c





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

c




 
"Dematerialisation" is a process by which physical
certificates are converted into electronic form.

c 



"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.

c 
 




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 sitewww.cdslindia.com

c 


"Issuer" means any entity making an issue of securities.
c



 


 
 

"ISIN" is the unique identification number given to a
security of an issuer at the time of admitting such security
in the depository system.

c  
 
 
     
 




No, different securities issued by the same issuer will have
different ISINs.

c






Following services can be availed of through a DP :
a) Dematerialisation, i.e. getting physical securities
converted into electronic form.
b) Rematerialisation, i.e. getting electronic securities
balances held in a BO account converted into physical
form.
c) To maintain record of holdings in the electronic form.
d) Settlement of trades by delivering / receiving underlying
securities from / in BO accounts.
e) Settlement of off-market trades i.e. transactions between
BOs entered outside the Stock Exchange.
f) Providing electronic credit in respect of securities
allotted by issuers under IPO or otherwise.
g) 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.
h) Pledging of dematerialised securities & facilitating loans
against shares.
i) Freezing of the demat account for debits, credits, or both.
j) Internet facilities "easi" and "easiest", if the DP is
registered for the same with CDSL.

c


   


  
!

A demat account has become a necessity for all categories

of investors for the following :

a) 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.

b) It is a safe and convenient way to hold securities

compared to holding securities in physical form..

c) No stamp duty is levied on transfer of securities held

in demat form.

d) Instantaneous transfer of securities enhances

liquidity.

e) It eliminates delays, thefts, interceptions and

subsequent misuse of certificates.

f) Change of address, registration of Power of Attorney

- can be effected across companies by one single
 instruction to the DP.

g) Each share is a market lot for the purpose of

transactions - so no odd lot problem.

h) 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.

i) Immediate credits in case of any allotment in bonus,

rights issues and IPOs.

c
 

   

  



a) 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.
b) Investor has to first choose a DP based on his
convenience and the DP's charges.
c) Besides submitting an application in the prescribed
form, the investor should submit a photocopy of the "


 along with the original as proof of identity and
address proof such as passport, ration card, etc to the DP.
d) 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.
e) 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.

(  


 
 
 





 


 

a) 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.

b) 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.
c


  
   

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.




)
  
 


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.
c
 






 

To dematerialise any physical security:

a) open a demat account with a DP.

b) fill in a DRF (Demat Request Form) and submit the same

with the physical certificate/s to the DP for
dematerialisation.

c) DP defaces and sends the certificates to the

Issuer/Registrar who credits an equivalent number of
securities in the demat account, maintained by CDSL.

d) For each ISIN, a separate DRF has to be used.

 
      

  *+
*,+


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
websitewww.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.

c
    
 






 
 

 
   !

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.

c
 



 




 
 


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.

c
 



 




 

 


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.

c

.

#
.

#


 

a) 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.
b) 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.

c


 





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.

c


 


 


 







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.
c


 
.

#/
 

  !

.

#/





  

Rolling Market (BSE) RM

Normal Rolling NR
(NSE)

Auction Rolling AR
(BSE)

Normal Auction NA
(NSE)

Company Objection CO

Company Objection CO
Auction

Trade-to-Trade TT


c

0c


  

0

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:-
a) In the present market environment of T+2 pay-in
settlement cycle, faster settlement of securities can be
facilitated through client level pay-in.
b) 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.
c) Client level pay-in avoids counter party risk associated
with the delivery of securities through an intermediary.
d) Last minute credits received in a BO account before
pay-in time can be used for pay-in.
e) 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.

c


   
 
 

 

BOs should take the following precautions with respect to

instruction slips:-
a) Ensure that the DP issues Debit Instruction Slip (DIS)
book.
b) Ensure that instruction slip numbers are pre-printed on
each DIS.
c) Ensure that the demat account number is prestamped.
d) If only one entry is made in the DIS, strike out
remaining space to prevent misuse.
e) All details like target account ID, quantity, ISIN, etc. to
be furnished in the DIS should be filled in by BO himself.
f) Use separate DIS for confirming On Market / Off
Market / Inter depository obligations / transfers and also
for Delivery and Receipt Instructions.
g) In case of a Joint Account, all the account holders must
sign the DIS
h) Submit the DIS in duplicate and obtain the DP's
acknowledgment / receipt stamp on the copy of the DIS
 and retain the same in safe custody.
i) Keep the DIS book in proper custody under lock and key
when not in use. In case of any loss / misplacement of DIS,
the same should be intimated to the DP immediately.
j) Should never sign and keep a blank DIS.
k) All the holders must confirm any alteration, correction
or cancellation made on the DIS with their signatures.

c


   



Transmission is the process by which securities of a

deceased account holder are transferred to the account of his
legal heirs / nominee. Process of transmission in case of
dematerialised holdings is more convenient as the
transmission formalities for all securities held in a demat
account can be completed by submitting necessary
documents to the DP.

  
     

$   


  
 


 

The claimant should submit to the concerned DP an

application with Transmission Request Form (TRF) along
with the following supporting documents:

a) A notarised copy of the death certificate, In case of death

of the sole holder where the sole holder has appointed a
nominee.

b) In case of death of the sole holder, where the sole holder

has not appointed a nominee:

a. A notarised copy of the death certificate, and

b. Any one of the below mentioned documents

i. Succession certificate
ii. A certified copy of the will and the probate
iii. A certified copy of the Letter of Administration only
if the value of the securities is more than 1 lakh.

c) The DP, after ensuring that the application is genuine,

will transfer securities to the account of the claimant.

d) The major advantage in case of dematerialized holdings

is that the transmission formalities for all securities held in
a demat account can be completed just by interaction with
the DP alone.
."*/
12c
 ."*/

SMART stands for .S "lerts *elated to /ransactions in which investors
registered for SMART will receive alerts for all types of debits, subject to a
maximum of four debits in a day, and for credits due to IPOs allotments and
corporate actions.

32(  
 


 
  
 

You have to contact your DP for the details.

42(  

  

 
 
You will have to approach your DP and submit the SMART registration
form duly completed. This can also be downloaded from CDSL¶s website
www.cdslindia.com.

52c 

."*/


Presently the alerts are sent twice a day, around 8 AM and around 7 PM.