NSDL CDSL
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Transcript of NSDL CDSL
04/11/2023 NSDL CDSL 1
Role and Functions of NSDL and CDSL
04/11/2023 NSDL CDSL 2
Table of Content
History………………………………………………………………………………………… 3
Introduction………………………………………………………………………………… 5
Legal framework………………………………………………………………………….. 7
Promoters……………………………………………………………………………………. 8
Role & Functions………………………………………………………………………….. 9
Management……………………………………………………………………………….. 10
Participant……………………………………………………………………………………. 12
Sources………………………………………………………………………………………….13
THANK YOU
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History
The first depository was set up way back in 1947 in Germany.
In India it is a relatively new concept introduced in 1996 with the enactment of Depositories Act 1996 .
Their operations are carried out in accordance with regulations made by SEBI ,bye-laws and rules of Depositories Act and SEBI (Depositories and Participants) Regulations Act 1996 .
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Before introduction of Depository system, the problems faced by investors and corporates in handling large volume of paper were as follows:
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
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INTRODUCTIONDepository : An organization that holds securities of investor in electronic format at the request of the investor through a registered Depository Participant.
Difference between Bank and Depository :
Bank Depository
Holds fund into an account. Holds securities into an account.
Transfer funds between accounts on the instruction of the account holder.
Transfer securities between accounts on the instruction of the account holder.
Facilitates transfers without having to handle money.
Facilitates transfers of ownership without having to handle securities.
Facilitates safe keeping of money.
Facilitates safe keeping of shares.
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OBJECTIVE
Reduce the time for transfer of securities. Avoid the risk of settlement of securities. Enhance liquidity and efficiency. Reduce cost of transaction for the investors. Create a system for the central handling of
all securities. Promote the country's competitiveness by
complying with global standards. Provide service infrastructure in a capital
market.
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ACTIVITIES
Accepting deposit of securities for custody. Making computerized book entry deliveries of
securities which are immobilized in its custody. Creating computerized book entry pledges of
securities in its custody. Providing for withdrawal of securities. Undertaking corporate actions like distribution of
dividend and interest. Redemption of securities on maturity.
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Benefits of availing depository services
o Safe & Convenient .o Immediate transfer of securities.o No stamp duty for transfer of securities.o Elimination of risk with physical certificates.o Reduction in paper work and transaction cost.o Change in address gets automatically updates with
all companies.o Automatic credit in demat accounts.
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PROCESS
o Fill in a Demat Request Form ( DRF) available with the DP and submit the physical certificates . Separate DRF should be filled for each ISIN no.
o DP intimates Depository of the request through the system .
o DP submits the certificates to the registrar.o Registrar confirms the demat request from depository.o After dematerialization certificates , registrar updates
accounts and informs depository.o Depository updates its accounts and informs DP.o DP updates accounts and inform investor.
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Introduction of Depository system.
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 organization, 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 dematerialized form and the depository system revolves around the concept of paper-less or scrip-less trading.
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It holds the securities of the investors in the form of electronic book entries avoiding risks associated with paper
It is not mandatory and is left to the investor to decide
Depositories carry out its operations through various functionaries called business partners
Conti..
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Legal framework for a depository
A depository system is governed by the following acts
Securities & Exchange Board of India Act 1992
The SEBI(Depositories and Participants) Regulations, 1996
Bye –laws of depository
Business rules of depository
The Companies Act 1956
Presently there are two Depositories working in India
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NSDL
It was registered by the SEBI on June 7, 1996 as India’s first Depository to facilitate trading and settlement of securities in the demat form
Promoters :-
IDBI UTI NSE
CDSL
It commenced its operations during feb, 1999
Promoters :-
BSE BOB BOI SBI HDFC
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Role and Functions of NSDL and CDSL
A/C main MaintenanceDematerializationMarket TransfersTransmissionCorporate ActionsPledge / HypothecationOff - Market TransfersRematerialisation
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Management of CDSL
FYI…..
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Management of CDSL
FYI…..
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Participants of NSDL & CDSL
Intermediaries like :-
Depository participant
Issuer companies
RTA
Clearing members
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Difference between NSDL & CDSL….?
The only Difference between NSDL & CDSL is scope of the work
NSDL Work for NSE Ltd.CDSL work for BSE
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Source :-
https://nsdl.co.in/index.php#
http://www.cdslindia.com/index.html
http://www.slideshare.net/KavitaSharma3/ppt-on-depository-system-in-india
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THANK YOU