The document discusses the challenges faced by investors in the depository system in India, including bad deliveries and delays in transfers. It outlines the legal framework, services offered by depositories, and compares the two major depositories, NSDL and CDSL. Additionally, it highlights the need for increased awareness and training among investors regarding the depository system.

1. PROBLEMS FACED BY INVESTORS
• Bad deliveries
• Fake certificates
• Loss of certificates in transit
• Mutilation of certificates
• Delays in transfer
• Long settlement cycles
• Mismatch of signatures
• Delay in refund and remission of dividend etc

2. DEPOSITORY SYSTEM
Presented By
Bismay Mishra
M. Com BF ‘A’
Regd No - 13351016

4. MEANING
• In India, the Depositories Act, 1996, defines a depository to mean “A company formed
and registered under the Companies Act, 1956 and which has been granted a certificate
of registration under sub-section (1A) of section 12 of the Securities and Exchange
Board of India Act,1992”.
• As per German Depository it is defined as “A Depository is a file or a set of files in which
data is stored for the purpose of safe keeping or identity authentication”.
• The term Depository means a place where a deposit of money, securities, property etc is
deposited for safekeeping under the terms of depository agreement
• A depository is an organisation, which assists in the allotment and transfer of securities
and securities lending.
• The shares here are held in the form of electronic accounts i.e. dematerialised form and
the depository system revolves around the concept of paper-less or scrip-less trading

6. LEGAL FRAMEWORK
• Depository Act in August, 1996- dematerialisation route to book entry based transfer of
securities and settlement of securities trade.
• ByeLaws:- scope of the functioning of NSDL and its business partners.
• Business Rules:- outline the operational procedures to be followed by NSDL and its Business
Partners
• SEBI(Depositories and Participant) (Amendment) Regulation, 2012:- Adoption of CODE
OF CONDUCT for its Directors and CODE OF ETHICS for Directors and Key
Management Personnel of NSDL to create better investor integrity of the market.
• The Companies Act, 1956

7. FACILITIES OFFERED BY DEPOSITORY
SYSTEM
• Opening of depository account
• Dematerialisation
• Rematerialisation
• Settlement of trades in dematerialised
securities
• Account transfer
• Transfer ,transmission and transposition
• Pledge and hypothecation
• Redemption or repurchase
• Stock lending and borrowing
• Corporate action
• Account freezing
• Nomination
• Demat of debt instruments
• Dealing in govt securities

8. CONSTITUENTS OF A DEPOSITORY SYSTEM
• Depository
• Depository Participant (DP)
• Issuers and Registrars and Share Transfer Agents
• Stock Exchanges and Stock Brokers
• Clearing Corporation/ Clearing House and Clearing Members
• Banking system
• Investors

9. DEPOSITORY SYSTEM-BUSINESS PARTNERS
Depository
Participants
A depository Participant is an
agent of the depository who is
authorized to offer depository
services to investors. Some of
them are Financial Institutions,
Banks, Custodians and
Stockbrokers complying with the
requirements prescribed by SEBI/
Depositories can be registered as
Depository Participant.
Issuing companies
and their Registrars
and Share Transfer
Agents
"Registrar to an Issue" means the
person appointed by a body corporate
or any person or group of persons to
carry on the following
collecting applications from investors
in respect of an issue;
Keeping a proper record of
applications and monies received
from investors or paid to the seller of
the securities. and
3)Assisting body corporate or person
or group of persons
Clearing
Corporations or
Clearing Houses of
Stock Exchanges
A clearing corporation is a
financial institution which
provides the services as
clearing and settlement for
commodities and financial
derivatives and securities
transactions.

10. SERVICES BY NSDL
Basic Services
• A/c Maintenance
• Dematerialisation
• Rematerialisation
• Market Transfers
• Off Market Transfers
• Inter-Depository Transfer
• Transmission/Nomination
• Corporate Action
Value Added Services
• Auto Delivery Out
• Dividend Distribution
• Lending & Borrowing
• Pledge
• Public Issue
• SMS Alert

11. SERVICES BY CDSL
• Account Opening
• Dematerialisation
• Processing Delivery & Receipt Instructions
• Account Statement
• Rematerialisation
• Pledging
• Nomination
• Transmission of Securities
• Change of Address
• Bank Account Details
• SMS

12. NSDL CDSL
DP
Entry Fee 25000
(non-refundable)
20000
(non-refundable)
Custody Fee Nil Nil
Pledge Fee 25 Pledge acceptance-12
Unpledged acceptance-12
Demat Charges Nil Nil
Remat Charges •a fee of Rs.10 for every hundred
securities or part thereof ; or
•a flat fee of Rs.10 per certificate,
whichever is higher.
No rematerialisation fee shall be
charged for Government Securities.
•10 (INR) for every 100 securities or
part thereof; subject to maximum fee
of 5,00,000 (INR) or
• a flat fee of 10 (INR) per certificate
whichever is higher.
COMPARISON OF CHARGES

13. COMPARISON BETWEEN NSDL & CDSL
BASIS NSDL CDSL
Abbreviation National Securities Depository
Limited
Central Depository Securities
Limited
Founded Nov 1996 Feb 1999
Headquarters Trade World, A wing, 4th & 5th
Floors,
Kamala Mills Compound,
Lower Parel, Mumbai-400013
Phiroze Jeejeebhoy Towers,
16th Floor, Dalal Street
Mumbai-400001
Promoters IDBI, UTI, NSE BoI, BoB, SBI, HDFC, BSE
Market NSE BSE

14. BENEFITS OF DEPOSITORY SYSTEM
Reduced workload & manpower requirements due to paperless settlement
Instantaneous transfer of ownership
No risk of damaged, lost, forged or duplicate certificates
No impact in case of sudden increase in settlement volumes
Instant credit of bonus, rights and new issues (IPO)
Convenient pledging of securities

15. Particulars NSDL CDSL
Investor Accounts 1 30,67,581 87,29,972
DP 279 580
Companies 12,013 14,349
DP Service Centers 14,428 11,639
Custody Quantity (In millions) 7,63,036 1,69,940
Custody Value(Rs in millions) 8,46,33,020 96,02,860
Equity 12,141 7,365
Others 10,596 6,683

16. CONCLUSION
• Depository system in India is suffering from awareness problem. people are not aware of
this system. People are not participating in this system. people are confused about these
two major depositories. There is a rivalry between these two depositories. Formulation
and promulgation of necessary laws –Depository has set of different challenges e.g.
authentication and non-repudiation of transaction should have legal backing, paperless
share holding etc. Lack of Developing a well trained Trainer & Support staff for giving
training and customer support to all the relevant parties.

17. REFERENCES
• www.nsdl.co.in
• www.cdslindia.com
• “Capital Market” by N Gopalsamy – Macmillan India Ltd, Delhi
• “Capital Markets” by Dr S Gurusamy - Vijay Nicole Imprints Private Limited, Chennai
• “Capital Markets” by Frank J. Fabozzi and Franco Modigliani – Prentice Hall of India pvt.
Ltd., New Delhi
• “Financial Market & Institutions” by Dr K. Venugopalan - Calicut University Central Co-
op Stores Ltd No 4347, Calicut University

18. THANK YOU