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PROCESS FLOW FOR ISSUANCE OF CERTIFICATE OF DEPOSIT (CD) IN DEMAT FORM
- Send the letter of Intent conveying the intent to offer demat option for Certificate of Deposit. Sign a tripartite/bipartite agreement with NSDL. If the Issuer has admitted any of its securities in NSDL (shares, debentures, Commercial Paper etc) and wishes to appoint the same R & T agent for Certificate of Deposit also, then the Issuer need not sign a tripartite agreement.
- Enclose a Demand Draft/ cheque drawn in favour of "National Securities Depository Limited" payable at Mumbai for Rs. 10,000 for allotment of ISIN for the Certificate of Deposit. This is the fee an issuer has to pay for issuing 10 Short Term Instruments including CDs in demat form. This fee is computed on the basis of a financial year.
- On receipt of the above documents, NSDL will allot the ISIN for the security and the same will be communicated to the Issuer. A single ISIN will be allotted for CDs having the same maturity date irrespective of the date of allotment.
- Atleast two days before the value date (the date on which the CD has be credited in the subscriber's account) send the duly completed Master Creation Form (MCF) to NSDL. The ISIN will be activated by the next day.
- Co-ordinate with the R& T agent for execution of the Corporate Action. The Corporate Action has to be executed atleast one day prior to the value date.
In case an ISIN already exists for the maturity date, the Issuer is not required to send a Master Creation form. The Issuer can directly send the corporate action information for allotment of CDs in the existing ISIN.
- On execution of the Corporate Action the investors account will be credited with the securities
The above process flow is applicable only for the activities related to NSDL. The Issuer is responsible to ensure that issuance of CDs' is in accordance with the FIMMDA Guidelines , details of which are available on the " web site of FIMMDA
As per RBI guidelines, CDs can be issued in denominations of Rs. 1 Lakh or multiples thereof. The direct electronic credit / transfer request have to be made in terms of Quantity of securities with each security having face value of Rs. 1,00,000/-. For example - If a DP receives demat request for Rs. 1 cr, DP will enter 100 (securities) in the quantity field. Thus balances of securities in the statement of account represent number of securities each having face value of Rs. 1,00,000/-. For example, if an investor holds 100 securities, the value of this holding is Rs. 1cr of Certificate of Deposit.