This topic is very important under SEBI Act,1992

1. Depositories
In India, it is a relatively new concept
introduced in 1996 with the
enactment of depositories Act,1996.

2. Depository
• Their operations are carried out in accordance
with regulations made by SEBI, bye-laws and
rules of Depositories Act

3. Depository
• A “Depository” is a provider of facility for
holding securities.
• It is a kind of bank for securities like shares,
debentures,bonds etc.

4. Depositories
• According to Section 2(e) of the Depositories
Act, Depositories means a company formed
and registered under the Companies Act,2013
and which has been granted a certificate of
registration under section 12(1A) of the SEBI
Act,1992.
• It means adequate safeguards ,systems in
place should be there,hardware ,software etc
should be there to prevent the manipulation.

5. 2 Depositories in India
• National Securities Depository Limited(NSDL)
• It was registered by the SEBI on june 7,1996 as
India’s first Depository to facilitate trading and
settlement of securities in the demat form. It
is promoted by IDBI,UTI,NSE.

6. Central Depository services India
limited(CSDL)
• It commenced its operations during feb 1999
and was promoted by Stock Exchange
Mumbai(BSE) in association with Bank of
Baroda, Bank of India, SBI and HDFC Bank.

7. Depository System
• A depository is an organisation which holds
securities (like
shares,debentures,bonds,government
securities,mutual funds,units etc ) of investors in
electronic form at the request of the investors
through a registered depository
participant(DPs).At present two depository like
NSDL & CSDL.
• It is an organisation where the securities are held
in electronic form and carries out the transaction
by book entry.

8. Depository Participant
• Agent of the depository
• Intermediary between the depository and the
investors.
• Registered with SEBI.

9. DEPOSITORY PARTICIPANTS
The depository participant must possess
requisite qualifications prescribed by the
concerned depository of which he is a
participant.
He is responsible for maintaining Investors
securities a/c with the depository and handles
them as per the investors written instructions.
He is linked to a broker who trades on behlf of
investors.

10. Immobilisation (No mobilty)
• Any company going for public issue needs
needs the help of depository.
• The role of RTA, Jumbo certificate ,custodian
of securities ,depository, depository
participant.

11. Services of NSDL & CDSL
• Account Manintenance(open account with
DPs)
• Dematerialisation(converting in to electronic
balances)
• Rematerialisation(converting the electronic
into physical certificates)
• Inter –depository transfers
• Transmission

12. Rematerialization
• It is the process of converting securities held
in a electronic form in a demat account into a
paper form,i.e physical certificates. It is the
process of reconverting the securities in
physical form with the re-issue of share
certificates.

13. Benefits of DEMAT
• Bad deliveries due to signature difference
• Mistake in completion of transfer deeds
• Tearing and mutilation of securities
• Fake certificates
• Transfer stamp duty
• Extra consumption of time by the companies
• Postal delays and charges etc,

14. Benefits of availing depository system