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Frequently Asked Questions(FAQ)
It depends upon the convenience of the investor whether one wants to open a separate account for commercial paper. NSDL has no restriction if existing account/different accounts are used for dematerialisation of commercial paper.
The investor can subscribe to minimum of Rs. 5,00,000/- or multiples thereof as the face value of a Commercial Paper in the NSDL system is taken as Rs. 5,00,000/-.
Dematerialisation is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor's account with his DP.
Investor shall submit the commercial paper alongwith demat request form (which is available with DP) to the DP. Only those commercial paper, which have been made available for dematerialisation by its Issuer, can be dematerialized. However, As per the RBI Monetary and Credit Policy 2001-02, with effect from June 30, 2001, banks, FIs, PDs and SDs will be permitted to make fresh investments and hold CP only in dematerialised form and outstanding investments in scrip form should also be converted into demat by October, 2001.
No. Single statement of holding will reflect all holdings in a particular account irrespective of type of instrument. Along with Statement of Holding, the DP's will also provide periodically each client with a Statement of Transaction giving the details of all transaction during the period under each depository account.
Buyer and Seller decide upon price and quantity of securities to be transacted. Seller authorises its DP through Delivery Instructions to debit his account and transfer the securities into the account of Buyer who may have opened account with the same or any other DP. Buyer receives the securities in its account immediately if the buyer has provided standing instruction to its DP. Settlement of funds is between the parties and is as per their mutual convenience.
NSDL does not charge any fee for dematerialisation of certificates from depository participants. As regards settlement fees, NSDL charges the DPs and not the investors. NSDL's charges to its DPs are fixed and are based on the usage of NSDL system. Complete details of NSDL charges as are payable by the DPs are available on NSDL website (www.nsdl.co.in).
Investors will have to provide demat account number alongwith DP ID to the issuer. Issuer will provide these details to the IPA. The issuer will provide NSDL the IPA certificate and other documents required by NSDL to credit the IPAs CP allottment account one day prior to the value day. On the allotment date, the IPA can transfer the securities from its allotment account to the subscribers account.
The IPA has to open a redemption account with Depository Participant. The beneficiary holder should transfer the securities before 3.00 p.m on one working day before the maturity date so as to give sufficient time for the IPA to process the papers and arrange to effect the payment on the due date of the CP. The balance in the redemption account is extinguished by carrying out debit-type corporate action, on the IPAs confirmation to NSDL, of payment to beneficiary holders. On receiving the confirmation from the IPA, the process will be initiated by Share Registrar in co-ordination with NSDL.
Commercial paper can be issued in multiples of Rs. 5 lacs. The face value of the CP by default will be taken as Rs. 5 lakh in the NSDL system. The securities (CP) will be credited in the investor's account in terms of units. For eg. If the investor invests 5 crore issue in a CP issue, then 100 units will be credited his account.
IPA will open Redemption account with the DP at the time of issue of Commercial paper in demat mode. A copy of the IPAs certificate, which will be provided to the beneficial owner by the IPA, will contain details of the redemption account. For all secondary market transaction the seller will forward the copy of IPA certificate to the buyer.