The depository system is the process that facilitates the transfer of ownership of securities that are stored in dematerialized form in the depositories in the stock market.

1. What Is Depository System And Its
Functions In Indian Stock Market ?

2. Table of Content
● What is a Depository?
● Features of depository
● Depositories in India
● Differences between NSDL and CDSL
● What is Depository System?
● Role of depository participants in the
depository system
● What is a Global Depository Receipt?
● What is an Indian Depository Receipt?
● Conclusion

3. Introduction
Capital market is a place where IPO are listed
and the buying and selling shares of the company
take place. capital market divided into 2 types :
primary and secondary market.
Primary Market is the place where IPO of the get
listed.
Secondary Market:It is place where stocks are
being issued for the first time. And it is the place
where listed stocks are buy and sell.

4. What is Depository? The depository is the Apek Organisation in the
stock market and a unit of the Depository system.
The depository is similar to a bank where the
public deposit and withdraw their money. In the
same manner, a depository is a place where an
investor or trader deposits and withdrawal their
shares in a depository.
Depositories in India
In India, there are mainly two Depositories which
are Central Depository Services Limited(CDSL) and
National Securities Depository Limited(NSDL).
Know in Detail the two Depositories and the
difference between NSDL and CDSL

5. Features of Depository ● A Depository system is an institution that
holds securities.
● In the stock market, depository participants
are the medium through which Depositories
interact with the Investors.
● Depository Participants are required SEBI's
certificate to offer their services.
● Depositories also help DPs to control the
electronic transfer of securities and
settlement of transactions.
● Depositories issue receipts of bonus shares
in an electronic form.
● A Depository in the stock market offers a
nomination facility in the Demat account.
● Depositories can hypothecate
dematerialized securities against bank
loans.

6. Stock market where the buying and selling of
shares are done. whereas all the shares of
registered companies are held in the
dematerialized(electronic) form in the
depositories. A depository system is the process
of allotment and transfer of securities in
electronic form.
In the depository system, the depository is the
apex body which can be compared to putting
money in the bank and facilitating the transfer of
ownership with the help of simple account
transfers. It is a paper-free method of transfer of
shares that does away with all the hassles and
risks associated with the transfer of certificates.
You also need to know what is depository
participant and its role Depository System
What is Depository
System?

7. What is an Indian
Depository
Receipt?
Indian depository receipt is the Indian replica of
the Global depository receipt. An Indian
depository receipt is a financial instrument
through which foreign companies can get listed
on the Indian stock exchange and Indian investors
can take advantage of the global competitive
companies.
You also need to know what is global depository
receipt

8. Conclusion In the past, shares were bought and sold in
physical form. There were operational challenges
such as loss and theft of share certificates,
therefore to overcome such issues, shares were
stored in the dematerialized form to ensure
convenience. The capital market and the
depositories are regulated by SEBI.
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