Meaning:company formed and registered under the companies act 1956 and which has been granted a certificate of registration under section 12 (1A) of SEBI

Place where something is deposited for safe keeping Which hold securities of a share holder in an electronic form and facilitates the transfer of ownership of securities on settlement dates Paper work to electronic form

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For healthy growth of capital market Increased volume of transactions To increase foreign investment To solve problems associated with dealing in physical shares  Problems of theft, fake transfers  Share transfer delays due to signature mismatches  Paper work involved in buying, selling and transfer leading to costs of handling, storage, transportation  Delay in receipt of original & duplicate securities  Lack of storage facilities

Difference between a Demat Share & a Physical Share

◦ Immediate allotment ,transfer and registration of securities
◦ No stamp duty on transfer of securities ◦ Elimination of risk associated with certificates ◦ Reduction in paper work and transaction work ◦ Decrease in settlement risk and fraud ◦ Loan against the pledged demat shares at low cost ◦ Increasing the liquidity of stocks

◦ Increasing investor confidence
◦ Economic benefits ◦ Shorter settlement cycles

◦ Opening an Account
◦ Dematerialization ◦ Rematerialisation ◦ Distributing Dividend ◦ Closing an Account

The NSDL promoted by the IDBI, UTI, NSE & SBI was registered on 7 June 1996, with SEBI & commenced operations in November 1996. The NSDL is a public limited company with a paid up capital of 105 crore. No. Of DPs 245 & 3211 service centers across country Functions:    

Maintains investors holdings in electronic form Effects settlement of securities traded on exchange Transfer of securities Pledging of dematerialized securities Receipt of non-cash corporate benefits in electronic form

1.Maintenance of beneficial holdings through DPs
2.Dematerialization 3.Trading and settlement in dematerialized securities 4.Receipt of allotment in demat form 5.Receipt of corporate benefits 6.Rematerialisation 7.Pledging facilities 8.Freezing/locking of an Investors’ Account 9.Market trade (Sale of securities) 10.Market trade (Purchase of securities) 11.Off-market trades

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The CDSL is the second depository set up by the Bombay Stock Exchange & co-sponsored by the SBI, BOI, BOB, HDFC. The BSE has a 45% stake in the CDSL while the banks have a 55% stake. The CDSL commenced operation on 22 March 1999 The CDSL has 372 DPs in 124 cities across 269 location covering 320 cities with a net worth of Rs104 crore

The objectives of this depository are: 

To accelerate growth of scrip less trading To create a competitive environment which will be responsive to users’ interests & demands To enhance liquidity

Centralised Database & Accounting
◦ To give real time information ◦ To monitor holdings Indemnification & Insurance CDSL link up with NSDL.

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Services offered:   

Dematerialisation of existing scrips
Dematerialisation of new issues Reliable & efficient settlements Corporate actions

A custodian is an intermediary which helps register and safeguard the securities of its clients Custodian also provides ancillary such as physical transfers of share certificates , collecting dividends, interests warrant & conforming to transfer regulations To claim benefits on behalf of its clients a custodian keeps track of book closures, record dates, bonus and rights shares. For rendering these services, custodian charge a fee of one percent of the total volume of transaction Custodian provide the infrastructure facilities which ease the postissue, post-trade and settlement work The SHCIL is the leading custodian with 75% market share. Other banks like Canara bank & Indian bank have promoted Canbank Computer Services and India Clearing & Depository Services Limited (ICDS) At present there are 12 registered Custodians in India