Downloaded 38 times
More Related Content
Similar to Depository System
Depository System
- 1. .CHHATRAPATI SHAHU JIMAHARAJ UNIVERSITY, KANPUR SECURITY MARKET OPERATIONS Group 2 BARCLAYS (MBA-FC 2nd semester) Parul Singh Samreen Hashim Sneha Banerjee Atif Mohammad Mohd Nadeem Mohd Baizad Malik Depository
- 2. CONTENTS ROLEAND NEEDOFDEPOSITORYSYSTEM DEPOSITORYPARTICIPANTS(DP) NSDL(NATIONALSECURITIESANDDEPOSITORYLIMITED) SECURITIESANDEXCHANGE BOARDOFINDIA (DEPOSITORIESAND PARTICIPANTS)REGULATIONS,1996 THE DEPOSITORYACT1996 CUSTODIANOFSECURITIESREGULATIONS,1996
- 3. I willcover inthis presentation Whatis Depositories ? Need of Depositories . Role of Depositories . Depositories in India .
- 4. Types ofDepositories Credit unions, Savingsinstitutionsand Commercialbanks
- 5. Needof Depository Growthin Securities transactions Limitations of Physical Transfer To comply with global standards To enhance liquidity in stock markets To ensure transparency in allotment of shares Centralised Systems in Securities Dealings
- 6. Before depositorysystem, Thefollowingwere problem existedbefore investors andco-orperates • Bad deliveries • Fakecertificates • Loss of certificatedin transit • Mutilationof certificates • Delaysin transfer • Long settlementcycles • Mismatchof signatures • Delayin refundandremission ofdividend etc
- 7. Role of Depositories •Depositories are integral institutions in the Indian Capital Market and their functionality can be compared to banking entities. • In India, there are two depositories namely National Securities Depository Limited (NSDL) or Central Depository Services (India) Limited (CDSL) that are registered with SEBI. • Both NSDL and CDSL, facilitate dematerialization of shares i.e. held the shares in electronic form. • Dematerialization of shares • Facilitates share transfer from one DP account to the other.
- 8. Servicesby Depositories • Maintenanceofaccounts of investors. • Dematerialization and re-materialization of shares. • Off market transfers. • Inter-depository transfers. • Nomination facilities. • Transmission of shares. • Distribution of non-financialbenefits from corperates to its shareholders.
- 9. Depositories in India •National Securities Depository Limited (NSDL) is an Indian central securities depository based in Mumbai. It was established on 8 November 1996 as the first electronic securities depository in India with national coverage based on a suggestion by a national institution responsible for the economic development of India . • Central Depository Services Limited (CDSL), is the second Indian central securities depository based in Mumbai. Its main function is the holding securities either in certificated or uncertificated (dematerialized) form, to enable book entry transfer of securities . It was established on February 1999.
- 10. How to openaDemat account? Some additional information- • More than one De-mat account can be opened with the same DP as well as in other DPs. There are no restrictions in this regard. • A zero balance account can be opened. There is no minimum balance limitation. • By giving authority for operation of the account and executing a power of attorney, an investor can allow anybody to operate the account. But this should be taken into the knowledge of the DP concerned.
- 11. In caseof any change in bank account details, the information should be communicated to the concerned DP. Like bank account, the De-mat account cannot be operated on "either or survivor" principle if it is a joint account. After opening a De-mat account neither any name can be included nor any name can be deleted from the account. If an investor holds more than one De-mat account, he may close any one and may place request to the DP to transfer the securities from the closed account to the valid account(s). For this purpose, prescribed charges have to be paid.
- 12.
- 13. • A DepositoryParticipant (DP) is an agent of the depository through which it interfaces with aninvestor. • A DP can offer depository services only after it getsproper registration from SEBI. • A DP is justlike a Branchof a Bank Who Is Depository Participant ?
- 14. In terms ofthe Depositories Act, 1996, SEBI Depositories & Participants) Regulations,1996, only the following entities are eligible to becomea Depository Participant: Public Financial Institution Banks including Foreign Banks State Financial Corporation An Institution engaged in providing financial services promoted by above mentioned jointly and severally CONDITIONSTO BE A DEPOSITORY PARTICIPANT • Custodian of Securities • Clearing Corporation or Clearing House of a Stock Exchange • Stock Broker • Non Banking Financial Company • Registrar & Transfer Agents
- 15. Types Of ownership REGISTERED OWNER BENEFICIAL OWNER
- 16. REGISTEREDOWNER Theregisteredowner is thatpersonwhose namesregisteredin the registerofmembersofthecompany (issuer) • For thesecuritiesdematerialized,NSDL/CDSListheRegisteredOwner inthe booksoftheissuer. • ButRegistered Owner doesnotenjoyanyrightandliabilityattachedwiththe security.
- 17. BENEFICIAL OWNER Beneficialowneris that person who enjoys allrights, duties, and liabilitiesattached with the security. It means voting right, dividend right, bonus share right , right share right etc are allexercised by the Beneficialowner.
- 18. A DP providesfollowing services to the client/clients on behalf of the depository:- Dematerialization (Demat) i.e. converting physical certificates to electronic form Rematerialization (Remat) which is opposite of Demat, i.e. getting physical certificates from the electronic securities Transfer of securities Change of beneficial ownership Settlement of trades done on exchange connected to the Depository Roleof a DP
- 19. NSDL - NationalSecurities Depository Limited
- 20. Overview about NationalSecurities Depository Limited (NSDL) PROMOTERS Industrial Development Bank of India, Unit Trust of India, National Stock Exchange of India Limited, and State Bank of India was registered on June7, 1996 with SEBI and commenced operations in November 1996. NSDL was founded as a counter to the paper-based systems of old, that were imperfect and prone to errors. In August 1996, the Indian lawmakers enacted the Depositories Act that led to the creation of this premier organization.
- 21. MANAGEMENT OFNSDL NSDLis managed by Board of directors headed by a managing director. It is governed by its bye-laws and its business operations are regulated by business rules. NSDL interfaces with the investors through players or business partners. Amendments to NSDL Bye-Laws require the approval of the Board of directors of NSDL and SEBI . What is BYE LAWS?
- 22. Serviceprovidedby NSDL I. NSDLConsolidated Account Statement (CAS) II. Basic Services III. Online Services Offered by NSDL IDeAS SPEED-e STEADY Depository Account Validation (DAN) SPICE
- 23. SYSTEMVIEW OF NSDLDEPOSITORY SYSTEM
- 24. FunctionsofNationalSecurities DepositoryLtd Electronic formSurrender & withdrawal of security Effects settlement of securities Carries out settlement of securities Allotment in e-form Freezing & locking securities as a mortgage Participants of NSDL IIT Trust, Corporation Services, Global Trust Bank, HDFC Bank, City Bank Custodial services, Morgan Stanley Custodial Services, Reliance Share and Stock brocking, Janata Sahakari Bank, Industrial Development Bank of India, State Bank of India, Standard Chartered National Securities Clearing Corporation, Deutsche Bank.
- 25. Why NSDL? • Eliminationof bad deliveries • Elimination of all risks associated with physical certificates • No stamp duty • Immediate transfer and registration of securities • Faster settlement cycle • Reduction in brokerage by many brokers for trading in dematerialised securities BENEFIT • Freeze Facility • Insurance Cover • Computer and communication infrastructure • Every month NSDL forwards statement of account to a random sample of investors as a counter check. • All transactions are recorded at NSDL Central System and in the databases maintained by business partners. SAFETY
- 26. As onNovember 30,2016 Number of certificates eliminated (Approx.) 2519 Cr. Number of companies in which more than 75% shares are dematted 7077 Average number of accounts opened per day since November 1996 3602 Presence of demat account holders in the country 88% of all pincodes in the country
- 28. In India, itis a relatively new concept introduced in 1996 with the enactment of The Depositories Act,1996.
- 29. WHAT IS THEDEPOSITORIESACT 1996 ? It is a legislativeframework for facilitatingthe dematerialization& book entry transfer of securities in a depository. Every depository is required to be registered with the Securities and ExchangeBoard of India (SEBI)
- 30. To conductthe taskofmaintenanceof ownershiprecords of securitiesandeffect changesin ownershiprecords throughbookentry. To choosebetween holdingsecurities inphysicalmode andholdingsecurities ina dematerializedform indepository. Makingthe securitiesfungible Makingthe shares, debenturesandanyinterest thereon of a publiclimitedcompanyfreely transferable Exemptingall transfersof shareswithina depositoryfrom stamp duty. OBJECTIVES OF DEPOSITORIESACT
- 31. Protect theinterest of investors in securities Promote development of securities Regulate the securities market
- 32.
- 33. SEBI hasnotifiedthe regulationsinMay 1996 with regard to norms for registrationof depositories& participants,the eligibilitycriteria for admissionof securitiesto a depository.
- 34. SCOPE OFTHE ACT Enablestheissueof scriplesstrading, transfer of ownershiptrough electronic media and holdingof securities.
- 35.
- 36. What is a'Custodian' A custodian is responsible for keeping as well as safeguarding the investments and securities on behalf of the owners. CUSTODIAN OF SECURITIES “Custodian of securities" means any person whocarries on orproposes to carryon the business of providing custodial services
- 37. REGISTRATION OF CUSTODIANSOF SECURITIES List of Registered Custodian of Securities Axis Bank Limited Citibank HDFC Bank Ltd. Hongkong andShanghai Banking CorporationLimited ICICIBank Limited Kotak Mahindra Bank Limited
- 38. • Under theregulations,custodians must meet obligationssuch as providing regularreportsto clients andgettingassurance reportsfrom qualified auditors, among others. • Who is responsible under the regulations? GENERAL OBLIGATIONS AND RESPONSIBILITIES OF CUSTODIANS
- 39. Board's rightto inspect Notice before inspection Submission of Report to the Board INSPECTION AND AUDIT OF CUSTODIAN OF SECURITIES Suspension of certificate Cancellationof certificate ACTION IN CASE OF DEFAULT
- 40. BIBLIOGRAPHY INTERNET • http://economictimes.indiatimes.com/news/economy/poli cy/nsdl-to-allow-up-to-three-nominations-in-single- demat-account/articleshow/55790674.cms • http://www.legalservicesindia.com/article/article/ipo- scam-with-special-referance-to-nsdl-v-sebi-case-1517- 1.html •https://www.bankbazaar.com/saving-schemes/nsdl.html • http://www.moneycontrol.com/mccode/news/lp_news_det ail.php?autono=2172