DP SERVICES
A "Depository" is a facility for holding securities, which enables securities transactions to be processed by book entry. To achieve this purpose, the depository may immobilize the securities or dematerialise them (so that they exist only as electronic records).India has chosen the dematerialisation route. In India, a depository is an organisation, which holds the beneficial owner's securities in electronic form, through a registered Depository Participant (DP). A depository functions somewhat similar to a commercial bank. To avail of the services offered by a depository, the investor has to open an account with a registered DP
"Dematerialisation" is a process by which physical certificates are converted into electronic form.
"Beneficial Owner" is a person in whose name a demat account is opened with CDSL for the purpose of holding securities in the electronic form and whose name is recorded as such with CDSL.
A "Depository Participant" (DP) is an agent of the depository who is authorised to offer depository services to investors. Financial institutions, banks, custodians and stockbrokers complying with the requirements prescribed by SEBI/ Depositories can be registered as DP.Further information on DP, can be accessed from CDSL's web site www.cdslindia.com
"Issuer" means any entity making an issue of securities.
"ISIN" is the unique identification number given to a security of an issuer at the time of admitting such security in the depository system.
No, different securities issued by the same issuer will have different ISINs.
Following services can be availed of through a DP : 1. Dematerialisation, i.e. getting physical securities converted into electronic form. 2. Rematerialisation, i.e. getting electronic securities balances held in a BO account converted into physical form. 3. To maintain record of holdings in the electronic form. 4. Settlement of trades by delivering / receiving underlying securities from / in BO accounts. 5. Settlement of off-market trades i.e. transactions between BOs entered outside the Stock Exchange. 6. Providing electronic credit in respect of securities allotted by issuers under IPO or otherwise. 7. Receiving on behalf of demat account holders non-cash corporate benefits, such as, allotment of bonus and rights shares in electronic form or securities resulting upon consolidation, stock split or merger / amalgamation of companies. 8. Pledging of dematerialised securities & facilitating loans against shares. 9. Freezing of the demat account for debits, credits, or both. 10. Internet facilities "easi" and "easiest", if the DP is registered for the same with CDSL.
A demat account has become a necessity for all categories of investors for the following : 1. SEBI has made it compulsory for trades in all listed scrips to be settled in demat mode. Although, trades upto 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates etc. 2. It is a safe and convenient way to hold securities compared to holding securities in physical form. 3. No stamp duty is levied on transfer of securities held in demat form. 4. Instantaneous transfer of securities enhances liquidity. 5. It eliminates delays, thefts, interceptions and subsequent misuse of certificates. 6. Change of address, registration of Power of Attorney - can be effected across companies by one single instruction to the DP. 7. Each share is a market lot for the purpose of transactions - so no odd lot problem. 8. Any number of securities can be transferred/delivered with one delivery order. Therefore, a. Paperwork and signing of multiple transfer forms is done away with. b. It facilitates taking advances against securities. 9. Immediate credits in case of any allotment in bonus, rights issues and IPOs.
1. The process of opening a demat account through a DP of CDSL is very simple and easy. It is similar to the opening of a bank account. 2. Investor has to first choose a DP based on his convenience and the DP's charges. 3. Besides submitting an application in the prescribed form, the investor should submit a photocopy of the PAN card along with the original as proof of identity and address proof such as passport, ration card, etc to the DP. 4. Before opening the demat account, the investor will have to execute an agreement on a stamp paper to be provided by the DP, which defines the rights and obligations of both, the investor and the DP. 5. On opening a demat account, a unique BO ID (Beneficial Owner Identification) Number is allotted, which should be quoted in all future transactions.
Under the depository system, there is no restriction on opening a BO account with the same or other DPs, subject to the condition that all account opening requirements are complied with.
There is absolutely no compulsion on any investor to open his demat account with the same DP as that of his broker. Investor can open account with the DP of his choice and can carry on his trading activity through a broker of his choice.
The nomination facility is available in the demat accounts. It is advisable for all the individual BO's to avail of this facility.
SEBI has directed that no investor should pay account opening charges, besides the statutory charges.
Yes. Any number of securities admitted with CDSL can be dematerialised and held in one demat account.
It is not possible to add or delete any name while dematerialising a share certificate. If the shares held in single name are intended to be held in any joint account, they have to be transferred to such names before they are dematerialised. Alternatively, such shares can be dematerialized first in the demat account in the single name and then transferred to the demat account in the joint names, or vice-versa, through an off-market transaction.
Different securities, even if of the same issuer, are given a separate ISIN to identify each one of them and each ISIN is maintained and accounted for separately within an account. Therefore, there is no question of any mix up. However, BOs are advised to indicate the correct ISIN while issuing any instruction.
A demat account can be opened and maintained even with nil balance.
1. DP sends to BO, a statement of transactions and balances at least once every month, even where a single transaction has taken place during the month. The statement can be sent more frequently, if so desired by BO against payment of additional charges 2. With the launch of easi (Electronic Access to Securities Information), the internet facility to access CDSL demat account details, a BO can know up-to-the-moment status of his account any-time, any-where (which is currently updated every 15 minutes), if the BO has registered under easi through his DP.
Yes. SEBI has made it mandatory for all existing and new account holders to submit a copy of their PAN card, along with the original for verification.
According to the Depositories Act, 1996, an investor has the option to hold securities either in physical or electronic form. However, SEBI has notified that settlement of trades in listed securities should take place only in the demat mode. Although, trades upto 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates, etc.
To dematerialise any physical security: 1. open a demat account with a DP. 2. fill in a DRF (Demat Request Form) and submit the same with the physical certificate/s to the DP for dematerialisation. 3. DP defaces and sends the certificates to the Issuer/Registrar who credits an equivalent number of securities in the demat account, maintained by CDSL 4. For each ISIN, a separate DRF has to be used.
The BO should inform the DP about the loss of the statement of holdings and request for the issue of a duplicate statement.
No. A DP cannot access the BO accounts of any other DP. It can have access only to those demat accounts, which are serviced by it.
Yes, the ISIN of the security should be mentioned in the DRF, to ensure that the correct security is dematerialised. If, however, the investor does not know the ISIN, he can obtain the same from his DP or from CDSL's website www.cdslindia.com
No. There is no need to fill in a transfer deed. The physical certificates have to be accompanied by a DRF, which can be obtained from the DP.
Only those securities held in the form of certificates can be dematerialised. The securities should be also admitted with CDSL. Securities held in street name (seller's name) cannot be dematerialised.
Yes, part of the BO's holdings can be held in physical form as per the choice of the investor. Though it is advisable to have the entire holdings held in demat mode so that the holdings have liquidity as and when available, it should be noted that part dematerialisation of holdings in a single physical certificate is not allowed.
In such a case, the investor should request the company to have that security admitted with CDSL and once that is done, he can get it dematerialised. It may be mentioned that, on the request of any investor, a company must get that security admitted with the depository/ies.
Yes. In demat form the market lot is one share and therefore, there is no question of an odd lot.
Dematerialised securities do not have any distinctive or certificate numbers. In demat all securities are fully fungible, which means that any 100 shares of an ISIN are similar to any other 100 shares of that ISIN.
Yes, it can be done through Rematerialisation, which is the term used for converting electronic holdings back into physical certificates. For this, a BO should submit his request in a Remat Request Form (RRF) to his DP. DP will electronically forward the request to the Issuer / Registrar after verifying that there is a sufficient balance of that security in the account. The Issuer / Registrar will send the physical certificates directly to the BO.
CDSL does not levy any charge for dematerialisation of securities. However, DPs collect a dematerialisation charge together with postage / courier charges.
Individuals, having/opening demat accounts, either, singly or jointly with one or two persons can make nomination. If the shares are held jointly, all the joint holders are required to sign the nomination form.
Non-individuals including societies, trusts, body corporates, Kartas of Hindu Undivided Family, holders of power of attorney cannot make a nomination.
A minor can be nominated only if he is represented by a court appointed/natural guardian.
Trusts, societies, body corporates, partnership firms, Kartas of Hindu Undivided Family or power of attorney holder cannot be appointed as nominee.
Both resident Indians as well as NRIs can nominate an NRI. Similarly, an NRI can nominate a resident Indian or another NRI.
Irrespective of the fact whether securities are held singly or jointly, only one person can be nominated. In the event of the death of the sole BO or all the joint BOs, all rights in the securities held in the demat account will vest with the nominee.
Change in the order of names in which certificates are issued is termed as transposition.
Sometimes, a titleholder of securities holds them jointly with one/two/three persons in different order of names. Since dematerialisation can take place through a demat account only in the identical order of names, such investor would have to open multiple demat accounts as per the order of names. To avoid such a situation, the investor could consider using the transposition-cum-demat facility offered by CDSL.
Transposition-cum-demat facility enables an investor to transpose names of the joint holders in desired order along with the process of dematerialisation of certificates. Transposition-cum-dematerialisation facilitates dematerialisation of certificates held in different order of names through one demat account, provided the securities to be transposed are held in the same joint names, but, in a different order. Illustratively if A owns a security, which he holds in the joint names of ABC, ACB, etc. he can first transpose them in the name of, say, ABC in which order demat account might have been opened.No new name can be added through transposition process. Similarly, existing names cannot be deleted.
The BO should submit his application in Transposition Request Form (TRPF) alongwith the Demat Request Form (DRF) and the share/securities certificates to his DP.
Yes Whether a separate TRPF should be filled for each combination of names? No. Different combination of names can be listed in separate boxes in section (C) of the TRPF. If the space provided in the TRPF is not found sufficient, a separate form or an annexure may be used.
1. The application for transposition should contain only those names in which the BO account has been opened. 2. Signatures of all the holders affixed on TRPF should tally with the DP's records.
No, CDSL does not collect any fee from DPs for processing transposition-cum-demat requests.
No, the application for transposition cannot be used along with rematerialisation request.
The procedure for selling dematerialised securities through any stock exchange is similar to the procedure for selling physical shares. However, the procedure for delivery of securities is much simpler when compared to the delivery of securities in physical segment. In case of sale of demat security, immediately on receipt of intimation of execution of trade from broker, the seller should issue debit instructions to the DP with whom he maintains his demat account, for delivery of security either directly to the Clearing Corporation/Clearing House or to the broker's clearing account, as advised by his broker.
A purchaser of securities can give one-time standing instruction to his DP for receiving securities in his account. This standing instruction can be given at the time of opening of account or later. Alternatively, a BO may choose to issue separate receipt instruction to his DP every time he makes any purchase of securities.
1. Any transaction for sale and purchase of securities through a broker on the stock exchange to be settled through Clearing Corporation / Clearing House is generally termed as On Market transaction. 2. Off Market transaction is one which is settled directly between two BOs with or without using the broker and where no Clearing Corporation / Clearing House is involved.
Any transfer of securities between two BOs not having demat accounts with the same depository is termed as an "Inter Depository" transfer.
Yes. In CDSL, inter depository transfers can be executed through the same instruction slips used for on market and off market transactions.
No. Securities can be bought and sold only through a stockbroker. DP facilitates delivery of securities against a sell transaction or receipt of securities for a buy transaction.
Transaction charges for each debit in a BO account is levied by CDSL and collected by DPs. DPs after adding their mark up, if any, fix a composite charge which is intimated by them to their clients.
Settlement number has 7 digits, the first 4 digits represent the year and the remaining 3 digits represent the settlement number of the exchange on which the transaction has been executed.
Facility to deliver securities to Clearing Corporation/Clearing House directly from the demat account of investors is termed as client level pay-in. Benefits of the client level pay-in are:- 1. In the present market environment of T+2 pay-in settlement cycle, faster settlement of securities can be facilitated through client level pay-in. 2. Client level pay-in avoids issuance of multiple instructions i.e. first from client to CM and then from CM to Clearing Corporation/Clearing House. Last minute pay-in is possible through the client level pay-in. 3. Client level pay-in avoids counter party risk associated with the delivery of securities through an intermediary. 4. Last minute credits received in a BO account before pay-in time can be used for pay-in. 5. Part pay-in of securities is possible, thereby, reducing losses due to auction (if any).
Yes. CDSL provides the facility of client level 'normal' and 'early' payin for, both, BSE and NSE settlements.
1. Ensure that the DP issues Debit Instruction Slip (DIS) book. 2. Ensure that instruction slip numbers are pre-printed on each DIS. 3. Ensure that the demat account number is prestamped. 4. If only one entry is made in the DIS, strike out remaining space to prevent misuse.
A BO can, not only pledge his demat securities, but, may also be able to obtain higher loan amounts, with reduced margins & lower rate of interest. Moreover, procedure for pledging securities in demat form is very convenient, both, for the pledgor and the pledgee.
1. The pledgor and the pledgee must have BO accounts with CDSL. These accounts can be with the same DP or with different DPs. 2. The pledgor has to fill up the Pledge Request Form (PRF) in duplicate available with his DP. 3. On receipt of the PRF, the pledgor's DP verifies that the securities can be pledged. The DP then sets up a pledge in the depository system and a unique Pledge Sequence No. (PSN) will be generated. 4. One copy of PRF (with the PSN) should be sent to the pledgee by the Pledgor. The Pledgee will then countersign the PRF for acceptance/ rejection of the pledge request and submit the PRF to his DP. 5. One copy of PRF (with the PSN) should be sent to the pledgee by the Pledgor. The Pledgee will then countersign the PRF for acceptance/ rejection of the pledge request and submit the PRF to his DP. 6. The pledgee's DP has the facility to access the request on line. Based on copy of PRF the pledgee's DP either accepts or rejects the pledge request.
1. The pledgor has to fill up the Unpledge Request Form (URF) in duplicate available with his DP. 2. On receipt of the URF, the pledgor's DP sets an unpledge request in the depository system using the PSN generated at the time of creating the pledge. An unpledge request can be for part or entire quantity of pledged securities. 3. One copy of URF (with the PSN) should be sent to the Pledgee by the Pledgor. The Pledgee will then countersign the URF for acceptance/ rejection of the unpledge request and submit the URF to his DP. 4. The pledgee's DP has the facility to access the request on line. Based on copy of URF the pledgee's DP either accepts or rejects the unpledge request. 5. The securities can also be unpledged by the Pledgee giving duly filled URF to his DP instructing to unpledge the securities. This facility is called " Auto Unpledge" where no instruction is required to be given by the Pledgor.
In case of default by the pledgor, the pledgee, after giving notice to the pledgor as per the terms of the agreement, may instruct his DP to invoke the pledge by submitting the "Invocation Request Form" (IRF). On execution of this instruction, the securities are transferred into the pledgee's account. This does not require any confirmation from the pledgor.
All securities other than Government Securities can be pledged.
CDSL system permits locked-in securities to be pledged. However, it is the option of the pledgee to accept such securities in pledge. A locked-in security cannot be invoked by the pledgee.
The pledgor continues to remain the beneficial owner of the pledged securities and will, therefore, be receiving the corporate benefits during the period of pledge.
The pledged securities can be dematerialised with the prior permission of the pledgee bank.
Distribution of dividend or interest payments, issue of rights or bonus securities, consolidation of holdings or issue of another security on account of merger or demerger, calling money on partly paid securities, buyback or open offer, etc. are normally the purposes for which issuer sets up corporate action to consider benefits or entitlements of holder.
When a company issues securities to the public through a prospectus it is popularly known as an IPO. Credit of securities allotted in IPOs can be directly effected in the investors demat accounts.
Yes, it is possible to get securities allotted in IPOs directly in demat form. In fact, in the public issue application form itself, the investor has to mention the BO ID and name and ID of the DP. Any allotment made will be credited into the BO's account directly and the BO will get intimation to that effect from the company.
In case the IPO form provides for 16 digits, the 16 digit BO ID should be entered by the BO. However, if the form provides for separate fields for DP ID & BO ID, the first 8 digits are to be entered as the DP ID and the last 8 digits BO ID. E.g.
1. When any corporate benefits such as rights or bonus or dividend or interest is announced for a particular security, CDSL provides to the concerned issuer / RTA list of the BOs, their electronic holdings as on the record / book closure date for recording the entitlement of the corporate benefit. 2. The Issuer / Registrar then calculates the entitlement of the corporate benefit due to all BOs. 3. The disbursement of cash benefit, such as dividend or interest, rights application form etc. is made by the Issuer / Registrar directly to the BOs. 4. Credit of non-cash (bonus, rights) entitlements is made directly to the BOs demat accounts through the depository.
No, the application will not be rejected. But the company may allot the shares in physical form, which the BO may subsequently dematerialize. If the application is through the book building route, the application may be rejected.
BOs can verify the credit of the securities allotted to them in the following ways: 1. The RTA would send to BOs the allotment advice regarding the shares allotted and credited to their demat account. 2. From the statement of account sent by the DP. 3. Through CDSL's Internet facility easi/easiest, if the BOs have registered for the same.
Yes, there is a choice of receiving the non-cash corporate benefits either in electronic or in physical mode. Issuers send intimation directly to BOs for ascertaining their choice in this regard.
It is desirable that in case of any discrepancy in cash and non-cash corporate benefits, BO should contact the Issuer / Registrar directly.
All queries regarding the IPO should be addressed to the company or the Registrar & Transfer Agent, whose details are available in the application form/offer document.
1. The Issuer/RTA regularly obtains holdings report on ISIN balances from CDSL. On the basis of holdings report, the Issuer/RTA issues advice for credit of bonus/rights shares in the demat accounts. 2. The Issuer/RTA may, if the benefits are being given in the form of securities, distribute such benefits to the investor through CDSL by crediting them electronically to the BO account, provided that the newly created security is an eligible security and has been admitted into CDSL. 3. Where allotment is made in demat form, the Issuer or its RTA sends allotment advice directly to the BO. 4. Security directly credited to the BO account will be reflected in the statement issued by DPs. 5. In case any security is not admitted with CDSL system, the Issuer/ RTA will distribute the corporate benefit in the physical form.
If holding is in physical form, the BO can choose to receive the rights/ bonus allotment in the dematerialised form if he informs his intent to receive the rights/bonus in dematerialised form to the Issuer/RTA.
Normally, the credits due, on account of a rights/bonus allotment are given in the same demat account.
As in the physical segment, the Issuer / Registrar mails the rights form directly to BOs. CDSL / DP would not be mailing the same.
No, in such a case the rights/bonus allotment would have to be issued in physical form.
The basis of allotment of securities is independent of the form (physical / dematerialised) in which the allotted security is requested. Thus, there is no preference given in the allotment to investors applying for securities in dematerialised form. These investors are treated on par with the requests for allotment in physical form.
Securities in such cases are credited to the demat account on the effective day indicated by the Issuer/ RTA, as against time of 15 - 20 days taken in for receiving securities in physical form, because in such cases certificates have to be printed and dispatched.
1. A separate ISIN is issued by depositories to identify partly paid up securities. 2. Such securities are traded separately on the stock exchanges. 3. After the call money realisation, when the issuer / Registrar converts the partly paid up securities to fully paid up securities, the security will have the same ISIN.
easiest is an internet facility which permits BOs/CMs to submit debit/credit transaction instructions to effect off-market, on-market, inter-depository and early pay-in transactions. Moreover, all the facilities and benefits of easi are automatically available to a subscriber of easiest.
There are two options available on easiest: 1. Trusted account transfers - Trusted accounts are settlement accounts of your broker. A BO can specify upto 4 such settlement accounts. 2. Account of choice transfers - In the account of choice option, transfer of securities will be permitted to any demat account.
A BO/CM should register for easiest as it gives him anytime-anywhere convenience for submission of his debit/credit instructions and access to his demat account for details of holdings and transactions. Thus, a BO does not require to approach his DP each time a transaction instruction is to be submitted.
No, a BO/CM who has entered instructions through easiest need not give a separate debit instruction slip/s to his DP.
Yes, the easiest facility is available to all BOs and CMs. A BO/CM can avail of easiest facility only if the DP with whom he maintains his account is registered for this facility.
Yes, all the facilities of easi will be available to all registered users of easiest.
No, you shall be required to login and upgrade your registration to easiest.
1. Login to CDSL's website www.cdslindia.com and click on the link "Register Online" from the Home page. 2. Select the facility (easi or easiest) you wish to register for. 3. Enter your details like Login-Id, Email-Id, etc. 4. Print the registration form. 5. Submit the registration form to your DP duly signed by all account holders. 6. You will then receive the password at your email-Id. 7. You can commence using easi / easiest by entering your 'User name' and 'Password' at the homepage of CDSL's site www.cdslindia.com.
Yes, a BO/CM can enter multiple instructions, in a prescribed format, offline and thereafter upload this file through easiest.
No, BOs/CMs have to register separately with their DPs to avail of the upload facility.