All About The Depository Participants In Simple Language

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

3. DEPOSITORY IN INDIA
• National Securities Depository Ltd. – NSDL
• Central Depository Services Ltd. - CDSL

4. DEPOSITORY PARTICIPANT
•Agent of the depository.
•Intermediary between the
depository and the
investors.
•Registered with SEBI.

5. CONT…
• Organization – holds securities for TRADING.
• Shares, Debentures,
Mutual Funds,
Derivatives and Commodities.

6. DEPOSITORY IN INDIA
• National Securities Depository Ltd. – NSDL
Having 95 lakh Demat A/c - 300 DPs in India
• Central Depository Services Ltd. - CDSL –
Having 65 lakh Demat A/c - 500 DPs in India

7. HOW DO DEPOSITORY OPERATE?
• Interacts with its investors.
• Through its agents, called Depository
Participants normally known as DPs.
• By opening Demat A/C WITH DPS
• Agreement to be made between the parties.

8. IMPORTANT POINTS
• Registered owner of Securities-
Physical certificates – INVESTOR
electronic form- DEPOSITORY
• Beneficial Owner (BO) - INVESTOR

10. SERVICES PROVIDED BY THE
DEPOSITORY
• Dematerialisation ( demat) - converting
physical certificates to electronic form
• Rematerialisation ( remat) is reverse of
demat.
• Transfer of securities, change of
ownership.

11. BENEFITS OF DEPOSITORY
• Immediate transfer of
shares
• No stamp duty on such
transfers
• Reduced transaction cost
• Transparency

12. BENEFITS (CONT…)
Elimination of risks - associated in dealing with
Physical certificates - loss / theft / forgery /etc.