simple security market bases shit...

1. An overview
of SEBI
regulations
on the DPs.
(Depository
Participants)
By- Abhishek Kishan
(CUSB1813125004)

2. Introduction to the Depository
system in India

3. Constituents
of
Depository
system
The
Depositories
Issuer
Company
Beneficial
owners
Depository
participants

5. Legal Framework and SEBI
Regulations of depository system in
India

6.  The transactions in the security
market through the depositories
and participants operations are
regulated under following
Statutes;
1. The Depositories Act, 1996.
2. The SEBI (Depositories &
Participants) Regulation 1996
and 2018.
3. The Depositories By-Laws.
4. Other laws such as The
Company Laws, The Security
Contract (Regulation) Act,
1956, The SEBI ACT 1992.

7. Concept of ‘Beneficial Owner’
This Photo by Unknown Author is licensed under CC BY

8.  The investor whose
securities are held in
electronic form in a de-mat
account opened with a
depository through a
Depository Participant is
called as ‘Beneficial Owner’
(BO).
 All the benefits as a result
of the holding the
securities are given to such
beneficial owner.

10.  Under Section 35 of the SEBI (Depository & Participants) Regulation (Amended) 2018
the following institutions can become a DP.
1. Public Financial Institutions.
2. Scheduled Banks including Foreign Banks approved by the Reserve Bank of India (RBI).
3. State Financial Corporation established under the State Financial Corporations Act, 1951.
4. Institutions engaged in granting financial services, promoted by the entities mentioned above,
jointly or severally.
5. Custodian of Securities who is granted Certificate of Registration under the SEBI Act, 1992.
6. Clearing House or Clearing Corporation of a Stock Exchange.
7. Stock Broker who is granted Certificate of Registration under the SEBI Act, 1992.
8. Non-Banking Financial Company having a net worth of not less than Rs.50 lakh.
9. Registrar of Issue and Transfer Agents who have a minimum net worth of Rs.10 crore.
 Apart from the above eligibility criteria, the NSDL and CDSL have also added certain eligibility
criteria to be registered as DP under them. The NSDL and CDSL are empowered to set their
own eligibility criteria in their Bye-Laws.

11.  Section 12 of SEBI Act 1992 (1)
Mandates for DPs to obtained the
registration certificates from the board
before commencement of the business.
This section also empowers the board to
suspend or cancel a COR of found
under contravention to the regulations,
in prescribed manner.

12.  Section 32 of SEBI
Regulation,1996 deals with
the procedure of application
for obtaining the registration
certificate by the wherein the
applicant got to choose the
depository and submit the
application form to the board
through the respective
depository.
 This Section also confers a
legal recognition to the
Bye- laws of the
depositories.
This Photo by Unknown Author is licensed under CC BY

13.  Under Section 33 such
application may be rejected upon
the basis of ;
1)Incomplete information furnished ,
2)Does not conform to the instructions
specified therein,
The proviso clause of this section
provides a room of 30 days in written to
the applicant in order to comply with the
objections placed by the board
thereupon.
Such time limit can be further extended
if the board feels it suitable in order to
allow necessary amendments in the
applications
This Photo by Unknown Author is licensed under CC BY-NC

14.  Further Section 55 of the
2018 Regulation call for the
co-operation between the
depositories and the entities.
This section holds a
significant place because it
mention the whole
depositories system which
includes;
1. Beneficial owner, 2. Issuer &
their Agents, 3. Custodian of
securities, 4. Clearing houses,
5. Other depositories.
The section objects to ensure
prompt, effective and accurate
clearance and settlement
process.

15.  Section 58 discusses that
Every participant shall
enter into an agreement
with a beneficial owner
before acting as a
participant on his behalf,
in a manner specified by
the depository in its bye-
laws.
This Photo by Unknown Author is licensed under CC BY-SA

16.  Section 59 as a safety measure
mandates the DPs to maintain
separate accounts for each
beneficial owner and shall remain
vigilant of misappropriation of the
securities which might occurred if
the accounts statements are not
segregated. Further in this regard
section conveys that every entry in
the beneficial owner’s account shall
be supported by electronic
instructions or any other mode of
instruction received from the
beneficial owner in accordance with
the agreement with the beneficial
owner.

17.  Section 60 mandates that every
participant shall provide statements
of account to the beneficial owner
in such form and in such manner
and at such time as provided in the
agreement with the beneficial
owner. Refer to the specimen of
statement in next slide.
Note; The depositories are also
obligated to furnish the account
statements of the beneficial owners to
the Income-Tax dept.

19. A project assigned by
Dr. Kumari Nitu Ma’am
Faculty of Financial Market
Regulations
Thankyou for being
patient.