Nsdl Functions and Its Demat Participants

8/6/2019 Nsdl Functions and Its Demat Participants

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ABOUT NSDL:

First depository in India. Registered on June 7, 1996.

Commenced operation in November 1996.

Formed under companies act, 1956. Withpaid up capital of Rs 105cr.

Aims at ensuring safety and soundness of

Indian capital market.


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SHAREHOLDERS

State Bank of India

HDFC Bank Limited

Deutsche Bank A.G.

Axis Bank Limited

Citibank N.A. Standard Chartered Bank

The Hongkong and Shanghai BankingCorporation Limited

Oriental Bank of Commerce Union Bank of India

Dena Bank

Canara Bank


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BOARD OF DIRECTORS

Dr. R. H. Patil

ChairmanThe Clearing Corporation of India Limited Chairman

Mr. Gagan RaiNational Securities Depository LimitedManaging

Director & CEO

Mr. Ravi NarainManaging DirectorNational Stock Exchange of India Limited Director

Mr. P. P. Vora

Former Chairman & Managing DirectorIndustrial Development Bank of India Limited

(Now, IDBI Bank Ltd.) Director

Mr. Bansi S Mehta

Chartered Accountant, Chief MentorM/s Bansi S. Mehta & Co. Director


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Mr. Sudesh PunhaniFormer Director (Finance)National Aviation Company of India Limited Directo

Dr. Rajiv B. Lall

Managing Director & CEOInfrastructure Development Finance CompanyLimited Directo

Dr. Prakash G ApteFormer Director

Indian Institute of Management, Bangalore Director Mr. R.K. Bansal

Executive DirectorIDBI Bank Limited Director

Mr. S.S. Ranjan

Deputy Managing Director & CFOState Bank of India Director

Mr. Kaushik ShapariaManaging DirectorGlobal Transaction Banking Head, India

Deutsche BankDirector


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NSDL interacts with investors and

clearing members through market

intermediaries called depositoryparticipants. NSDL performs a wide

range of securities related function

through Depository participants.


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Maintenance of individual investorsbeneficial holdings in the electronic

form. Dematerialization i.e. converting physical

certificates into their electronic form

Rematerialization i.e. converting

securities in DeMat form into physicalcertificates

Effects settlement of securities traded onthe exchanges.

Carries out settlement of trades not doneon the stock exchange (off-markettrades).


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Transfer of securities.

Stock Lending and Borrowing.

Pledging/hypothecation of dematerialised

securities.

Electronic credit in public offerings of

companies or corporate actions.


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Two depositories in India NSDL (National Securities Depository

Limited)

CDSL (Central Depository ServiceLimited)

Free transferability of Public ltd. Co

Dematerialising the securities in

depository mode.

Providing ownership record in book entryform.


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Depositories Bank

Hold securities in an account Hold funds in an account

Transfer securities between

accounts on the instruction of theaccount holder

Transfers funds between accounts

on the instruction of the accountholder

Assist in transfer of ownershipwithout having to handle securities

Assist in transfers without having tohandle money

Facilitates safekeeping of shares Facilitates safekeeping of money


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FEW DEPOSITORIES ARE:

Bank of India

Bank of Baroda

Kotak securities

Motilal Oswal

Reliance Capital

UTI

Yes Bank


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Services provided by NSDL and CDSL are

carried out through their agents known as

Depository Participants [DPs]. DPs are

appointed by depositories after anapproval from SEBI. According to SEBI

regulations, 3 categories of entities such as

banks, financial institutions, and SEBI

registered trading members qualify forbecoming DPs


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Benefits of Depository System

Safety


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Benefits of Depository System Elimination of bad deliveries Elimination of all risks associated with

physical certificates- No stamp duty Immediate transfer and registration of

securities

Faster settlement cycle Faster disbursement of non cash corporate

benefits like rights, bonus, etc Reduction in brokerage by many brokers for

trading in dematerialised securities


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Reduction in handling of huge volumes

of paper

periodic status reports to investors ontheir holdings and transactions, leading

to better controls.

Elimination of problems related totransmission of demat shares


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SAFTEY

All investors have a right to receive their

statement of accounts periodically fromthe DP

There are periodic inspections into theactivities of both DP and R&T agent byNSDL. This also includes records based onwhich the debit/credit are effected

Computer and communication

infrastructure Machine level back-up

Disaster back up site

Periodic Review


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Nsdl Functions and Its Demat Participants

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