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Legal Framework

As a part of its on-going market reforms, the Government of India promulgated the Depositories Ordinance in September 1995. Based on this ordinance, Securities and Exchange Board of India (SEBI) notified its Depositories and Participants Regulations in May 1996. The enactment of the Depositories Act the following August paved the way for the launch of National Securities Depository Limited (NSDL) in November 1996.The Depositories Act has provided dematerialisation route to book entry based transfer of securities and settlement of securities trade.

In exercise of the rights conferred by the Depositories Act, NSDL framed its ByeLaws and Business Rules. The ByeLaws are approved by SEBI. While the ByeLaws define the scope of the functioning of NSDL and its business partners; the Business Rules outline the operational procedures to be followed by NSDL and its `Business Partners`.

In accordance with the SEBI (Depositories and Participants) Regulations, 2018 (earlier SEBI (Depositories and Participants) Regulations, 1996), NSDL has adopted Code of Conduct for its Directors and Code of Ethics for its Directors and Key Management Personnel. The Code of Ethics for Directors and Key Management Personnel of NSDL, are aimed at improving the professional and ethical standards in the functioning of NSDL thereby creating better investor confidence in the integrity of the market.