A depository participant (DP) acts as an intermediary between investors and depositories, facilitating services such as opening demat accounts and transferring securities. They must obtain registration from the Securities and Exchange Board of India (SEBI) and can include entities like banks, financial institutions, and stockbrokers. The main functions of a DP include eliminating the risks of physical securities, providing loans, and streamlining securities transfer processes.

1. DEPOSITORY
PARTICIPANT

2. DEFINITION
A Depository Participant (DP) is described as an Agent
of the depository. They are the intermediaries between the
depository and the investors. A depository can be an organization,
bank, or institution that holds securities and assists in the trading of
securities. The relationship between the DPs and the depository is
governed by an agreement made between the two under the
Depositories Act. Depository Participant provide services for
opening demat account to the investor.
As per the provisions of the act, under the sub section 1A of
Section 12 of the SEBI Act, a DP can offer depository-related
services only after obtaining a certificate of registration from SEBI.
The two major depositories in India are National Securities
Depository Ltd (NSDL) and Central Securities Depository Ltd
(CDSL).

3. Depository Participant
Investor Depository
Under Depositories Act
1996

4. WHO CAN BE A DEPOSITORY
PARTICIPANT?
• Financial Institutions
• Banks including Approved Foreign Banks
• A clearing house of the stock exchange
• A non-banking financial company
• Stockbrokers
• A registrar to an issue or share transfer agent

5. FUNCTIONS OF DEPOSITORY PARTICIPANT:
Investors' account opening
DPs helps to open a demat account, to trade securities in stock
exchange
Serves as a link between depositories and
investors/shareholders
The agents are responsible for transferring the securities from the
depositories to the investors. A depository participant can be a bank, an
institution, or a brokerage.
Eliminates risk related to owning physical financial securities
A depository allows traders and investors to hold securities in
dematerialized form; thus, eliminating the risk related to holding physical
financial securities. The buyers and sellers now do not need to check
whether the securities have been transferred successfully without any loss

6. Allows the provision of loans of mortgages to interested parties
A depository holds the securities of customers and gives them back when the
customers want. The customers receive interest on the deposits, while the
depository earns even more interest by lending the deposits to other people or
businesses in the form of loans or mortgages.
Reduced paperwork and accelerates the process of transferring
securities
When a trade occurs, a depository transfers the ownership of securities from
the account of one investor to another. It helps in reducing the paperwork
associated with the finalization of a trade and accelerates the process of transfer
of securities.

7. DIFFERENCE
DEPOSITORY
• They provide demat account
services and shares are stored in
electronic form.
• Two main Indian Depositories
 NSDL
 CDSL
• Direct client interaction will not
happen
DEPOSITARY
PARTICIPANT
• The primary role of the DPs are they
help to open demat account to trade
securities in dematerialized form.
• Any institutional body that follows
SEBI guidelines can be a depository
participant.
• The exists a direct interaction with
clients

8. Thank you
By
20BCC049
SOFIYA U