1. Equity BasicsDepository

2. Depository
A depository is an organization where the securities of an investor are held in electronic form, at the request of the investor through the medium of a Depository Participant
If an investor wants to utilize the services offered by a depository, he has to open an account with the depository through its Depository Participant. This is similar to opening an account with any of the branches of a bank in order to utilize the services of that bank
3. What is dematerialization?
It is process of converting securities from physical form into electronic form
4. Who is a Depository Participant?
A Depository Participant (DP) is an agent of the depository and is authorized to offer depository services to investors
According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. can become DP with a depository
5. Who is a Depository Participant?
A DP is an interface between customers and the depository
A customer opens an account with a DP and commences operations
Balancesare maintained with the depository and are available through the DP
DP intimates customers status of holdings or transactions from time to time
6. Depositories in India
Central Depository Services (India) Limited
- Promoted by BSE, BoI, BoB, SBI andHDFC Bank
National Securities Depository Limited (NSDL)
- Promoted by UTI, IDBI and NSE
Securities and Exchange Board of India (SEBI) is the regulating authority
7. Depository: Bank - an analogy
Bank
Holds funds in accounts
Transfers funds between accounts
Transfers without handling cash
Safekeeping of money
Depository
Holds securities in accounts
Transfers securities in accounts
Transfers without handling physical securities
Safekeeping of securities
8. Services offered by a DP
Account Opening & Maintenance
Dematerialization of Securities
Rematerialization of Securities
Transfer of Securities
Pledging of Securities
9. Types of accounts
Beneficiary Account
These are ownership accounts, for use of Individuals, Corporates, HUFs etc
Pool Account
These are commercial accounts , for use of broker, for transfer of securities to and fro, from Exchange or Clearing Corporation
All the securities received in the pool account should be transferred to the respective beneficial accounts within 24 hrs
10. How are securities dematerialized?
Physical securities are to be submitted to DP, along with DRF
Each security certificate should be defaced by the client. Defacing of certificate to be done by putting a stamp Surrendered for Dematerialization
11. Demat Requisition Form
12. Dematerialization process
Client submits DRF and physical certificates to DP
DP intimates to depository and sends certificates with DRF to R&T agent
R&T agentconfirms dematerialization to depository
Depository credits securities to beneficial owner
Depository
Investor
DP
R & T Agent
13. Dematerialization Process
How many copies of DRF are made and who all get them?
3 Copies
Client / Account Holder
Depository participant
R & T agent
14. Trading and settlement
Market Trade
Trade done through a broker on the exchange. Has to be settled through the exchange
Off Market Trade
Trade done between two parties without the involvement of a broker. Has to be settled mutually between the two parties, shares moves from one account to another
15. Delivery Instruction Slip- NSDL
16. Delivery Instruction Slip- CDSL
17. Settlement of market trade
Seller gives delivery instructions to DP to move securities to brokers account
Securities are transferred to clearing corporation from brokers account
On pay out securities are moved from Clearing corporation to buying brokers account
Buying broker credits buyers account
Clearing Corporation
Broker
Broker
Buyer
Seller
18. Off market trade
Depository
Seller gives Delivery Instruction to his DP
Securities aretransferred from sellers DP to Buyers DP
Buyer gets credit automatically into his account
DP1
DP2
Buyer
Seller
19. Who can open a demat account?
Individuals, NRIs, Minors, HUFs, Trusts (Regd), Corporates can open demat account
Proprietary firms, partnership firms and unregistered trusts cannot open a demat account as the Companies Act,1956 prohibits these entities from becoming shareholders of companies
20. Basic documents for account opening
Registration form
Photograph/s with signatures across it
PAN Card
Proof of residence-Passport, Voters ID card, Driving license, Ration card
Proof of identity-Passport, Voters ID card, Driving license, PAN card
Bank Account Proof-Bank statement, cancelled cheque
21. Depository Charges
22. CDSL charges
23. NSDL charges
24. Thank You