Indian Financial System

1. K. Poojitha

3.  Online trading in Shares.
 Transfer by means of book entry.
 Accounts of Investors.


4. The
Depository
The
Depository
participant
The
Issuing
Company
The
Investor

5. 1,47,69,804
1,12,24,276
June
June
30, 2016
30, 2016

6. A DP is an agent of the Depository through which it
interfaces with the investor. A DP can offer depository
services only after it gets proper registration from
SEBI. Banking services can be availed through a
branch whereas depository services can be availed
through a DP.
At present two depositories viz NSDL and
CDSL are registered with SEBI. And the minimum Net
Worth required for a depository is Rs.100 crore.
As on 31/03/2005, total of 477 DPs are registered with SEBI.

7. In terms of Depositories Act,1996, SEBI Depositories &
Participants Regulations,1996, only the following
entities are eligible to become a Depository Participant.
 Public Financial Institution.
 Banks including Foreign Banks.
 State Financial Corporation.

8.  Depository.
 Depository Participant (DP).
 Securities, Issuers and Registrars and Share Transfer Agents,
 Stock Exchanges and Stock Brokers,
 Clearing Corporation/Clearing house and clearing members.
 Banking System.
 Investors.

12.  NSDL was established on 8 November 1996 as the first
electronic securities depository in India.
 It has established a National infrastructure using
International Standards that handles most of the securities
held and settles in dematerialized form in the Indian capital
Market.
 NSDL is promoted by Industrial Development Bank of
India (IDBI) and National Stock Exchange of India Ltd
(NSE) & specified undertaking of the Unit Trust of India
(SUUIT).
 NSDL had 1.50 crore investor accounts as per Sept 2016
analysis.

13.  CDSL was founded on February 1998.
 CDSL is the second Indian Central Securities Depository
based in Mumbai.
 Its main function is the holding securities either in
certificated or uncertificated dematerialized form, to enable
book entry transfer of securities.
 CDSL is promoted by BSE jointly with SBI, BOI, BOB,
SCB, Axis bank and Union Bank of India.
 CDSL had 1.15 crore incestor accounts as per sept 2016
analysis.

14.  It is the process by which physical
certificates of an investor are
converted to an equivalent number of
securities in electronic form and
credited into the investor’s account
with his/her DP.

15. As per the available statistics at BSE and NSE, 99.9%
settlement takes place in Demat mode only. Therefore, in
view of the convenience in settlement through demat
mode, it is advisable to have a beneficiary owner (BO)
account to trade at the exchanges.

17. 1
• Approach a DP and fill up account opening form
2
• Copies of POI and POA as specified by SEBI.
3
•Original documents for verification.
4
•Signing an agreement with DP.

18.  Protection of Investors’ Interest.
 Cash Corporate Benefits.
Investor must ensure that any subsequent change in Bank Account
details is informed to the DP. An investor can open more than one
account in the same name with the same DP and also with different
DPs.
If the address of the Investor changes he should immediately inform
his/her DP, who in turn will update the records. This will obviate the
need of informing different companies.

19.  “Transposition cum DEMAT form”.
 Joint Account on “either or survivor basis”..
 Power of Attorney in case of DEMAT Account..
 Addition and Deletion of names of accountholders.
 Transfer of securities from One DP account to
another.
 Charges for account closure and securities transfer.
 Freezing and Locking of Investors accounts.
 ISIN (International Securities Identification
Number).

20.  Surrender certificates of Dematerialisation to DP.
 DP intimates Depository of the request through the system.
 DP submits the certificates to the registrar of the Issuer
company.
 Registrar confirms the request from Depository and updates
accounts and informs depository.
 Depository updates its account and informs to DP.
 DP updates the DEMAT account of the investor.

21.  Dematerialisation of odd lot share certificates.
 Conversion of electronic holding into physical
certificates.
1
•Request for Rematerialisation
2
•Intimates depository through system
3
•Registrar updates accounts and prints certificates
4
•Depository updates accounts and downloads details to DP.
5
•Registrar dispatches certificates to Investor.

22.  In case of purchase.
 In case of sale.
 Standing Instruction.
 Delivery Instruction Slip.
 SPEED-e and EASI.

23.  Public Offering.
 Dividend/Interest (ECS).
 Non-cash Corporate benefits(Bonus etc).

24. 
1
•Pledgor and Pledgee must have
depository accounts with same
depository.
2
•Submission of details of the securities
to be pledged in a standard form.
3
•Confirming request through DP,
securities are pledged.

25.  Closure of Pledge after repayment of loan.
 Changing of securities offered in a pledge.
 Corporate benefits on pledged securities.

26.  Updating of Account.
 Frequency of receiving Transaction Statement.
 Discrepancies in Transaction Statement.
 Complaint/Problem/Query.

27.  Lending and borrowing between two persons.
 Process of lending securities.
 Getting back lent securities.
 Corporate benefits during period of lending.

28. Who can Nominate?
 Who can be a Nominee?

29.  Meaning.
 Death of Sole holder(TRF)-
(a) In case of death of sole holder where he appointed
a nominee.
(b) In case of death of sole holder who has not
appointed a nominee.
 Inter Depository Transfers.