Ž‹•–‡† ‘’ƒ‹‡•ƒ•ƒ›„‡’”‡• ”‹„‡†ǡ–Š‡•‡ —”‹–‹‡••ŠƒŽŽ„‡
Š‡Ž†‘”–”ƒ•ˆ‡””‡†‘Ž›‹†‡ƒ–‡”‹ƒŽ‹•‡†ˆ‘”‹–Š‡ƒ‡”Žƒ‹††‘™‹–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸ƒ†
–Š‡”‡‰—Žƒ–‹‘•ƒ†‡–Š‡”‡—†‡”Ǥ
Ȉ › ‘’ƒ›ǡ‘–Š‡”–Šƒƒ ‘’ƒ›‡–‹‘‡†ƒ„‘˜‡ǡƒ› ‘˜‡”–‹–••‡ —”‹–‹‡•‹–‘†‡ƒ–‡”‹ƒŽ‹•‡†ˆ‘”‘”
‹••—‡‹–••‡ —”‹–‹‡•‹’Š›•‹ ƒŽˆ‘”‹ƒ ‘”†ƒ ‡™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ–Š‹• –‘”‹†‡ƒ–‡”‹ƒŽ‹•‡†ˆ‘”‹
ƒ ‘”†ƒ ‡™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸ƒ†–Š‡”‡‰—Žƒ–‹‘•ƒ†‡–Š‡”‡—†‡”Ǥ

–‹•‘–‡ ‡••ƒ”›–Šƒ–ƒŽŽ‡Ž‹‰‹„Ž‡•‡ —”‹–‹‡•—•–„‡‹–Š‡†‡’‘•‹–‘”›‘†‡Ǥ –Š‡• Š‡‡‘ˆ–Š‡‡’‘•‹–‘”‹‡•

Ž‡‰‹•Žƒ–‹‘ǡ–Š‡‹˜‡•–‘”Šƒ•„‡‡‰‹˜‡•—’”‡ƒ ›ǤŠ‡‹˜‡•–‘”Šƒ•–Š‡ Š‘‹ ‡‘ˆŠ‘Ž†‹‰’Š›•‹ ƒŽ•‡ —”‹–‹‡•‘”‘’–•
ˆ‘”ƒ†‡’‘•‹–‘”›„ƒ•‡†‘™‡”•Š‹’”‡ ‘”†Ǥ
‘™‡˜‡”ǡ‹ ƒ•‡‘ˆˆ”‡•Š‹••—‡‘ˆ•‡ —”‹–‹‡•ƒŽŽ•‡ —”‹–‹‡•‹••—‡†Šƒ˜‡–‘„‡‹†‡ƒ–‡”‹ƒŽ‹œ‡†ˆ‘”Ǥ ‘™‡˜‡”ǡ after
–Šƒ– ‹˜‡•–‘” ™‹ŽŽ ƒŽ•‘ Šƒ˜‡ –Š‡ ˆ”‡‡†‘ –‘ •™‹– Š ˆ”‘ †‡’‘•‹–‘”› ‘†‡ –‘ ’Š›•‹ ƒŽ ‘†‡ ƒ† vice versaǤ The
†‡ ‹•‹‘ ƒ• –‘ ™Š‡–Š‡” ‘” ‘– –‘ Š‘Ž† •‡ —”‹–‹‡• ™‹–Š‹ –Š‡ †‡’‘•‹–‘”› ‘†‡ ƒ† ‹ˆ ‹ †‡’‘•‹–‘”› ‘†‡ǡ ™Š‹ Š
†‡’‘•‹–‘”›‘”’ƒ”–‹ ‹’ƒ–ǡ™‘—Ž†„‡‡–‹”‡Ž›™‹–Š–Š‡‹˜‡•–‘”Ǥ

Question: What type of instruments are available for demat at Depository?

Answer: ŽŽ–›’‡•‘ˆ‡“—‹–›Ȁ†‡„–‹•–”—‡–•˜‹œǤ‡“—‹–›•Šƒ”‡•ǡ’”‡ˆ‡”‡ ‡Šƒ”‡•ǡ’ƒ”–Ž›’ƒ‹†•Šƒ”‡•ǡ„‘†•ǡ
†‡„‡–—”‡•ǡ ‘‡” ‹ƒŽ ’ƒ’‡”•ǡ ‡”–‹ϐ‹ ƒ–‡• ‘ˆ †‡’‘•‹–ǡ ‰‘˜‡”‡– •‡ —”‹–‹‡• ȋ ǦȌ ‡– Ǥ ‹””‡•’‡ –‹˜‡ ‘ˆ
™Š‡–Š‡”–Š‡•‡‹•–”—‡–•ƒ”‡Ž‹•–‡†Ȁ—Ž‹•–‡†Ȁ’”‹˜ƒ–‡Ž›’Žƒ ‡† ƒ„‡†‡ƒ–‡”‹ƒŽ‹œ‡†™‹–Š†‡’‘•‹–‘”›ǡ‹ˆ–Š‡›
Šƒ˜‡„‡‡ƒ†‹––‡†™‹–Š–Š‡†‡’‘•‹–‘”›Ǥ

Restriction on Transfer of Securities

  Šƒ• ƒ‡†‡† ”‡Ž‡˜ƒ– ’”‘˜‹•‹‘• ‘ˆ   ȋ‹•–‹‰ „Ž‹‰ƒ–‹‘• ƒ† ‹• Ž‘•—”‡ ‡“—‹”‡‡–•Ȍ ‡‰—Žƒ–‹‘•ǡ
ʹͲͳͷ–‘†‹•ƒŽŽ‘™Ž‹•–‡† ‘’ƒ‹‡•ˆ”‘ƒ ‡’–‹‰”‡“—‡•–ˆ‘”–”ƒ•ˆ‡”‘ˆ•‡ —”‹–‹‡•™Š‹ Šƒ”‡Š‡Ž†‹’Š›•‹ ƒŽˆ‘”Ǥ
Š‡•Šƒ”‡Š‘Ž†‡”•™Š‘ ‘–‹—‡–‘Š‘Ž†•Šƒ”‡•ƒ†‘–Š‡”–›’‡•‘ˆ•‡ —”‹–‹‡•‘ˆŽ‹•–‡† ‘’ƒ‹‡•‹’Š›•‹ ƒŽˆ‘”
‡˜‡ƒˆ–‡”–Š‹•†ƒ–‡ǡ™‹ŽŽ‘–„‡ƒ„Ž‡–‘Ž‘†‰‡–Š‡•Šƒ”‡•™‹–Š ‘’ƒ›Ȁ ‹–•ˆ‘”ˆ—”–Š‡”–”ƒ•ˆ‡”ǤŠ‡›™‹ŽŽ‡‡†
–‘ ‘˜‡”––Š‡–‘†‡ƒ–ˆ‘” ‘’—Ž•‘”‹Ž›‹ˆ–Š‡›™‹•Š–‘‡ˆˆ‡ –ƒ›–”ƒ•ˆ‡”ǤŽ›–Š‡”‡“—‡•–•ˆ‘”–”ƒ•‹••‹‘
ƒ†–”ƒ•’‘•‹–‹‘‘ˆ•‡ —”‹–‹‡•‹’Š›•‹ ƒŽˆ‘”ǡ™‹ŽŽ„‡ƒ ‡’–‡†„›–Š‡Ž‹•–‡† ‘’ƒ‹‡•Ȁ–Š‡‹”•Ǥ
Š‹•ƒ‡†‡–™‹ŽŽŠ‡Ž’‹ —”„‹‰ˆ”ƒ—†ƒ†ƒ‹’—Žƒ–‹‘”‹•‹’Š›•‹ ƒŽ–”ƒ•ˆ‡”‘ˆ•‡ —”‹–‹‡•„›—• ”—’—Ž‘—•
’‡”•‘•Ǥ —”–Š‡”ǡ™‹–Š•Šƒ”‡•Š‡Ž†‹†‡ƒ–ˆ‘”™‹ŽŽ‹’”‘˜‡‡ƒ•‡ǡ ‘˜‡‹‡ ‡ƒ†•ƒˆ‡–›‘ˆ–”ƒ•ƒ –‹‘•ˆ‘” ‹˜‡•–‘”•Ǥ
 Lesson 3 • Depositories Act, 1996 83

Requirements with the promoters and promoter group shareholding

•’‡” ȋ‹•–‹‰„Ž‹‰ƒ–‹‘•ƒ†‹• Ž‘•—”‡‡“—‹”‡‡–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͷǡ–Š‡Ž‹•–‡†‡–‹–›•ŠƒŽŽ‡•—”‡–Šƒ–
hundred percent ‘ˆ •Šƒ”‡Š‘Ž†‹‰ ‘ˆ ’”‘‘–‡” ƒ† ’”‘‘–‡” ‰”‘—’ ‹• ‹ †‡ƒ–‡”‹ƒŽ‹œ‡† ˆ‘” ƒ† –Š‡ •ƒ‡ ‹•
ƒ‹–ƒ‹‡†‘ƒ ‘–‹—‘—•„ƒ•‹•‹–Š‡ƒ‡”ƒ••’‡ ‹ϐ‹‡†„›–Š‡ Ǥ

Fungibility
‡ –‹‘ͻ•–ƒ–‡•–Šƒ–•‡ —”‹–‹‡•‹†‡’‘•‹–‘”‹‡••ŠƒŽŽ„‡‹ˆ—‰‹„Ž‡ˆ‘”Ǥ
Š‡ –‡˜‹•ƒ‰‡•–Šƒ–ƒŽŽ•‡ —”‹–‹‡•Š‡Ž†‹†‡’‘•‹–‘”›•ŠƒŽŽ„‡ˆ—‰‹„Ž‡‹Ǥ‡ǤƒŽŽ ‡”–‹ϐ‹ ƒ–‡•‘ˆ–Š‡•ƒ‡•‡ —”‹–›•ŠƒŽŽ
„‡ ‘‡‹–‡” Šƒ‰‡ƒ„Ž‡‹–Š‡•‡•‡–Šƒ–‹˜‡•–‘”Ž‘•‡•–Š‡”‹‰Š––‘‘„–ƒ‹–Š‡‡šƒ – ‡”–‹ϐ‹ ƒ–‡Š‡•—””‡†‡”•ƒ––Š‡
–‹‡‘ˆ‡–”›‹–‘†‡’‘•‹–‘”›Ǥ –‹•Ž‹‡™‹–Š†”ƒ™‹‰‘‡›ˆ”‘–Š‡„ƒ™‹–Š‘—–„‘–Š‡”‹‰ƒ„‘—––Š‡†‹•–‹ –‹˜‡
—„‡”•‘ˆ–Š‡ —””‡ ‹‡•Ǥ

‹‰Š–•‘ˆ‡’‘•‹–‘”‹‡•ƒ†‡‡ϐ‹ ‹ƒŽ™‡”
‡ –‹‘ͳͲŽƒ›•†‘™–Šƒ–ƒ†‡’‘•‹–‘”›•Š‘—Ž†„‡†‡‡‡†–‘„‡–Š‡”‡‰‹•–‡”‡†‘™‡”ˆ‘”–Š‡’—”’‘•‡•‘ˆ‡ˆˆ‡ –‹‰
–”ƒ•ˆ‡”‘ˆ‘™‡”•Š‹’‘ˆ•‡ —”‹–›‘„‡ŠƒŽˆ‘ˆƒ„‡‡ϐ‹ ‹ƒŽ‘™‡”ǤŠ‡†‡’‘•‹–‘”›ƒ•ƒ”‡‰‹•–‡”‡†‘™‡”•Š‘—Ž†‘–
Šƒ˜‡ƒ›˜‘–‹‰”‹‰Š–•‘”ƒ›‘–Š‡””‹‰Š–•‹”‡•’‡ –‘ˆ•‡ —”‹–‹‡•Š‡Ž†„›‹–ǤŠ‡„‡‡ϐ‹ ‹ƒŽ‘™‡”‹•‡–‹–Ž‡†–‘ƒŽŽ
–Š‡”‹‰Š–•ƒ†„‡‡ϐ‹–•ƒ†‹••—„Œ‡ ––‘ƒŽŽ–Š‡Ž‹ƒ„‹Ž‹–‹‡•‹”‡•’‡ –‘ˆŠ‹••‡ —”‹–‹‡•Š‡Ž†„›ƒ†‡’‘•‹–‘”›Ǥ

‡‰‹•–‡”‘ˆ‡‡ϐ‹ ‹ƒŽ™‡”
‡ –‹‘ͳͳ’”‘˜‹†‡•–Šƒ–‡˜‡”›†‡’‘•‹–‘”›‹•”‡“—‹”‡†–‘ƒ‹–ƒ‹ƒ”‡‰‹•–‡”ƒ†ƒ‹†‡š‘ˆ„‡‡ϐ‹ ‹ƒŽ‘™‡”•‹–Š‡
ƒ‡”’”‘˜‹†‡†‹–Š‡‘’ƒ‹‡• –ǡʹͲͳ͵Ǥ
Pledge or Hypothecation of Securities held in a Depository
‡ –‹‘ͳʹŽƒ›•†‘™–Šƒ–ƒ„‡‡ϐ‹ ‹ƒŽ‘™‡”ƒ›™‹–Š–Š‡’”‡˜‹‘—•ƒ’’”‘˜ƒŽ‘ˆ–Š‡†‡’‘•‹–‘”› ”‡ƒ–‡ƒ’Ž‡†‰‡‘”
Š›’‘–Š‡ ƒ–‹‘ ‹ ”‡•’‡ – ‘ˆ ƒ •‡ —”‹–› ‘™‡† „› Š‹ –Š”‘—‰Š ƒ †‡’‘•‹–‘”›Ǥ ˜‡”› „‡‡ϐ‹ ‹ƒŽ ‘™‡” •Š‘—Ž† ‰‹˜‡
‹–‹ƒ–‹‘‘ˆ•— Š’Ž‡†‰‡‘”Š›’‘–Š‡ ƒ–‹‘–‘–Š‡†‡’‘•‹–‘”›ƒ†•— Š†‡’‘•‹–‘”›‹•”‡“—‹”‡†–‘ƒ‡‡–”‹‡•‹‹–•
”‡ ‘”†•ƒ ‘”†‹‰Ž›Ǥ›‡–”›‹–Š‡”‡ ‘”†•‘ˆƒ†‡’‘•‹–‘”›•Š‘—Ž†„‡‡˜‹†‡ ‡‘ˆƒ’Ž‡†‰‡‘”Š›’‘–Š‡ ƒ–‹‘Ǥ
Furnishing of Information and Records by Depository and Issuer
‡ –‹‘ͳ͵•–‹’—Žƒ–‡•–Šƒ–†‡’‘•‹–‘”›•ŠƒŽŽˆ—”‹•Š–‘–Š‡‹••—‡”‹ˆ‘”ƒ–‹‘ƒ„‘—––Š‡–”ƒ•ˆ‡”‘ˆ•‡ —”‹–‹‡•‹–Š‡
ƒ‡‘ˆ„‡‡ϐ‹ ‹ƒŽ‘™‡”•ƒ–•— Š‹–‡”˜ƒŽ•ƒ†‹•— Šƒ‡”ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„›–Š‡„›‡ǦŽƒ™•Ǥ˜‡”›‹••—‡”
•ŠƒŽŽƒ‡ƒ˜ƒ‹Žƒ„Ž‡–‘–Š‡†‡’‘•‹–‘”› ‘’‹‡•‘ˆ–Š‡”‡Ž‡˜ƒ–”‡ ‘”†•‹”‡•’‡ –‘ˆ•‡ —”‹–‹‡•Š‡Ž†„›•— Š†‡’‘•‹–‘”›Ǥ

Option to opt out in respect of any Security

‡ –‹‘ ͳͶ ‘ˆ –Š‡  – ’”‘˜‹†‡• –Šƒ– ‹ˆ ƒ „‡‡ˆ‹ ‹ƒŽ ‘™‡” •‡‡• –‘ ‘’– ‘—– ‘ˆ ƒ †‡’‘•‹–‘”› ‹ ”‡•’‡ – ‘ˆ ƒ›
•‡ —”‹–›Š‡•ŠƒŽŽ‹ˆ‘”–Š‡†‡’‘•‹–‘”›ƒ ‘”†‹‰Ž›Ǥˆ–‡”–Š‡”‡ ‡‹’–‘ˆ‹–‹ƒ–‹‘–Š‡†‡’‘•‹–‘”›•Š‘—Ž†ƒ‡
ƒ’’”‘’”‹ƒ–‡‡–”‹‡•‹‹–•”‡ ‘”†•ƒ†ƒŽ•‘‹ˆ‘”–Š‡‹••—‡”Ǥ˜‡”›‹••—‡”•ŠƒŽŽǡ™‹–Š‹–Š‹”–›†ƒ›•‘ˆ–Š‡”‡ ‡‹’–
‘ˆ‹–‹ƒ–‹‘ˆ”‘–Š‡†‡’‘•‹–‘”›ƒ†‘ˆ—Žˆ‹ŽŽ‡–‘ˆ•— Š ‘†‹–‹‘•ƒ†‘’ƒ›‡–‘ˆ•— Šˆ‡‡•ƒ•ƒ›„‡
•’‡ ‹ˆ‹‡†„›–Š‡”‡‰—Žƒ–‹‘•ǡ‹••—‡–Š‡ ‡”–‹ˆ‹ ƒ–‡‘ˆ•‡ —”‹–‹‡•–‘–Š‡„‡‡ˆ‹ ‹ƒŽ‘™‡”‘”–Š‡–”ƒ•ˆ‡”‡‡ǡƒ•–Š‡
ƒ•‡ƒ›„‡Ǥ

Act 18 of 1891 to apply to depositories

‡ –‹‘ͳͷŽƒ›•†‘™–Šƒ––Š‡ƒ‡”•ǯ‘‘•˜‹†‡ ‡ –ǡͳͺͻͳ•ŠƒŽŽƒ’’Ž›‹”‡Žƒ–‹‘–‘ƒ†‡’‘•‹–‘”›ƒ•‹ˆ‹–™‡”‡
ƒ„ƒƒ•†‡ϐ‹‡†‹•‡ –‹‘ʹ‘ˆ–Šƒ– –Ǥ

Depositories to Indemnify Loss in certain cases

• ’‡” •‡ –‹‘ ͳ͸ǡ ƒ› Ž‘•• ƒ—•‡† –‘ –Š‡ „‡‡ˆ‹ ‹ƒŽ ‘™‡” †—‡ –‘ –Š‡ ‡‰Ž‹‰‡ ‡ ‘ˆ –Š‡ †‡’‘•‹–‘”› ‘” –Š‡
’ƒ”–‹ ‹’ƒ–ǡ ™‘—Ž† „‡ ‹†‡‹ˆ‹‡† „› –Š‡ †‡’‘•‹–‘”› –‘ •— Š „‡‡ˆ‹ ‹ƒŽ ‘™‡”Ǥ Š‡”‡ –Š‡ Ž‘•• †—‡ –‘ –Š‡
‡‰Ž‹‰‡ ‡‘ˆ–Š‡’ƒ”–‹ ‹’ƒ–‹•‹†‡‹ˆ‹‡†„›–Š‡†‡’‘•‹–‘”›ǡ–Š‡†‡’‘•‹–‘”›Šƒ•–Š‡”‹‰Š––‘”‡ ‘˜‡”–Š‡•ƒ‡
ˆ”‘•— Š’ƒ”–‹ ‹’ƒ–Ǥ
 84 Lesson 3 • EP-SLCM

POWERS OF THE SEBI

ͳǤ ‘ƒŽŽˆ‘” ˆ‘”ƒ–‹‘ƒ†“—‹”›

 ‡ –‹‘ͳͺ‘ˆ–Š‡ –’”‘˜‹†‡•–Šƒ––Š‡ ‹–Š‡’—„Ž‹ ‹–‡”‡•–‘”‹–Š‡‹–‡”‡•–‘ˆ‹˜‡•–‘”•ƒ›„›‘”†‡”‹
™”‹–‹‰ǡǦ
Ȉ ƒŽŽ—’‘ƒ›‹••—‡”ǡ†‡’‘•‹–‘”›ǡ’ƒ”–‹ ‹’ƒ–‘”„‡‡ϐ‹ ‹ƒŽ‘™‡”–‘ˆ—”‹•Š‹™”‹–‹‰•— Š‹ˆ‘”ƒ–‹‘
”‡Žƒ–‹‰–‘–Š‡•‡ —”‹–‹‡•Š‡Ž†‹ƒ†‡’‘•‹–‘”›ƒ•‹–ƒ›”‡“—‹”‡Ǣ‘”
Ȉ ƒ—–Š‘”‹•‡ƒ›’‡”•‘–‘ƒ‡ƒ‡“—‹”›‘”‹•’‡ –‹‘‹”‡Žƒ–‹‘–‘–Š‡ƒˆˆƒ‹”•‘ˆ–Š‡‹••—‡”ǡ„‡‡ϐ‹ ‹ƒŽ
‘™‡”ǡ†‡’‘•‹–‘”›‘”’ƒ”–‹ ‹’ƒ–ǡ™Š‘•ŠƒŽŽ•—„‹–ƒ”‡’‘”–‘ˆ•— Š‡“—‹”›‘”‹•’‡ –‹‘–‘‹–™‹–Š‹
•— Š’‡”‹‘†ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†‹–Š‡‘”†‡”Ǥ
 —„Ǧ•‡ –‹‘ȋʹȌ–‘‡ –‹‘ͳͺ’”‘˜‹†‡•–Šƒ–‡˜‡”›†‹”‡ –‘”ǡƒƒ‰‡”ǡ’ƒ”–‡”ǡ•‡ ”‡–ƒ”›ǡ‘ˆϐ‹ ‡”‘”‡’Ž‘›‡‡‘ˆ
the †‡’‘•‹–‘”›‘”‹••—‡”‘”–Š‡’ƒ”–‹ ‹’ƒ–‘”„‡‡ϐ‹ ‹ƒŽ‘™‡”•ŠƒŽŽ‘†‡ƒ†’”‘†— ‡„‡ˆ‘”‡–Š‡’‡”•‘
ƒ‹‰–Š‡‡“—‹”›‘”‹•’‡ –‹‘ƒŽŽ‹ˆ‘”ƒ–‹‘‘”•— Š”‡ ‘”†•ƒ†‘–Š‡”†‘ —‡–•‹Š‹• —•–‘†›Šƒ˜‹‰
ƒ„‡ƒ”‹‰‘–Š‡•—„Œ‡ –ƒ––‡”‘ˆ•— Š‡“—‹”›‘”‹•’‡ –‹‘Ǥ
ʹǤ ‘ ‹˜‡‹”‡ –‹‘•
 ‡ –‹‘ͳͻ’”‘˜‹†‡•–Šƒ––Š‡ ǡ‹ˆƒˆ–‡”ƒ‹‰‘” ƒ—•‹‰–‘„‡ƒ†‡ƒ‡“—‹”›‘”‹•’‡ –‹‘ǡ–Š‡ ‹•
•ƒ–‹•ϐ‹‡†–Šƒ–‹–‹•‡ ‡••ƒ”›‹–Š‡‹–‡”‡•–‘ˆ‹˜‡•–‘”•‘”–Š‡•‡ —”‹–‹‡•ƒ”‡–‘”–‘’”‡˜‡––Š‡ƒˆˆƒ‹”•‘ˆƒ›
†‡’‘•‹–‘”› ‘” ’ƒ”–‹ ‹’ƒ– „‡‹‰ ‘†— –‡† ‹ –Š‡ ƒ‡” †‡–”‹‡–ƒŽ –‘ –Š‡ ‹–‡”‡•–• ‘ˆ ‹˜‡•–‘”• ‘” –Š‡
•‡ —”‹–‹‡•ƒ”‡–ǡ‹–ƒ›‹••—‡•— Š†‹”‡ –‹‘•ǡȂ
ȋƒȌ –‘ƒ›†‡’‘•‹–‘”›‘”’ƒ”–‹ ‹’ƒ–‘”ƒ›’‡”•‘ƒ••‘ ‹ƒ–‡†™‹–Š–Š‡•‡ —”‹–‹‡•ƒ”‡–Ǣ‘”
(b) to any issuer,
ƒ•ƒ›„‡ƒ’’”‘’”‹ƒ–‡‹–Š‡‹–‡”‡•–‘ˆ‹˜‡•–‘”•‘”–Š‡•‡ —”‹–‹‡•ƒ”‡–Ǥ
 Š‡‘ƒ”†ƒ›ǡ„›‘”†‡”ǡˆ‘””‡ƒ•‘•–‘„‡”‡ ‘”†‡†‹™”‹–‹‰ǡŽ‡˜›’‡ƒŽ–›—†‡”•‡ –‹‘•ͳͻǡͳͻǡͳͻǡͳͻǡ
ͳͻǡͳͻ ǡͳͻ ƒ†ͳͻ ƒˆ–‡”Š‘Ž†‹‰ƒ‹“—‹”›‹–Š‡’”‡• ”‹„‡†ƒ‡”Ǥ

Š‡’‘™‡”–‘‹••—‡†‹”‡ –‹‘•—†‡”–Š‹••‡ –‹‘•ŠƒŽŽ‹ Ž—†‡ƒ†ƒŽ™ƒ›•„‡†‡‡‡†–‘Šƒ˜‡„‡‡‹ Ž—†‡†–Š‡

’‘™‡” –‘ †‹”‡ – ƒ› ’‡”•‘ǡ ™Š‘ ƒ†‡ ’”‘ϐ‹– ‘” ƒ˜‡”–‡† Ž‘•• „› ‹†—Ž‰‹‰ ‹ ƒ› –”ƒ•ƒ –‹‘ ‘” ƒ –‹˜‹–› ‹
‘–”ƒ˜‡–‹‘‘ˆ–Š‡’”‘˜‹•‹‘•‘ˆ–Š‹• –‘””‡‰—Žƒ–‹‘•ƒ†‡–Š‡”‡—†‡”ǡ–‘†‹•‰‘”‰‡ƒƒ‘—–‡“—‹˜ƒŽ‡––‘
–Š‡™”‘‰ˆ—Ž‰ƒ‹ƒ†‡‘”Ž‘••ƒ˜‡”–‡†„›•— Š ‘–”ƒ˜‡–‹‘Ǥ

͵Ǥ ‘ƒ‡‡‰—Žƒ–‹‘•
 ‡ –‹‘ ʹͷ ‘ˆ –Š‡  – ’”‘˜‹†‡• –Šƒ– –Š‡   ƒ›ǡ „› ‘–‹ϐ‹ ƒ–‹‘ ‹ –Š‡ ˆϐ‹ ‹ƒŽ ƒœ‡––‡ǡ ƒ‡ ”‡‰—Žƒ–‹‘•
‘•‹•–‡–™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ–Š‹• –ƒ†–Š‡”—Ž‡•ƒ†‡–Š‡”‡—†‡”–‘ ƒ””›‘—––Š‡’—”’‘•‡•‘ˆ–Š‹• –Ǥ
’ƒ”–‹ —Žƒ”ǡƒ†™‹–Š‘—–’”‡Œ—†‹ ‡–‘–Š‡‰‡‡”ƒŽ‹–›‘ˆ–Š‡ˆ‘”‡‰‘‹‰’‘™‡”ǡ•— Š”‡‰—Žƒ–‹‘•ƒ›’”‘˜‹†‡
for—
Ȉ –Š‡ˆ‘”‹™Š‹ Š”‡ ‘”†‹•–‘„‡ƒ‹–ƒ‹‡†Ǣ
Ȉ –Š‡ˆ‘”‹™Š‹ Š–Š‡ ‡”–‹ϐ‹ ƒ–‡‘ˆ ‘‡ ‡‡–‘ˆ„—•‹‡•••ŠƒŽŽ„‡‹••—‡†Ǣ
 Lesson 3 • Depositories Act, 1996 85

Ȉ –Š‡ƒ‡”‹™Š‹ Š–Š‡ ‡”–‹ϐ‹ ƒ–‡‘ˆ•‡ —”‹–›•ŠƒŽŽ„‡•—””‡†‡”‡†Ǣ

Ȉ –Š‡ƒ‡”‘ˆ ”‡ƒ–‹‰ƒ’Ž‡†‰‡‘”Š›’‘–Š‡ ƒ–‹‘‹”‡•’‡ –‘ˆ•‡ —”‹–›‘™‡†„›ƒ„‡‡ϐ‹ ‹ƒŽ‘™‡”Ǣ
Ȉ –Š‡ ‘†‹–‹‘•ƒ†–Š‡ˆ‡‡•’ƒ›ƒ„Ž‡™‹–Š”‡•’‡ ––‘–Š‡‹••—‡‘ˆ ‡”–‹ϐ‹ ƒ–‡‘ˆ•‡ —”‹–‹‡•Ǣ
Ȉ –Š‡”‹‰Š–•ƒ†‘„Ž‹‰ƒ–‹‘•‘ˆ–Š‡†‡’‘•‹–‘”‹‡•ǡ’ƒ”–‹ ‹’ƒ–•ƒ†–Š‡‹••—‡”•Ǣ
Ȉ –Š‡‡Ž‹‰‹„‹Ž‹–› ”‹–‡”‹ƒˆ‘”ƒ†‹••‹‘‘ˆ•‡ —”‹–‹‡•‹–‘–Š‡†‡’‘•‹–‘”›Ǥ
Ȉ –Š‡–‡”•†‡–‡”‹‡†„›–Š‡‘ƒ”†ˆ‘”•‡––Ž‡‡–‘ˆ’”‘ ‡‡†‹‰•Ǣ
Ȉ ƒ› ‘–Š‡” ƒ––‡” ™Š‹ Š ‹• ”‡“—‹”‡† –‘ „‡ǡ ‘” ƒ› „‡ǡ •’‡ ‹ϐ‹‡† „› ”‡‰—Žƒ–‹‘• ‘” ‹ ”‡•’‡ – ‘ˆ ™Š‹ Š
’”‘˜‹•‹‘–‘„‡ƒ†‡„›”‡‰—Žƒ–‹‘•Ǥ

PENALTIES AND ADJUDICATION

Š‡ ƒ›ǡ„›‘”†‡”ǡˆ‘””‡ƒ•‘•–‘„‡”‡ ‘”†‡†‹™”‹–‹‰ǡŽ‡˜›ǡ’‡ƒŽ–›ƒˆ–‡”Š‘Ž†‹‰ƒ‹“—‹”›‹–Š‡’”‡• ”‹„‡†
ƒ‡”Ǥ

Sl ‘Ǥ Section Particulars

ͳǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘ˆ—”‹•Š‹ˆ‘”ƒ–‹‘ǡ”‡–—”ǡ‡– Ǥ

ʹǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘‡–‡”‹–‘ƒƒ‰”‡‡‡–Ǥ

͵Ǥ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘”‡†”‡••‹˜‡•–‘”•ǯ‰”‹‡˜ƒ ‡•Ǥ

ͶǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”†‡Žƒ›‹†‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘‘”‹••—‡‘ˆ ‡”–‹ϐ‹ ƒ–‡‘ˆ•‡ —”‹–‹‡•Ǥ

ͷǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘”‡ ‘ ‹Ž‡”‡ ‘”†•Ǥ

͸Ǥ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘ ‘’Ž›™‹–Š†‹”‡ –‹‘•‹••—‡†„›–Š‡ —†‡”•‡ –‹‘ͳͻ‘ˆ–Š‡ –Ǥ

͹Ǥ ‡ –‹‘ͳͻ  ‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘ ‘†— –„—•‹‡••‹ƒˆƒ‹”ƒ‡”Ǥ

ͺǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘” ‘–”ƒ˜‡–‹‘™Š‡”‡‘•‡’ƒ”ƒ–‡’‡ƒŽ–›Šƒ•„‡‡’”‘˜‹†‡†Ǥ

ͻǤ ‡ –‹‘ͳͻ ‡ƒŽ–›ˆ‘”’‘™‡”–‘ƒ†Œ—†‹ ƒ–‡Ǥ

ͳͲǤ ‡ –‹‘ͳͻ ƒ –‘”•–‘„‡–ƒ‡‹–‘ƒ ‘—–„›ƒ†Œ—†‹ ƒ–‹‰‘ˆϐ‹ ‡”™Š‹Ž‡ƒ†Œ—†‰‹‰“—ƒ–—‘ˆ’‡ƒŽ–›Ǥ

ͳͳǤ ‡ –‹‘ͳͻǦ  ‡––Ž‡‡–‘ˆ†‹‹•–”ƒ–‹˜‡‹˜‹Ž”‘ ‡‡†‹‰•Ǥ

ͳʹǤ ‡ –‹‘ͳͻǦ  ‡ ‘˜‡”›‘ˆƒ‘—–•Ǥ

ͳ͵Ǥ ‡ –‹‘ͳͻǦ  ‘–‹—ƒ ‡‘ˆ’”‘ ‡‡†‹‰•

ͳͶǤ ‡ –‹‘ͳͻ ”‡†‹–‹‰•—•”‡ƒŽ‹•‡†„›™ƒ›‘ˆ’‡ƒŽ–‹‡•–‘‘•‘Ž‹†ƒ–‡† —†‘ˆ †‹ƒǤ

 86 Lesson 3 • EP-SLCM

Penalties

ŠƒŽŽ„‡Ž‹ƒ„Ž‡–‘ƒ’‡ƒŽ–›
™Š‹ Š•ŠƒŽŽ‘–„‡Ž‡•• PENALTY
–Šƒ‘‡ŽƒŠ”—’‡‡•„—–
™Š‹ Šƒ›‡š–‡†–‘‘‡
”‘”‡”—’‡‡•Ǥ

•ŠƒŽŽ„‡Ž‹ƒ„Ž‡–‘ƒ’‡ƒŽ–›™Š‹ Š•ŠƒŽŽ‘–„‡Ž‡••–Šƒ‘‡ŽƒŠ”—’‡‡•
„—–™Š‹ Šƒ›‡š–‡†–‘‘‡ŽƒŠ”—’‡‡•ˆ‘”‡ƒ Š†ƒ›†—”‹‰™Š‹ Š•— Š
ˆƒ‹Ž—”‡ ‘–‹—‡••—„Œ‡ ––‘ƒƒš‹—‘ˆ‘‡ ”‘”‡”—’‡‡•Ǥ

– •ŠƒŽŽ „‡ Ž‹ƒ„Ž‡ –‘ ’‡ƒŽ–› ™Š‹ Š •ŠƒŽŽ ‘– „‡

Ž‡••–Šƒϐ‹˜‡ ”‘”‡”—’‡‡•„—–™Š‹ Šƒ›‡š–‡†
‡ƒŽ–›ˆ‘”ˆƒ‹Ž—”‡–‘ ‘†— – –‘ –™‡–›Ǧϐ‹˜‡ ”‘”‡ ”—’‡‡• ‘” –Š”‡‡ –‹‡• –Š‡
„—•‹‡••‹ƒˆƒ‹”ƒ‡”Ǥ ƒ‘—– ‘ˆ ‰ƒ‹• ƒ†‡ ‘—– ‘ˆ •— Š ˆƒ‹Ž—”‡ǡ
™Š‹ Š‡˜‡”‹•Š‹‰Š‡”Ǥ

Adjudication
Š‡ ƒ†Œ—†‹ ƒ–‹‘ ’”‘ ‡†—”‡ǡ ‡––Ž‡‡– ‘ˆ †‹‹•–”ƒ–‹˜‡ ‹˜‹Ž ”‘ ‡‡†‹‰•ǡ ‡ ‘˜‡”› ‘ˆ ƒ‘—–•ǡ ‘–‹—ƒ ‡ ‘ˆ
”‘ ‡‡†‹‰•ǡ”‡†‹–‹‰•—•„›™ƒ›‘ˆ‡ƒŽ‹–‹‡•–‘‘•‘Ž‹†ƒ–‡†ˆ—†‘ˆ †‹ƒǡƒ•‡–‹‘‡†—†‡”‡ –‹‘ͳͻ –‘ͳͻ ‘ˆ
–Š‡‡’‘•‹–‘”‹‡• –ǡͳͻͻ͸ƒ”‡•ƒ‡ƒ•–Š‡ƒ†Œ—†‹ ƒ–‹‘’”‘ ‡†—”‡’”‡• ”‹„‡†—†‡”–Š‡  –ǡͳͻͻʹǤȋ‡••‘ǦʹȌ

OFFENCES AND COGNIZANCE

Ž‘Ǥ Section Particulars

ͳǤ ‡ –‹‘ʹͲ ˆˆ‡ ‡•

ʹǤ ‡ –‹‘ʹͳ ‘–”ƒ˜‡–‹‘„›‘’ƒ‹‡•
Lesson 3 • Depositories Act, 1996 87

͵Ǥ ‡ –‹‘ʹʹ ‘‰‹œƒ ‡‘ˆˆˆ‡ ‡•„›‘—”–•

ͶǤ ‡ –‹‘ʹʹ ‘’‘•‹–‹‘‘ˆ ‡”–ƒ‹ˆˆ‡ ‡•

ͷǤ ‡ –‹‘ʹʹ ‘™‡”–‘‰”ƒ–‹—‹–›

͸Ǥ ‡ –‹‘ʹʹ •–ƒ„Ž‹•Š‡–‘ˆ’‡ ‹ƒŽ‘—”–•

͹Ǥ ‡ –‹‘ʹʹ ˆˆ‡ ‡•–”‹ƒ„Ž‡„›’‡ ‹ƒŽ‘—”–•

ͺǤ ‡ –‹‘ʹʹ ’’‡ƒŽƒ†”‡˜‹•‹‘

ͻǤ ‡ –‹‘ʹʹ ’’Ž‹ ƒ–‹‘‘ˆ‘†‡–‘’”‘ ‡‡†‹‰•„‡ˆ‘”‡’‡ ‹ƒŽ‘—”–

ͳͲǤ ‡ –‹‘ʹʹ ”ƒ•‹–‹‘ƒŽ”‘˜‹•‹‘•

ͳͳǤ ‡ –‹‘ʹ͵ ’’‡ƒŽ•

ͳʹǤ ‡ –‹‘ʹ͵ ’’‡ƒŽ–‘

ͳ͵Ǥ ‡ –‹‘ʹ͵ ”‘ ‡†—”‡ƒ†’‘™‡”•‘ˆ‡ —”‹–‹‡•’’‡ŽŽƒ–‡”‹„—ƒŽ

ͳͶǤ ‡ –‹‘ʹ͵ ‹‰Š––‘Ž‡‰ƒŽ”‡’”‡•‡–ƒ–‹‘

ͳͷǤ ‡ –‹‘ʹ͵ ‹‹–ƒ–‹‘

ͳ͸Ǥ ‡ –‹‘ʹ͵ ‹˜‹Ž ‘—”–‘––‘Šƒ˜‡Œ—”‹•†‹ –‹‘

ͳ͹Ǥ ‡ –‹‘ʹ͵ ’’‡ƒŽ–‘—’”‡‡‘—”–

ͳͺǤ ‡ –‹‘ʹ͵ ‘™‡”•‘ˆ‘ƒ”†‘––‘ƒ’’Ž›–‘ –‡”ƒ–‹‘ƒŽ ‹ƒ ‹ƒŽ‡”˜‹ ‡•‡–”‡

Offences
 88 Lesson 3 • EP-SLCM

Š‡”‡ƒ ‘–”ƒ˜‡–‹‘‘ˆƒ›‘ˆ–Š‡
’”‘˜‹•‹‘• ‘ˆ –Š‹•  – ‘” ƒ›  ”—Ž‡ǡ
”‡‰—Žƒ–‹‘ǡ†‹”‡ –‹‘‘”‘”†‡”ƒ†‡
–Š‡”‡—†‡” Šƒ• „‡‡ ‘‹––‡† „›
ƒ ‘’ƒ›ǡ ‡˜‡”›’‡”•‘™Š‘ƒ––Š‡
–‹‡ –Š‡ ‘–”ƒ˜‡–‹‘ ™ƒ•
‘‹––‡†™ƒ•‹ Šƒ”‰‡‘ˆǡƒ†™ƒ•
”‡•’‘•‹„Ž‡–‘ǡ–Š‡ ‘’ƒ›ˆ‘”–Š‡
conduct of the business of the
‘’ƒ›ǡ ƒ• ™‡ŽŽ ƒ• –Š‡  ‘’ƒ›ǡ
•ŠƒŽŽ „‡ †‡‡‡† –‘ „‡ ‰—‹Ž–› ‘ˆ –Š‡
‘–”ƒ˜‡–‹‘ƒ†•ŠƒŽŽ„‡Ž‹ƒ„Ž‡–‘
be proceeded against and punished
ƒ ‘”†‹‰Ž›Ǥ
Contravention by companies
”‘˜‹†‡†–Šƒ–‘–Š‹‰ ‘–ƒ‹‡†‹
–Š‹• •—„Ǧ•‡ –‹‘ •ŠƒŽŽ ”‡†‡” ƒ›
•— Š ’‡”•‘ Ž‹ƒ„Ž‡ –‘ any
’—‹•Š‡–’”‘˜‹†‡†‹–Š‹• –ǡ‹ˆ
Š‡ ’”‘˜‡• –Šƒ– –Š‡ ‘–”ƒ˜‡–‹‘
™ƒ• ‘‹––‡† ™‹–Š‘—– Š‹•
‘™Ž‡†‰‡‘”–Šƒ–Š‡Šƒ†‡š‡” ‹•‡†
ƒŽŽ †—‡ †‹Ž‹‰‡ ‡ –‘ ’”‡˜‡– –Š‡
‘‹••‹‘‘ˆ•— Š ‘–”ƒ˜‡–‹‘Ǥ
Š‡”‡ ƒ ‘–”ƒ˜‡–‹‘  ‘ˆ  ƒ› ‘ˆ
–Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‹•  – ‘” ƒ›
”—Ž‡ǡ ”‡‰—Žƒ–‹‘ǡ †‹”‡ –‹‘ ‘” ‘”†‡”
ƒ†‡ –Š‡”‡—†‡” Šƒ• „‡‡
‘‹––‡† „› ƒ ‘’ƒ› ƒ† ‹– ‹•
’”‘˜‡† –Šƒ– –Š‡ ‘–”ƒ˜‡–‹‘ Šƒ•
„‡‡ ‘‹––‡†™‹–Š–Š‡ ‘•‡–‘”
‘‹˜ƒ ‡ ‘ˆǡ ‘” ‹• ƒ––”‹„—–ƒ„Ž‡ –‘
ƒ› ‡‰Ž‡ – ‘ –Š‡ ’ƒ”– ‘ˆǡ ƒ›
†‹”‡ –‘”ǡ ƒƒ‰‡”ǡ secretary or
‘–Š‡” ‘ˆϐ‹ ‡” ‘ˆ –Š‡ ‘’ƒ›ǡ •— Š
director, ƒƒ‰‡”ǡ •‡ ”‡–ƒ”› ‘”
‘–Š‡” ‘ˆϐ‹ ‡”  •ŠƒŽŽ ƒŽ•‘ „‡ †‡‡‡†
–‘„‡‰—‹Ž–›‘ˆ–Š‡ ‘–”ƒ˜‡–‹‘ƒ†
•ŠƒŽŽ „‡ Ž‹ƒ„Ž‡ –‘ „‡ ’”‘ ‡‡†‡†
ƒ‰ƒ‹•–ƒ†’—‹•Š‡†ƒ ‘”†‹‰Ž›Ǥ

Cognizance of offences by courts

‡ –‹‘ʹʹ’”‘˜‹†‡•–Šƒ–‘ ‘—”–•ŠƒŽŽ–ƒ‡ ‘‰‹œƒ ‡‘ˆƒ›‘ˆˆ‡ ‡’—‹•Šƒ„Ž‡—†‡”–Š‹• –‘”ƒ›”—Ž‡•
‘””‡‰—Žƒ–‹‘•‘”„›‡ǦŽƒ™•ƒ†‡–Š‡”‡—†‡”ǡ•ƒ˜‡‘ƒ ‘’Žƒ‹–ƒ†‡„›–Š‡‡–”ƒŽ ‘˜‡”‡–‘”–ƒ–‡
‘˜‡”‡–‘”–Š‡ ‘”„›ƒ›’‡”•‘Ǥ

Composition of certain offences

‡ –‹‘ʹʹ’”‘˜‹†‡•–Šƒ–‘–™‹–Š•–ƒ†‹‰ƒ›–Š‹‰ ‘–ƒ‹‡†‹–Š‡‘†‡‘ˆ”‹‹ƒŽ”‘ ‡†—”‡ǡͳͻ͹͵ǡƒ›
‘ˆˆ‡ ‡ ’—‹•Šƒ„Ž‡ —†‡” –Š‹•  –ǡ ‘– „‡‹‰ ƒ ‘ˆˆ‡ ‡ ’—‹•Šƒ„Ž‡ ™‹–Š ‹’”‹•‘‡– ‘Ž›ǡ ‘” ™‹–Š
‹’”‹•‘‡–ƒ†ƒŽ•‘™‹–Šϐ‹‡ǡƒ›‡‹–Š‡”„‡ˆ‘”‡‘”ƒˆ–‡”–Š‡‹•–‹–—–‹‘‘ˆƒ›’”‘ ‡‡†‹‰ǡ„‡ ‘’‘—†‡†
„›ƒ‡ —”‹–‹‡•’’‡ŽŽƒ–‡”‹„—ƒŽ‘”ƒ ‘—”–„‡ˆ‘”‡™Š‹ Š•— Š’”‘ ‡‡†‹‰•ƒ”‡’‡†‹‰Ǥ

Miscellaneous provisions
Š‡ ‹• ‡ŽŽƒ‡‘—• ’”‘˜‹•‹‘• ˆ”‘ ‡ –‹‘ ʹʹ –‘ ʹ͵  ƒ• ‡–‹‘‡† ƒ„‘˜‡ ‹ –Š‡ –ƒ„Ž‡ ƒ”‡ •ƒ‡ ƒ• –Š‡
’”‘˜‹•‹‘•ƒ•’”‡• ”‹„‡†—†‡”–Š‡  –ǡͳͻͻʹǤ

POWER OF CENTRAL GOVERNMENT TO MAKE RULES

‡ –‹‘ʹͶ‘ˆ–Š‡ –’”‘˜‹†‡•–Šƒ––Š‡‡–”ƒŽ ‘˜‡”‡–ƒ›ǡ„›‘–‹ϐ‹ ƒ–‹‘‹–Š‡ˆϐ‹ ‹ƒŽ ƒœ‡––‡ǡƒ‡”—Ž‡•
ˆ‘” ƒ””›‹‰‘—––Š‡’”‘˜‹•‹‘•‘ˆ–Š‹• –Ǥ ’ƒ”–‹ —Žƒ”ǡƒ†™‹–Š‘—–’”‡Œ—†‹ ‡–‘–Š‡‰‡‡”ƒŽ‹–›‘ˆ–Š‡ˆ‘”‡‰‘‹‰
’‘™‡”ǡ•— Š”—Ž‡•ƒ›’”‘˜‹†‡ˆ‘”ƒŽŽ‘”ƒ›‘ˆ–Š‡ˆ‘ŽŽ‘™‹‰ƒ––‡”•ǡƒ‡Ž›ǣȄ
Ȉ –Š‡ƒ‡”‘ˆ‹“—‹”›—†‡”•—„Ǧ•‡ –‹‘ȋͳȌ‘ˆ•‡ –‹‘ͳͻ Ǣ
Ȉ –Š‡–‹‡™‹–Š‹™Š‹ Šƒƒ’’‡ƒŽƒ›„‡’”‡ˆ‡””‡†—†‡”•—„Ǧ•‡ –‹‘ȋͳȌ‘ˆ•‡ –‹‘ʹ͵Ǣ
Ȉ –Š‡ˆ‘”‹™Š‹ Šƒƒ’’‡ƒŽƒ›„‡’”‡ˆ‡””‡†—†‡”•—„Ǧ•‡ –‹‘ȋ͵Ȍ‘ˆ•‡ –‹‘ʹ͵ƒ†–Š‡ˆ‡‡•’ƒ›ƒ„Ž‡‹
”‡•’‡ –‘ˆ•— Šƒ’’‡ƒŽǢ
Ȉ –Š‡’”‘ ‡†—”‡ˆ‘”†‹•’‘•‹‰‘ˆƒƒ’’‡ƒŽ—†‡”•—„Ǧ•‡ –‹‘ȋͶȌ‘ˆ•‡ –‹‘ʹ͵Ǣ
Ȉ –Š‡ˆ‘”‹™Š‹ Šƒƒ’’‡ƒŽƒ›„‡ϐ‹Ž‡†„‡ˆ‘”‡–Š‡‡ —”‹–‹‡•’’‡ŽŽƒ–‡”‹„—ƒŽ—†‡”•‡ –‹‘ʹ͵ƒ†–Š‡
ˆ‡‡•’ƒ›ƒ„Ž‡‹”‡•’‡ –‘ˆ•— Šƒ’’‡ƒŽǤ

‡š‡” ‹•‡‘ˆ–Š‡’‘™‡”• ‘ˆ‡””‡†ǡ–Š‡‡–”ƒŽ ‘˜‡”‡–ƒ‡•–Š‡‡’‘•‹–‘”‹‡•ȋ”‘ ‡†—”‡ˆ‘” ‘Ž†‹‰

‡“—‹”› ƒ† ‹’‘•‹‰ ’‡ƒŽ–‹‡• „› ƒ†Œ—†‹ ƒ–‹‰ ‘ˆϐ‹ ‡”Ȍ —Ž‡•ǡ ʹͲͲͷ ˆ‘” Š‘Ž†‹‰ ‹“—‹”› ˆ‘” –Š‡ ’—”’‘•‡ ‘ˆ
‹’‘•‹‰’‡ƒŽ–›—†‡”•‡ –‹‘•ͳͻ–‘ͳͻ ‘ˆ–Š‡‡’‘•‹–‘”‹‡• –Ǥ
 Lesson 3 • Depositories Act, 1996 89

POWER OF DEPOSITORIES TO MAKE BYE-LAWS

†‡’‘•‹–‘”›•ŠƒŽŽǡ™‹–Š–Š‡’”‡˜‹‘—•ƒ’’”‘˜ƒŽ‘ˆ–Š‡‘ƒ”†ǡƒ‡„›‡ǦŽƒ™• ‘•‹•–‡–™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ this
 –ƒ†–Š‡”‡‰—Žƒ–‹‘•Ǥ ’ƒ”–‹ —Žƒ”ǡƒ†™‹–Š‘—–’”‡Œ—†‹ ‡–‘–Š‡‰‡‡”ƒŽ‹–›‘ˆ–Š‡ˆ‘”‡‰‘‹‰’‘™‡”ǡ•— Š„›‡ǦŽƒ™•
•ŠƒŽŽ’”‘˜‹†‡ˆ‘”Ǧ
• –Š‡‡Ž‹‰‹„‹Ž‹–› ”‹–‡”‹ƒˆ‘”ƒ†‹••‹‘ƒ†”‡‘˜ƒŽ‘ˆ•‡ —”‹–‹‡•‹–Š‡†‡’‘•‹–‘”›Ǣ
Ȉ –Š‡ ‘†‹–‹‘••—„Œ‡ ––‘™Š‹ Š–Š‡•‡ —”‹–‹‡••ŠƒŽŽ„‡†‡ƒŽ–™‹–ŠǢ
Ȉ –Š‡‡Ž‹‰‹„‹Ž‹–› ”‹–‡”‹ƒˆ‘”ƒ†‹••‹‘‘ˆƒ›’‡”•‘ƒ•ƒ’ƒ”–‹ ‹’ƒ–Ǣ
Ȉ –Š‡ƒ‡”ƒ†’”‘ ‡†—”‡ˆ‘”†‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘‘ˆ•‡ —”‹–‹‡•Ǣ
Ȉ –Š‡’”‘ ‡†—”‡ˆ‘”–”ƒ•ƒ –‹‘•™‹–Š‹–Š‡†‡’‘•‹–‘”›Ǣ
Ȉ –Š‡ƒ‡”‹™Š‹ Š•‡ —”‹–‹‡••ŠƒŽŽ„‡†‡ƒŽ–™‹–Š‘”™‹–Š†”ƒ™ˆ”‘ƒ†‡’‘•‹–‘”›Ǣ
Ȉ –Š‡’”‘ ‡†—”‡ˆ‘”‡•—”‹‰•ƒˆ‡‰—ƒ”†•–‘’”‘–‡ ––Š‡‹–‡”‡•–•‘ˆ’ƒ”–‹ ‹’ƒ–•ƒ†„‡‡ϐ‹ ‹ƒŽ‘™‡”•Ǣ
Ȉ –Š‡ ‘†‹–‹‘•‘ˆƒ†‹••‹‘‹–‘ƒ†™‹–Š†”ƒ™ƒŽˆ”‘ƒ’ƒ”–‹ ‹’ƒ–„›ƒ„‡‡ϐ‹ ‹ƒŽ‘™‡”Ǣ
Ȉ –Š‡  ’”‘ ‡†—”‡  ˆ‘”  ‘˜‡›‹‰  ‹ˆ‘”ƒ–‹‘  –‘  –Š‡  ’ƒ”–‹ ‹’ƒ–•  ƒ†  „‡‡ϐ‹ ‹ƒŽ  ‘™‡”•  ‘  †‹˜‹†‡†
†‡ Žƒ”ƒ–‹‘ǡ•Šƒ”‡Š‘Ž†‡”‡‡–‹‰•ƒ†‘–Š‡”ƒ––‡”•‘ˆ‹–‡”‡•––‘–Š‡„‡‡ϐ‹ ‹ƒŽ‘™‡”•Ǣ
Ȉ –Š‡ƒ‡”‘ˆ†‹•–”‹„—–‹‘‘ˆ†‹˜‹†‡†•ǡ‹–‡”‡•–ƒ†‘‡–ƒ”›„‡‡ϐ‹–•”‡ ‡‹˜‡†ˆ”‘–Š‡ ‘’ƒ›ƒ‘‰
„‡‡ϐ‹ ‹ƒŽ‘™‡”•Ǣ
Ȉ –Š‡ƒ‡”‘ˆ ”‡ƒ–‹‰’Ž‡†‰‡‘”Š›’‘–Š‡ ƒ–‹‘‹”‡•’‡ –‘ˆ•‡ —”‹–‹‡•Š‡Ž†™‹–Šƒ†‡’‘•‹–‘”›Ǣ
Ȉ ‹–‡”•‡”‹‰Š–•ƒ†‘„Ž‹‰ƒ–‹‘•ƒ‘‰–Š‡†‡’‘•‹–‘”›ǡ‹••—‡”ǡ’ƒ”–‹ ‹’ƒ–•ǡƒ†„‡‡ϐ‹ ‹ƒŽ‘™‡”•Ǣ
Ȉ –Š‡ƒ‡”ƒ†–Š‡’‡”‹‘†‹ ‹–›‘ˆˆ—”‹•Š‹‰‹ˆ‘”ƒ–‹‘–‘–Š‡‘ƒ”†ǡ‹••—‡”ƒ†‘–Š‡”’‡”•‘•Ǣ
Ȉ –Š‡’”‘ ‡†—”‡ˆ‘””‡•‘Ž˜‹‰†‹•’—–‡•‹˜‘Ž˜‹‰†‡’‘•‹–‘”›ǡ‹••—‡”ǡ ‘’ƒ›‘”ƒ„‡‡ϐ‹ ‹ƒŽ‘™‡”Ǣ
Ȉ –Š‡’”‘ ‡†—”‡ˆ‘”’”‘ ‡‡†‹‰ƒ‰ƒ‹•––Š‡’ƒ”–‹ ‹’ƒ– ‘‹––‹‰„”‡ƒ Š‘ˆ–Š‡”‡‰—Žƒ–‹‘•ƒ†’”‘˜‹•‹‘•ˆ‘”
•—•’‡•‹‘ƒ†‡š’—Ž•‹‘‘ˆ’ƒ”–‹ ‹’ƒ–•ˆ”‘–Š‡†‡’‘•‹–‘”›ƒ† ƒ ‡ŽŽƒ–‹‘‘ˆƒ‰”‡‡‡–•‡–‡”‡†™‹–Š
–Š‡†‡’‘•‹–‘”›Ǣ
Ȉ –Š‡‹–‡”ƒŽ ‘–”‘Ž•–ƒ†ƒ”†•‹ Ž—†‹‰’”‘ ‡†—”‡ˆ‘”ƒ—†‹–‹‰ǡ”‡˜‹‡™‹‰ƒ†‘‹–‘”‹‰Ǥ

Š‡”‡–Š‡  ‘•‹†‡”•‹–‡š’‡†‹‡–•‘–‘†‘ǡ‹–ƒ›ǡ„›‘”†‡”‹™”‹–‹‰ǡ†‹”‡ –ƒ†‡’‘•‹–‘”›–‘ƒ‡ƒ›„›‡ǦŽƒ™•

‘”–‘ƒ‡†‘””‡˜‘‡ƒ›„›‡ǦŽƒ™•ƒŽ”‡ƒ†›ƒ†‡™‹–Š‹•— Š’‡”‹‘†ƒ•‹–ƒ›•’‡ ‹ˆ›‹–Š‹•„‡ŠƒŽˆǤ
ˆ–Š‡†‡’‘•‹–‘”›ˆƒ‹Ž•‘”‡‰Ž‡ –•–‘ ‘’Ž›™‹–Š•— Š‘”†‡”™‹–Š‹–Š‡•’‡ ‹ϐ‹‡†’‡”‹‘†ǡ–Š‡ ƒ›ƒ‡–Š‡„›‡Ǧ
Žƒ™•‘”ƒ‡†‘””‡˜‘‡–Š‡„›‡ǦŽƒ™•ƒ†‡‡‹–Š‡”‹–Š‡ˆ‘”•’‡ ‹ϐ‹‡†‹–Š‡‘”†‡”‘”™‹–Š•— Š‘†‹ϐ‹ ƒ–‹‘•
–Š‡”‡‘ˆƒ•–Š‡ –Š‹•ϐ‹–Ǥ

SEBI (DEPOSITORIES AND PARTICIPANTS) REGULATIONS, 2018

Š‡ ‡’‘•‹–‘”‹‡•  –ǡ ͳͻͻ͸ ”‡“—‹”‡• –Šƒ– –Š‡ ”‡‰‹•–”ƒ–‹‘ ‘ˆ –Š‡ †‡’‘•‹–‘”›ǡ †‡’‘•‹–‘”› ’ƒ”–‹ ‹’ƒ– ƒ† –Š‡
—•–‘†‹ƒǡ‹•ƒ†ƒ–‘”›™‹–Š–Š‡ ǤŠ‡•‡ƒ”‡–‹–‡”‡†‹ƒ”‹‡• ƒˆ— –‹‘‘” ‘‡ ‡„—•‹‡••‘Ž›
ƒˆ–‡””‡‰‹•–”ƒ–‹‘ˆ”‘ Šƒ•„‡‡‘„–ƒ‹‡†ƒ†”‡“—‹•‹–‡ˆ‡‡’ƒ‹†–‘ ǤŠ‡”‡“—‹”‡‡–‘ˆ”‡‰‹•–”ƒ–‹‘
‹•ƒ ‘–‹—‹‰‘‡ƒ†–Š‡‘‡––Š‡”‡‰‹•–”ƒ–‹‘‹• ƒ ‡ŽŽ‡†‘””‡˜‘‡†‘”•—””‡†‡”‡†ǡ–Š‡’‡”•‘•ŠƒŽŽ
‡ƒ•‡–‘ƒ –ƒ••— ŠǤ
Š‡  ǡ ‘  –‘„‡” ͵ǡ ʹͲͳͺǡ ‘–‹ϐ‹‡† –Š‡   ȋ‡’‘•‹–‘”‹‡• ƒ† ƒ”–‹ ‹’ƒ–•Ȍ ‡‰—Žƒ–‹‘•ǡ ʹͲͳͺ ȋǮ‡™ 
‡‰—Žƒ–‹‘•ǯȌǡ ”‡’‡ƒŽ‹‰ –Š‡   ȋ‡’‘•‹–‘”‹‡• ƒ† ƒ”–‹ ‹’ƒ–•Ȍ ‡‰—Žƒ–‹‘•ǡ ͳͻͻ͸ ȋǮŽ†  ‡‰—Žƒ–‹‘•ǯȌ
‹–”‘†— ‹‰ƒ‡†‡–•Žƒ”‰‡Ž›”‡Žƒ–‡†–‘•–”— –—”‹‰ǡ•Šƒ”‡Š‘Ž†‹‰ƒ†‰‘˜‡”ƒ ‡‘ˆ†‡’‘•‹–‘”‹‡•Ǥ
Š‡•‡”‡‰—Žƒ–‹‘•ƒŽ•‘ ‘–ƒ‹’”‘˜‹•‹‘•ˆ‘”‘’‡”ƒ–‹‘•ƒ†ˆ— –‹‘‹‰‘ˆ†‡’‘•‹–‘”‹‡•ǡˆ‘”ˆ‘”ƒ’’Ž‹ ƒ–‹‘ƒ†
‡”–‹ϐ‹ ƒ–‡•—•‡†ƒ†• Š‡†—Ž‡‘ˆˆ‡‡•ˆ‘”’ƒ”–‹ ‹’ƒ–•ǡ‡– Ǥ –ƒŽ•‘ ‘–ƒ‹•’”‘˜‹•‹‘•ˆ‘””‡‰‹•–”ƒ–‹‘‘ˆ†‡’‘•‹–‘”›
ƒ††‡’‘•‹–‘”›’ƒ”–‹ ‹’ƒ–•ǡ”‹‰Š–•ƒ†‘„Ž‹‰ƒ–‹‘•‘ˆ˜ƒ”‹‘—s users and constituents, inspection and procedure for
ƒ –‹‘‹ ƒ•‡‘ˆ†‡ˆƒ—Ž–Ǥ
 90 Lesson 3 • EP-SLCM

RECONCILIATION
‡‰—Žƒ–‹‘͹ͷ‘ˆ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺ’”‘˜‹†‡•–Šƒ––Š‡‹••—‡”‘”‹–•ƒ‰‡–•ŠƒŽŽ
”‡ ‘ ‹Ž‡–Š‡”‡ ‘”†•‘ˆ†‡ƒ–‡”‹ƒŽ‹•‡†•‡ —”‹–‹‡•™‹–ŠƒŽŽ–Š‡•‡ —”‹–‹‡•‹••—‡†„›–Š‡‹••—‡”ǡ‘ƒ†ƒ‹Ž›„ƒ•‹•ǡ™Š‡”‡
–Š‡–ƒ–‡‘”–Š‡‡–”ƒŽ ‘˜‡”‡–‹•–Š‡‹••—‡”‘ˆ ‘˜‡”‡–•‡ —”‹–‹‡•ǡ–Š‡†‡’‘•‹–‘”›•ŠƒŽŽǡ‘ƒ†ƒ‹Ž›„ƒ•‹•ǡ
”‡ ‘ ‹Ž‡–Š‡”‡ ‘”†•‘ˆ–Š‡†‡ƒ–‡”‹ƒŽ‹•‡†•‡ —”‹–‹‡•Ǥ

AUDIT UNDER SEBI (DEPOSITORIES AND PARTICIPANTS) REGULATIONS, 2018

‡‰—Žƒ–‹‘͹͸‘ˆ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺ’”‘˜‹†‡•–Šƒ–‡˜‡”›‹••—‡”•ŠƒŽŽ•—„‹–
ƒ—†‹–”‡’‘”–‘ƒ“—ƒ”–‡”Ž›„ƒ•‹•–‘–Š‡ ‘ ‡”‡†•–‘ ‡š Šƒ‰‡•ƒ—†‹–‡†„›ƒ’”ƒ –‹•‹‰‘’ƒ›‡ ”‡–ƒ”›‘”ƒ
“—ƒŽ‹ϐ‹‡† Šƒ”–‡”‡†  ‘—–ƒ–ǡ ˆ‘” –Š‡ ’—”’‘•‡• ‘ˆ ”‡ ‘ ‹Ž‹ƒ–‹‘ ‘ˆ –Š‡ –‘–ƒŽ ‹••—‡† ƒ’‹–ƒŽǡ Ž‹•–‡† ƒ’‹–ƒŽ ƒ†
ƒ’‹–ƒŽŠ‡Ž†„›†‡’‘•‹–‘”‹‡•‹†‡ƒ–‡”‹ƒŽ‹œ‡†ˆ‘”ǡ–Š‡†‡–ƒ‹Ž•‘ˆ Šƒ‰‡•‹•Šƒ”‡ ƒ’‹–ƒŽ†—”‹‰–Š‡“—ƒ”–‡”ƒ†
–Š‡‹Ǧ’”‹ ‹’Ž‡ƒ’’”‘˜ƒŽ‘„–ƒ‹‡†„›–Š‡‹••—‡”ˆ”‘ƒŽŽ–Š‡•–‘ ‡š Šƒ‰‡•™Š‡”‡‹–‹•Ž‹•–‡†‹”‡•’‡ –‘ˆ•— Š
ˆ—”–Š‡”‹••—‡† ƒ’‹–ƒŽǤ
Š‡ƒ—†‹–”‡’‘”–‹•”‡“—‹”‡†–‘‰‹˜‡–Š‡—’†ƒ–‡†•–ƒ–—•‘ˆ–Š‡”‡‰‹•–‡”‘ˆ‡„‡”•‘ˆ–Š‡‹••—‡”ƒ† ‘ϐ‹”–Šƒ–
•‡ —”‹–‹‡•Šƒ˜‡„‡‡†‡ƒ–‡”‹ƒŽ‹œ‡†ƒ•’‡””‡“—‡•–•™‹–Š‹ʹͳ†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ”‡ ‡‹’–‘ˆ”‡“—‡•–•„›–Š‡‹••—‡”
ƒ†™Š‡”‡–Š‡†‡ƒ–‡”‹ƒŽ‹œƒ–‹‘Šƒ•‘–„‡‡‡ˆˆ‡ –‡†™‹–Š‹–Š‡•ƒ‹†•–‹’—Žƒ–‡†’‡”‹‘†ǡ–Š‡”‡’‘”–™‘—Ž††‹• Ž‘•‡
–Š‡”‡ƒ•‘•ˆ‘”•— Š†‡Žƒ›Ǥ
Š‡‹••—‡”‹•—†‡”ƒ‘„Ž‹‰ƒ–‹‘–‘‹‡†‹ƒ–‡Ž›„”‹‰–‘–Š‡‘–‹ ‡‘ˆ–Š‡†‡’‘•‹–‘”‹‡•ƒ†–Š‡•–‘ ‡š Šƒ‰‡•ǡƒ›
†‹ˆˆ‡”‡ ‡‘„•‡”˜‡†‹‹–•‹••—‡†ǡŽ‹•–‡†ǡƒ†–Š‡ ƒ’‹–ƒŽŠ‡Ž†„›†‡’‘•‹–‘”‹‡•‹†‡ƒ–‡”‹ƒŽ‹œ‡†ˆ‘”Ǥ

INTERNAL AUDIT OF OPERATIONS OF DEPOSITORY PARTICIPANTS

Š‡ –™‘ ‡’‘•‹–‘”› •‡”˜‹ ‡ ’”‘˜‹†‡”• ‹ †‹ƒǡ ˜‹œǤǡ ƒ–‹‘ƒŽ ‡ —”‹–‹‡• ‡’‘•‹–‘”› –†Ǥ ȋȌ ƒ† ‡–”ƒŽ
Dep‘•‹–‘”›‡”˜‹ ‡•ȋ †‹ƒȌ‹‹–‡†ȋȌŠƒ˜‡ƒŽŽ‘™‡†‘’ƒ›‡ ”‡–ƒ”‹‡•‹™Š‘Ž‡Ǧ–‹‡’”ƒ –‹ ‡–‘ —†‡”–ƒ‡
‹–‡”ƒŽƒ—†‹–‘ˆ–Š‡‘’‡”ƒ–‹‘•‘ˆ‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–•ȋ•ȌǤ
ƒ‡†‡†‹–•›‡ƒ™ͳͲǤ͵Ǥͳ‘ˆŠƒ’–‡”ͳͲ™Ǥ‡ǤˆǤƒ” Šͳ͸ǡʹͲͲͻ™Š‹ Š”‡ƒ†•ƒ•ˆ‘ŽŽ‘™ǣ
ͳͲǤ͵ǤͳDz˜‡”›ƒ”–‹ ‹’ƒ–•ŠƒŽŽ‡•—”‡–Šƒ–ƒ‹–‡”ƒŽƒ—†‹–‹”‡•’‡ –‘ˆ‹–•†‡’‘•‹–‘”›‘’‡”ƒ–‹‘•‹• ‘†— –‡†
ƒ–‹–‡”˜ƒŽ•‘ˆ‘–‘”‡–Šƒ•‹š‘–Š•„›ƒ“—ƒŽ‹ϐ‹‡†Šƒ”–‡”‡† ‘—–ƒ–‘”ƒCompany Secretary or a
‘•–ƒ†ƒƒ‰‡‡– ‘—–ƒ–ǡŠ‘Ž†‹‰ƒ‡”–‹ϐ‹ ƒ–‡‘ˆ”ƒ –‹ ‡ƒ†ƒ ‘’›‘ˆ–Š‡‹–‡”ƒŽƒ—†‹–”‡’‘”–•ŠƒŽŽ
„‡ˆ—”‹•Š‡†–‘–Š‡‡’‘•‹–‘”›Ǥdz
Šƒ•˜‹†‡‹–•Ž‡––‡”†ƒ–‡†‡’–‡„‡”ʹͺǡͳͻͻͻ‘–‹ϐ‹‡†ƒ‡†‡–‘ˆ‹–•›‡ƒ™•ͳ͸Ǥ͵Ǥͳƒ•ˆ‘ŽŽ‘™•ǣ
ͳ͸Ǥ͵Ǥͳ˜‡”›’ƒ”–‹ ‹’ƒ–•ŠƒŽŽ‡•—”‡–Šƒ–ƒ‹–‡”ƒŽƒ—†‹–•ŠƒŽŽ„‡ ‘†— –‡†‹”‡•’‡ –‘ˆ–Š‡’ƒ”–‹ ‹’ƒ–ǯ•
‘’‡”ƒ–‹‘• ”‡Žƒ–‹‰ –‘  „› ƒ “—ƒŽ‹ϐ‹‡† Šƒ”–‡”‡†  ‘—–ƒ– ‹ ƒ ‘”†ƒ ‡ ™‹–Š –Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‡
Šƒ”–‡”‡†  ‘—–ƒ–•  –ǡ ͳͻͶͻǡ ‘” „› ƒ Company Secretary ‹ ƒ ‘”†ƒ ‡ ™‹–Š –Š‡ ’”‘˜‹•‹‘• ‘ˆ –Š‡
‘’ƒ›‡ ”‡–ƒ”‹‡• –ǡͳͻͺͲ‘”„›ƒ‘•– ‘—–ƒ–‹ƒ ‘”†ƒ ‡™‹–Š–Š‡’”‘˜‹•‹‘•‘ˆ–Š‡‘•–ƒ†
‘”• ‘—–ƒ–• –ǡͳͻͷͻǢ‹’”ƒ –‹ ‡ǡƒ–•— Š‹–‡”˜ƒŽ•ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„›ˆ”‘–‹‡–‘–‹‡Ǥ
‘’›‘ˆ –‡”ƒŽ—†‹–”‡’‘”–•ŠƒŽŽ„‡ˆ—”‹•Š‡†–‘Ǥ
Checklist of Internal Audit of Operations of Depository Participants
•  ‘—–‘’‡‹‰
Ȉ ‡’‘”–‹‰–‘•
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘‘ˆ‡ —”‹–‹‡•
Ȉ ‡ƒ–‡”‹ƒŽ‹•ƒ–‹‘‘ˆ‡ —”‹–‹‡•
Ȉ ƒ”‡–”ƒ†‡•
Ȉ ˆˆƒ”‡–”ƒ†‡•
Ȉ ”ƒ•‹••‹‘
• Returns to Depository
Ȉ ”‹‡˜ƒ ‡‡†”‡••ƒŽ‡ Šƒ‹•
 Lesson 3 • Depositories Act, 1996 91

Ȉ ‘ŽŽƒ–‡”ƒŽ‡ —”‹–›
Ȉ ••‹‰‡–‘ˆ—•‹‡••
Ȉ ”‡‡œ‹‰‘ˆ ‘—–
Ȉ Ž‘•—”‡‘ˆ ‘—–
Ȉ Ž‡†‰‡ƒ† ›’‘–Š‡ ƒ–‹‘
Ȉ ˜‘ ƒ–‹‘‘ˆŽ‡†‰‡Ȁ ›’‘–Š‡ ƒ–‹‘„›Ž‡†‰‡‡
Ȉ ‡†‹‰ƒ†‘””‘™‹‰‘ˆ‡ —”‹–‹‡•
• Records to be Maintained by DPs
Ȉ ‹• Ž‘•—”‡ƒ†—„Ž‹ ƒ–‹‘‘ˆ ˆ‘”ƒ–‹‘
Ȉ —’‡”˜‹•‹‘„›
Ȉ ‘†‡‘ˆ–Š‹ •ˆ‘”•
• Branch of Depository Participants

CONCURRENT AUDIT
ƒ–‹‘ƒŽ ‡ —”‹–‹‡• ‡’‘•‹–‘”› ‹‹–‡† ˜‹†‡ ‹–• ‹” —Žƒ” ‘Ǥ Ȁ Ȁ ʹͲͲ͸ȀͲͲʹͳ †ƒ–‡† —‡ ʹͶǡ ʹͲͲ͸
’”‘˜‹†‡•ˆ‘” ‘ —””‡–ƒ—†‹–‘ˆ–Š‡‡’‘•‹–‘”›ƒ”–‹ ‹’ƒ–•ǤŠ‡‹” —Žƒ”’”‘˜‹†‡•–Šƒ–™Ǥ‡ǤˆǤ—‰—•–ͳǡʹͲͲ͸ǡ–Š‡’”‘ ‡••
‘ˆ†‡ƒ–ƒ ‘—–‘’‡‹‰ǡ ‘–”‘Žƒ†˜‡”‹ϐ‹ ƒ–‹‘‘ˆ‡Ž‹˜‡”› •–”— –‹‘Ž‹’•ȋ Ȍ‹••—„Œ‡ ––‘‘ —””‡–—†‹–Ǥ
‡’‘•‹–‘”› ƒ”–‹ ‹’ƒ–• Šƒ˜‡ „‡‡ ƒ†˜‹•‡† –‘ ƒ’’‘‹– ƒ ϐ‹” ‘ˆ “—ƒŽ‹ϐ‹‡† Šƒ”–‡”‡†  ‘—–ƒ–ȋ•Ȍ ‘” Company
Secretary(ies)Š‘Ž†‹‰ƒ ‡”–‹ϐ‹ ƒ–‡‘ˆ’”ƒ –‹ ‡ˆ‘” ‘†— –‹‰–Š‡ ‘ —””‡–ƒ—†‹–Ǥ ‘™‡˜‡”ǡ–Š‡’ƒ”–‹ ‹’ƒ–•‹
ƒ•‡–Š‡›•‘†‡•‹”‡ǡƒ›‡–”—•––Š‡ ‘ —””‡–ƒ—†‹––‘–Š‡‹” –‡”ƒŽ—†‹–‘”•Ǥ ”‡•’‡ –‘ˆƒ ‘—–‘’‡‹‰ǡ–Š‡
ƒ—†‹–‘” •Š‘—Ž† ˜‡”‹ˆ› ƒŽŽ –Š‡ †‘ —‡–• ‹ Ž—†‹‰  †‘ —‡–• ˆ—”‹•Š‡† „› –Š‡ Ž‹‡–• ƒ† ˜‡”‹ϐ‹‡† „› –Š‡
‘ˆϐ‹ ‹ƒŽ•‘ˆ–Š‡ƒ”–‹ ‹’ƒ–•ǤŠ‡• ‘’‡‘ˆ ‘ —””‡–ƒ—†‹–™‹–Š”‡•’‡ ––‘ ‘–”‘Žƒ†˜‡”‹ϐ‹ ƒ–‹‘‘ˆ  ‘˜‡”–Š‡
ƒ”‡ƒ•‰‹˜‡„‡Ž‘™ǣ
(I) Issuance of DIS
TŠ‡’”‘ ‡†—”‡ˆ‘ŽŽ‘™‡†„›–Š‡’ƒ”–‹ ‹’ƒ–•™‹–Š”‡•’‡ ––‘ǣ
ȋƒȌ ••—ƒ ‡‘ˆ „‘‘Ž‡–•‹ Ž—†‹‰Ž‘‘•‡•Ž‹’•Ǥ
ȋ„Ȍ š‹•–‡ ‡‘ˆ ‘–”‘Ž•‘ ‹••—‡†–‘Ž‹‡–•‹ Ž—†‹‰’”‡Ǧ•–ƒ’‹‰‘ˆŽ‹‡– ƒ†—‹“—‡’”‡Ǧ’”‹–‡†
•‡”‹ƒŽ—„‡”•Ǥ
ȋ Ȍ ‡ ‘”†ƒ‹–‡ƒ ‡ˆ‘”‹••—ƒ ‡‘ˆ „‘‘Ž‡–•ȋ‹ Ž—†‹‰Ž‘‘•‡•Ž‹’•Ȍ‹–Š‡„ƒ ‘ˆϐ‹ ‡Ǥ

ȋ Ȍ ‡”‹ϐ‹ ƒ–‹‘‘ˆ 

The ’”‘ ‡†—”‡ˆ‘ŽŽ‘™‡†„›–Š‡ƒ”–‹ ‹’ƒ–•™‹–Š”‡•’‡ ––‘ǣ
ȋƒȌ ƒ–‡ƒ†–‹‡•–ƒ’‹‰ȋ‹ Ž—†‹‰Žƒ–‡•–ƒ’‹‰Ȍ‘‹•–”— –‹‘•Ž‹’•Ǥ
ȋ„Ȍ Ž‘ ‹‰‘ˆ—•‡†Ȁ”‡’‘”–‡†Ž‘•–Ȁ•–‘Ž‡‹•–”— –‹‘•Ž‹’•‹„ƒ ‘ˆϐ‹ ‡•›•–‡Ȁƒ—ƒŽ”‡ ‘”†Ǥ
ȋ Ȍ Ž‘ ‹‰‘ˆ•Ž‹’•‹–Š‡„ƒ ‘ˆϐ‹ ‡•›•–‡Ȁƒ—ƒŽ”‡ ‘”†™Š‹ Šƒ”‡‡š‡ —–‡†‹†‹”‡ –Ž›Ǥ
ȋ†Ȍ ™‘•–‡’˜‡”‹ϐ‹ ƒ–‹‘ˆ‘”ƒ–”ƒ•ƒ –‹‘ˆ‘”‘”‡–Šƒ•ǤͷŽƒŠǡ‡•’‡ ‹ƒŽŽ›‹ ƒ•‡‘ˆ‘ˆˆ–”ƒ•ƒ –‹‘•Ǥ
ȋ‡Ȍ •–”— –‹‘•”‡ ‡‹˜‡†ˆ”‘†‘”ƒ–ƒ ‘—–•Ǥ
Š‡‘ —””‡–—†‹–‘”•Š‘—Ž† ‘†— ––Š‡ƒ—†‹–‹”‡•’‡ –‘ˆƒŽŽƒ ‘—–•‘’‡‡†ǡ ‹••—‡†ƒ† ‘–”‘Ž•‘ 
ƒ•‡–‹‘‡†ƒ„‘˜‡ǡ†—”‹‰–Š‡†ƒ›ǡ„›–Š‡‡š–™‘”‹‰†ƒ›Ǥ  ƒ•‡–Š‡ƒ—†‹– ‘—Ž†‘–„‡ ‘’Ž‡–‡†™‹–Š‹–Š‡
‡š–™‘”‹‰†ƒ›†—‡–‘Žƒ”‰‡˜‘Ž—‡ǡ–Š‡ƒ—†‹–‘”•Š‘—Ž†‡•—”‡–Šƒ––Š‡ƒ—†‹–‹• ‘’Ž‡–‡†™‹–Š‹ƒ™‡‡ǯ•–‹‡Ǥ
›†‡˜‹ƒ–‹‘ƒ†Ȁ‘”‘Ǧ ‘’Ž‹ƒ ‡‘„•‡”˜‡†‹–Š‡ƒˆ‘”‡•ƒ‹†ƒ”‡ƒ••Š‘—Ž†„‡‡–‹‘‡†‹–Š‡ƒ—†‹–”‡’‘”–‘ˆ
–Š‡ ‘ —””‡– —†‹–‘”Ǥ Š‡ ƒƒ‰‡‡– ‘ˆ –Š‡ ƒ”–‹ ‹’ƒ– •Š‘—Ž† ‘‡– ‘ –Š‡ ‘„•‡”˜ƒ–‹‘• ƒ†‡ „› –Š‡
‘ —””‡–—†‹–‘”ǤŠ‡‘ —””‡–—†‹–‡’‘”–•Š‘—Ž†„‡•—„‹––‡†–‘ǡ‘ƒ“—ƒ”–‡”Ž›„ƒ•‹•ǡ‹ƒŠƒ”† ‘’›
ˆ‘”Ǥ ˆ–Š‡—†‹–‘”ˆ‘” –‡”ƒŽƒ†‘ —””‡–—†‹–‹•–Š‡•ƒ‡ǡ ‘•‘Ž‹†ƒ–‡†”‡’‘”–ƒ›„‡•—„‹––‡†Ǥ
 92 Lesson 3 • EP-SLCM

ROLE OF COMPANY SECRETARY

• Right to Legal Representation (Section 23C):  ƒ•‡‘ˆƒ›†‡ ‹•‹‘‘ˆ–Š‡ ǡ–Š‡ƒ‰‰”‹‡˜‡†‡–‹–›Ȁ

‘’ƒ›ȋ–Š‡ƒ’’‡ŽŽƒ–Ȍƒ›‡‹–Š‡”ƒ’’‡ƒ”‹’‡”•‘‘”ƒ—–Š‘”‹•‡‘‡‘”‘”‡ Šƒ”–‡”‡†ƒ ‘—–ƒ–•‘”
‘’ƒ›•‡ ”‡–ƒ”‹‡•ȋȌ‘” ‘•–ƒ ‘—–ƒ–•‘”Ž‡‰ƒŽ’”ƒ –‹–‹‘‡”•‘”ƒ›‘ˆ‹–•‘ˆϐ‹ ‡”•–‘’”‡•‡–Š‹•‘”‹–•
ƒ•‡„‡ˆ‘”‡–Š‡‡ —”‹–‹‡•’’‡ŽŽƒ–‡”‹„—ƒŽȋȌǤ
• Internal Audit of Depository Participants: Š‡ʹȋ–™‘Ȍ‡’‘•‹–‘”›•‡”˜‹ ‡•’”‘˜‹†‡”•‹ †‹ƒǡ˜‹œǤǡƒ–‹‘ƒŽ
‡ —”‹–‹‡• ‡’‘•‹–‘”› –†Ǥ ȋȌ ƒ† ‡–”ƒŽ ‡’‘•‹–‘”› ‡”˜‹ ‡• ȋ †‹ƒȌ ‹‹–‡† ȋȌ Šƒ˜‡ ƒŽŽ‘™‡†
‘’ƒ› ‡ ”‡–ƒ”‹‡• ‹ ™Š‘Ž‡Ǧ–‹‡ ’”ƒ –‹ ‡ –‘ —†‡”–ƒ‡ ‹–‡”ƒŽ ƒ—†‹– ‘ˆ –Š‡ ‘’‡”ƒ–‹‘• ‘ˆ ‡’‘•‹–‘”›
ƒ”–‹ ‹’ƒ–•ȋ•ȌǤ
• Reconciliation of Share Capital Audit: ‘’ƒ›‡ ”‡–ƒ”›‹•ƒ—–Š‘”‹•‡†–‘‹••—‡“—ƒ”–‡”Ž› ‡”–‹ϐ‹ ƒ–‡™‹–Š
”‡‰ƒ”† –‘ ”‡ ‘ ‹Ž‹ƒ–‹‘ ‘ˆ –Š‡ –‘–ƒŽ ‹••—‡† ƒ’‹–ƒŽǡ Ž‹•–‡† ƒ’‹–ƒŽ ƒ† ƒ’‹–ƒŽ Š‡Ž† „› †‡’‘•‹–‘”‹‡• ‹
†‡ƒ–‡”‹ƒŽ‹œ‡†ˆ‘”ǡ†‡–ƒ‹Ž•‘ˆ Šƒ‰‡•‹•Šƒ”‡ ƒ’‹–ƒŽ†—”‹‰–Š‡“—ƒ”–‡”ǡƒ†‹Ǧ’”‹ ‹’Ž‡ƒ’’”‘˜ƒŽ‘„–ƒ‹‡†
„›–Š‡‹••—‡”ˆ”‘ƒŽŽ–Š‡•–‘ ‡š Šƒ‰‡•™Š‡”‡‹–‹•Ž‹•–‡†‹”‡•’‡ –‘ˆ •— Šˆ—”–Š‡”‹••—‡† ƒ’‹–ƒŽ—†‡”
 ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͺǤȏ‡‰—Žƒ–‹‘ ͹͸‘ˆ ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ
‡‰—Žƒ–‹‘•ǡʹͲͳͺȐ
• Concurrent Audit of Depository Participants: ”ƒ –‹•‹‰ ‘’ƒ› ‡ ”‡–ƒ”› ‹• ƒ—–Š‘”‹œ‡† –‘ ƒ””› ‘—–
‘ —””‡– ƒ—†‹– ‘ˆ ‡’‘•‹–‘”› ƒ”–‹ ‹’ƒ–• ™Š‹ Š ‘˜‡”• ƒ—†‹– ‘ˆ –Š‡ ’”‘ ‡•• ‘ˆ †‡‹– ƒ ‘—– ‘’‡‹‰ǡ
‘–”‘Žƒ†˜‡”‹ϐ‹ ƒ–‹‘‘ˆ‡Ž‹˜‡”› •–”— –‹‘Ž‹’•ȋ ȌǤ

CASE LAW
͵ͳǤͲ͵ǤʹͲʹͲ Jaypee Capital Services Ltd (Noticee) vs. SEBI Š‘Ž‡ ‹‡ ‡„‡”ǡ ‡ —”‹–‹‡• ƒ†
š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒ
Facts of the Case
‡ —”‹–‹‡•ƒ†š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒȋŠ‡”‡‹ƒˆ–‡””‡ˆ‡””‡†–‘ƒ•Ǯ ǯȌ‰”ƒ–‡†ƒ‡”–‹ϐ‹ ƒ–‡‘ˆ‡‰‹•–”ƒ–‹‘ƒ•
ƒ ‡’‘•‹–‘”› ƒ”–‹ ‹’ƒ– –‘ ƒ›’‡‡ ƒ’‹–ƒŽ ‡”˜‹ ‡• ‹‹–‡† ȋ Ȁ‘–‹ ‡‡Ȍ ‹ ƒ ‘”†ƒ ‡ ™‹–Š ’”‘˜‹•‹‘• ‘ˆ
 ȋ‡’‘•‹–‘”‹‡•ƒ†ƒ”–‹ ‹’ƒ–•Ȍ‡‰—Žƒ–‹‘•ǡͳͻͻ͸ȋ‡‰—Žƒ–‹‘•Ȍ‹‹–‹ƒŽŽ›ˆ‘”ƒ’‡”‹‘†‘ˆϐ‹˜‡›‡ƒ”•™Š‹ Š
™ƒ•˜ƒŽ‹†ˆ”‘—‰—•–ͳͳǡʹͲͲ͸–‘—‰—•–ͳͲǡʹͲͳͳǤŠ‡ ‡”–‹ϐ‹ ƒ–‡‘ˆ”‡‰‹•–”ƒ–‹‘™ƒ•ǡ–Š‡”‡ƒˆ–‡”ǡ”‡‡™‡†‹
ʹͲͳͳˆ‘”ƒˆ—”–Š‡”’‡”‹‘†‘ˆϐ‹˜‡›‡ƒ”•ƒ†–Š‡”‡‡™‡† ‡”–‹ϐ‹ ƒ–‡™ƒ•˜ƒŽ‹†–‹ŽŽ—‰—•–ͳͲǡʹͲͳ͸Ǥ
 ”‡ ‡‹˜‡†ƒŽ‡––‡”†ƒ–‡†’”‹ŽͲͷǡʹͲͳ͸ˆ”‘‡–”ƒŽ‡’‘•‹–‘”›‡”˜‹ ‡•ȋ †‹ƒȌ‹‹–‡†ȋŠ‡”‡‹ƒˆ–‡”
”‡ˆ‡””‡†–‘ƒ•ǮǯȌ‹ˆ‘”‹‰–Šƒ–‹–Šƒ•–‡”‹ƒ–‡†–Š‡ƒ‰”‡‡‡–™‹–Š–Š‡‘–‹ ‡‡™Ǥ‡Ǥˆ’”‹ŽͲͶǡʹͲͳ͸
†—‡ –‘ ‘Ǧ ‘’Ž‹ƒ ‡ ‘ –Š‡ ’ƒ”– ‘ˆ  ™‹–Š –Š‡ „›‡ǦŽƒ™• ‘ˆ Ǥ  ˜‹†‡ –Š‡ •ƒ‹† Ž‡––‡” ƒŽ•‘
”‡“—‡•–‡†   –‘ ƒ ‡Ž –Š‡ ‡”–‹ˆ‹ ƒ–‡ ‘ˆ ”‡‰‹•–”ƒ–‹‘ ‰”ƒ–‡† –‘ –Š‡ ‘–‹ ‡‡ ƒ– ƒ – ƒ• ƒ ‡’‘•‹–‘”›
ƒ”–‹ ‹’ƒ– ™‹–Š ‹‡†‹ƒ–‡ ‡ˆˆ‡ –Ǥ Š‡”‡ƒˆ–‡”ǡ ƒ–‹‘ƒŽ ‡ —”‹–‹‡• ‡’‘•‹–‘”‹‡• ‹‹–‡† ȋŠ‡”‡‹ƒˆ–‡”
”‡ˆ‡””‡†–‘ƒ• DzdzȌ˜‹†‡‹–• Ž‡––‡”†ƒ–‡†’”‹Ž ʹʹǡʹͲͳ͸‹ˆ‘”‡†  –Šƒ– ‹– Šƒ•ƒŽ•‘ –‡”‹ƒ–‡†–Š‡
ƒ‰”‡‡‡–™‹–Š ™Ǥ‡Ǥˆƒ›ʹ͵ǡʹͲͳ͸†—‡–‘–Š‡‘Ǧ ‘’Ž‹ƒ ‡‘’ƒ”–‘ˆ ™‹–Š–Š‡˜ƒ”‹‘—•„›‡Ǧ
Žƒ™•‘ˆǤ
ƒ•‡†‘–Š‡‹ˆ‘”ƒ–‹‘’”‘˜‹†‡†„›–Š‡‡’‘•‹–‘”‹‡•˜‹œǤƒ†ǡƒ•ƒ„‘˜‡ǡ‹–™ƒ•ƒŽŽ‡‰‡†–Šƒ––Š‡
‘–‹ ‡‡™ƒ•‘Ž‘‰‡”‡Ž‹‰‹„Ž‡–‘„‡ƒ†‹––‡†ƒ•ƒ’ƒ”–‹ ‹’ƒ–‘ˆ†‡’‘•‹–‘”›ƒ†Šƒ†ˆƒ‹Ž‡†–‘‹ˆ‘” ƒ„‘—–
–Š‡–‡”‹ƒ–‹‘‘ˆ‹–•ƒ‰”‡‡‡–•™‹–Šƒ†Ǥ
Order
Š‡ˆƒ‹Ž—”‡‘–Š‡’ƒ”–‘ˆ–Š‡‘–‹ ‡‡–‘‹ˆ‘” ‘ˆ–Š‡–‡”‹ƒ–‹‘‘ˆ–Š‡ƒ‰”‡‡‡–„›–Š‡†‡’‘•‹–‘”‹‡•
™‘—Ž†Šƒ˜‡–‘„‡ ‘•‹†‡”‡†ƒ•ƒ˜‹‘Žƒ–‹‘‘ˆŽƒ—•‡ͳͶ‘ˆ–Š‡‘†‡‘ˆ‘†— –ˆ‘”–Š‡•Ǥ
 ǡ‹‡š‡” ‹•‡‘ˆ’‘™‡”• ‘ˆ‡””‡†—†‡”‡ –‹‘ͳͻ‘ˆ–Š‡‡ —”‹–‹‡•ƒ†š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒ –ǡͳͻͻʹ
”‡ƒ† ™‹–Š ‡‰—Žƒ–‹‘ ʹͺȋʹȌ ‘ˆ –Š‡   ȋ –‡”‡†‹ƒ”‹‡•Ȍ ‡‰—Žƒ–‹‘•ǡ ʹͲͲͺǡ ƒ ‡ŽŽ‡† –Š‡ ‡”–‹ϐ‹ ƒ–‡ ‘ˆ
”‡‰‹•–”ƒ–‹‘ ‰”ƒ–‡† –‘ –Š‡ ‘–‹ ‡‡ Ȁ ƒ›’‡‡ ƒ’‹–ƒŽ ‡”˜‹ ‡• ‹‹–‡† ȋ  ‡‰‹•–”ƒ–‹‘ ‘Ǥ ǦǦ
ǦʹͻͳǦʹͲͲͺȀ ǦǦǦ͵͸ͺǦʹͲͲ͸Ȍ™‹–Š‹‡†‹ƒ–‡‡ˆˆ‡ –Ǥ