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Presentation On Depository System: Submitted To

The document discusses India's depository system. It introduces depositories as organizations that hold securities electronically, similar to how banks hold money. Depository participants act as agents that allow investors to open demat accounts and interface with depositories. The key objectives of depositories are to create a centralized system for handling securities, reduce transaction costs, enhance liquidity and efficiency, and reduce settlement risk and time for transfer of securities. Currently, India has two main depositories - NSDL and CDSL. Demat accounts allow investors to conveniently and securely invest in the stock market through depository participants like banks and brokers.

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Manthan Ashutosh Mehta
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303 views17 pages

Presentation On Depository System: Submitted To

The document discusses India's depository system. It introduces depositories as organizations that hold securities electronically, similar to how banks hold money. Depository participants act as agents that allow investors to open demat accounts and interface with depositories. The key objectives of depositories are to create a centralized system for handling securities, reduce transaction costs, enhance liquidity and efficiency, and reduce settlement risk and time for transfer of securities. Currently, India has two main depositories - NSDL and CDSL. Demat accounts allow investors to conveniently and securely invest in the stock market through depository participants like banks and brokers.

Uploaded by

Manthan Ashutosh Mehta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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PRESENTATION ON DEPOSITORY

SYSTEM

Submitted To:- Submitted By:-


Manthan Mehta
Ms. Rajshree Sharma
(MBA Dual 3rd Semester)
(Assistant Professor)
Introduction
 In order to overcome the various problems associated with
dealing in physical shares , such as:-
 problems of theft, fake and/or forged transfers.
 share transfer delays due to signature mismatches.
 much paperwork.
 time consuming process.
 cost of transfer (stamp duty), etc.
 The govt. of India in 1996, enacted the Depositories Act 1996
to start depository services in India
Depository System

 Depository System is also known as “Scripless Trading


System”.

 It is an organization which holds the securities of a


shareholder in the form of electronic accounts
(dematerialized form), in the same way a bank holds the
money.

 A custodian of its clients’ securities.

 Interfaces with its investors through its agents called


“depository participants”.
DEPOSITORY
PARTICIPANT
Who is a depository participant?

 A depository participant (DP) is an agent of the depository


who is authorised to offer depository services to all the
investors.
 DP is the intermediary between the investor and the
depository.
 A DP has to be registered with SEBI.
 A DP is just like a branch of a bank.
 An investor can open an account through the DP only
known as Demat a/c.
Who Can Be A Depository
Participant?
A Foreign bank
A Public A Scheduled operating in
Financial Commercial India with the
Institution. Bank. approval of
RBI.

A Clearing
Non-banking
State Financial house or
Financial
Corporations. Clearing
Companies.
corporations.

A Registrar to
an issue or
Stock-brokers.
Share transfer
agent.
Depositor
y

The Participant Depositor


y
Investor
s Participant

The
Issuing
Company
Create a Avoid the
Reduce Enhance Reduce the
system for risk of
transaction liquidity time for
central settlement
cost for the and transfer of
handling of of
investor. efficiency. securities.
securities. securities.
depository
Objectives of
Depositories in India

 At present, there are two depositories registered with


SEBI.

National Security
Depositary System

Central Depositary
Service Limited
 First and the largest depository in India – established in
1996.

 It is a public limited company formed under the


Companies Act,1956.

 NSDL interacts with investors and clearing members


through market intermediaries called depository
participants.
 CDSL is the second depository in India.

 CDSL commenced its operations in 1999.

 The objective of CDSL is to provide convenient,


dependable and secure depository services at
affordable cost.
HOW TO INVEST IN
SHARE MARKET?

Depository
Customer Depository
Participants
• SBI Bank • CDSL
• HDFC • NSDL
Bank
• ICICI
Direct
• Others
Benefits Of Depository
System
 A safe and convenient way to handle securities.
 Immediate transfer of securities.
 No odd lot problem.
 Nomination facility.
 Holding investments in equity and debt instruments in a
single account.
 Reduction in paperwork.
 Reduction in transaction cost.
 Elimination of risks associated with physical certificates.
THANK YOU

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