National Securities Depository Limited
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Statistics

Statistics

June 30, 2019

arraw Investor Accounts - 1,87,40,325
arraw DP Service Centres - 31,235
arraw Demat Custody Value - 187.40
(₹ Lakh Crore)(US$ 2,719 billion)
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FAQ

 

A depository can be compared to a bank. A depository holds securities (like shares, debentures, bonds, Government Securities, units etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.

A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP. This is similar to opening an account with any branch of a bank in order to utilise the bank's services. Suggestions on how to select a DP are given in Section IV.

 
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  • The benefits of participation in a depository are:
    • Immediate transfer of securities;
    • No stamp duty on transfer of securities;
    • Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.;
    • Reduction in paperwork involved in transfer of securities;
    • Reduction in transaction cost;
    • Nomination facility;
    • Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately;
    • Transmission of securities is done by DP eliminating correspondence with companies;
    • Convenient method of consolidation of folios/accounts ;
    • Holding investments in equity, debt instruments and Government securities in a single account;
    • Automatic credit into demat account, of shares, arising out of split/consolidation/merger etc.
 
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  • NSDL offers following facilities
    • Dematerialisation i.e., converting physical certificates to electronic form;
    • Rematerialisation i.e., conversion of securities in demat form into physical certificates;
    • Facilitating repurchase / redemption of units of mutual funds;
    • Electronic settlement of trades in stock exchanges connected to NSDL;
    • Pledging/hypothecation of dematerialised securities against loan;
    • Electronic credit of securities allotted in public issues, rights issue;
    • Receipt of non-cash corporate benefits such as bonus, in electronic form;
    • Freezing of demat accounts, so that the debits from the account are not permitted;
    • Nomination facility for demat accounts;
    • Services related to change of address;
    • Effecting transmission of securities;
    • Instructions to your DP over Internet through SPEED-e facility. (Please check with your DP for availing the facility);
    • Account monitoring facility over Internet for clearing members through SPEED facility;
    • Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.
 
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BSDA is like a regular demat account but with no or low annual maintenance charges

  • Individual persons meeting the following conditions may avail the benefits of BSDA -
    • Individuals who have only one demat account as sole or first holder (across depositories).
    • Individuals can be second or third having any other demat account(s).
    • Value of securities held in the demat account shall not exceed ₹2,00,000 at any point of time.
    • It is necessary to provide a mobile number and opt for SMS alert facility in order to avail BSDA.
  • The annual maintenance charges for BSDA, as stipulated by SEBI are as below:
    • No AMC if the value of holding is up to ₹50,000.
    • If the value of holding is more than ₹50,000 but less than ₹2,00,000, then AMC not exceeding ₹100 per year may be charged.
    • For the value of holding exceeding ₹2,00,000, DP may charge AMC as per its regular rates.

The value of the holding for this purpose is determined by the DP based on the daily closing price or NAV for the securities / mutual fund units. If value of holding in BSDA exceeds ₹2,00,000 on any day, DP may levy charges as applicable to regular accounts (non-BSDA) from that day onwards.

 
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Opening a demat account is quite simple. All you have to do is to approach a NSDL DP, which will help you to complete the formalities. You need to fill up a form, submit PAN card and proof of address. In addition, you need to provide details of your bank account.

After your demat account is opened, your DP will provide you DP ID and Client ID, a copy of your Client Master Report containing your demat account related details, tariff sheet and ’Rights & Obligations of Beneficial Owner and Depository Participant‘. DP ID is 8 characters long code, (example IN3XXXXX) allotted by NSDL to all DPs to identify them. Client ID is 8 digit long code used to identify the clients in the system. Combination of DP ID and Client ID makes your unique account number in the NSDL system.

You should verify the Client Master Report to ensure that all your details have been recorded correctly in depository system. If you want to trade in shares etc. (i.e. buy or sell), you would also need to open a Trading / Broking account with any SEBI registered stockbroker. There are many DPs which offer 3-in-1 arrangement for the benefit of investors (3-in-1 is a combination of demat account, trading account and bank account).

  • You can select your DP to open a demat account just like you select a bank for opening a savings account. Some of the important factors for selection of a DP can be:
    • Convenience - Proximity to your office/residence, business hours.
    • Comfort - Reputation of the DP, past association with the organization, whether the DP is in a position to give the specific service you may need?
    • Cost/ level of service - The service charges levied by DP and the service standards.

For list of DP locations and their comparative charge structure, please visit https://nsdl.co.in/joining/joincharges.php.

NSDL has specified certain basic eligibility criteria for becoming a DP. The criteria are similar or even higher in certain respects than the corresponding provisions of SEBI regulations. All the DPs are same in the sense they are appointed by NSDL only after grant of Certificate of Registration by SEBI to them. However, the type of services offered, service standards and charges for the services rendered may differ among DPs.

  • Once you have decided to open an account with a particular DP, you may approach that DP and fill up an account opening form. You would be required to provide your photograph and self-attested copy of following documents -
    • PAN Card (for Sikkim residents who may not have PAN, other proof of identity).
    • Proof of address (any one of Passport, Driving license, Voter’s Identity card, Aadhaar card and NREGA job card).
    • Copy of cancelled cheque or passbook or bank statement containing your name, account number, IFSC and MICR code
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Please remember to take original documents to the DP for verification. In case you are unable to produce original document for verification, then photocopy should be attested by any authorized entity, like a public notary. Your DP may ask additional proof of identity / address to meet its requirements in addition to above-mentioned. The process of account opening is shown in the diagram number 3

Diagram 3

It is mandatory to establish the identity of the applicant at the time of opening account as per SEBI guidelines. This is done by the DP’s staff by verifying the affixed photograph on account opening form and the photo seen on document on PAN card with the person seeking to open the account. For Joint account holders, the ’in-person verification’ is required for all the holders.

Yes. You can open more than one account with the same DP. There is no restriction on the number of accounts you can open with a DP.

No. The depository has not prescribed any minimum balance. You can have zero balance in your demat account.

Providing bank account details at the time of demat account opening is mandatory. These bank details are communicated to issuer companies / RTAs for the purpose of crediting any amount payable to you (such as dividend, interest or maturity payment or redemption amount) directly in your bank account. It is therefore suggested that you provide details of your active bank account in the account opening form. Later, in case of change therein, please remember to inform to your DP.

In demat account, debit or credit transactions are permitted only if it is duly authorized by the respective holder(s). As a Delivery Instruction Slip (DIS) is required for every debit transfer in the demat account, a 'Receipt Instruction Slip' is required for every credit transfer in the demat account. By giving a onetime standing instruction to your DP, you may avoid giving receipt instruction to your DP whenever a credit is expected in the account.

No. As per rules applicable at present, demat account cannot be operated on 'either or survivor' basis like the bank account. Therefore, every instruction given for a jointly held demat account needs to be signed by all the joint holders.

Yes. In case you have multiple demat accounts with one or more DPs and do not wish to continue with them, you may submit account closure form to your DP(s) in prescribed format. In the form, you are required to mention DP ID, DP name and Client ID of the account where you wish the balances to be transferred. Your DP will transfer all your securities as per your instruction and close your demat account. It is important to understand that a demat account cannot be closed if there is any balance in the account.

  • There are numerous uses of your NSDL demat account. Few important things that you can do with your NSDL demat account are listed below -
    • You may apply for IPOs and NFOs. Do not forget to mention your DP ID and Client ID correctly in the application form. Same demat account can be used to purchase and hold shares and other types of securities.
    • You will automatically receive all corporate benefits (bonus, rights issue, etc.) in your demat account. Cash benefits like dividend declared by your company, interest or maturity amount payable on your bond investments etc. would be credited to bank account linked with your demat account. Please ensure correct bank account details are recorded in your demat account.
    • You may use your demat account to avail 'loan against shares' facility which is offered by many banks etc. to meet your financial requirements without requiring to sell the investments.
    • You may convert all your investments in shares, bonds, debentures, government securities, sovereign gold bonds etc. held in paper form to demat form through your DP.
    • You may hold your mutual fund investments in the same demat account. Holding mutual fund units in demat account makes things a lot easier for you. You would be able to monitor your portfolio at one place through NSDL CAS. It also saves you from the need to engage with various mutual fund houses if you want to make any change in your personal information, for example, address or bank details or nominee, etc. You may subscribe to mutual fund units in demat form by simply mentioning your DP ID and Client ID in application form. Investment in mutual funds by way of SIP is also possible through your demat account. For redemption or repurchase of mutual fund units, you may give an instruction to your DP or may use NSDL's SPEED-e facility.
    • You may participate in buyback offer by tendering your shares to company through your demat account.
    • You may participate in securities lending and borrowing scheme by lending securities lying idle in your demat account and may earn market returns.
 
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Nomination is a simple process by which a holder of securities communicates his / her preference regarding who should receive these securities in case of his / her death. Process of nomination in respect of demat account can be done at the time of opening of demat account or any time later.

Nomination can be made only by individuals holding demat account singly or jointly. Non-individual holders like society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family and holder of Power of Attorney cannot nominate.

Yes. Nomination is permitted for accounts with joint holders. However, in case of death of any of the joint holder(s), the securities will be transmitted to the surviving holder(s). Only in the event of death of all the joint holders, the securities will be transmitted to the nominee (if nomination given, else to legal heir).

Yes, NRI can nominate directly. However, the power of attorney holder cannot nominate on behalf of NRI.

No. Minor cannot nominate either directly or through his / her guardian.

Only an individual can be a nominee. Non individuals like society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family or a Power of Attorney holder cannot be a nominee in the demat account.

Yes, at present up to three nominations can be made for one demat account. In case, two or three nominees are mentioned, then it is also required to mention the proportion (%) in which various securities are desired to be transmitted upon death of the account holder.

Yes, a minor can be a nominee. Whenever, a minor is mentioned as a nominee in a demat account, details of his / her guardian should also be mentioned.

No. Nomination can be made account wise and not security wise. This means, in case of death of account holder, all the securities lying in the demat account, are liable to be transmitted to nominee(s) in the pre-registered proportion. If you wish different nominees for different securities, then you may consider keeping the securities in different demat accounts and mention nominee(s) as per your choice.

Yes, NRI can be a nominee in a demat account subject to the provision of foreign exchange regulations in force.

The demat account holders need to mention the information related to nominee(s) in the account opening form at the time of account opening. Up to three different individuals may be mentioned as nominee in one demat account.

In case, nomination was not done at the time of account opening or was done but account holder(s) wants to change it anytime later, then a ‘Nomination’ form needs to be filled up and provided to DP.

Yes, the nomination can be changed anytime by the account holder(s) by simply filling up the nomination form once again and submitting it to the DP.

Nomination is not mandatory for demat account. However, it is very much recommended to have nominee mentioned in the demat account. In the unfortunate case of death of sole account holder, it makes the process of transmission very easy and fast. In you do not wish to mention any nominee at the time of account opening, you are required to state that “I/We do not wish to make a nomination”.

 
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Transmission is the process of law by which securities belonging to a deceased account holder are transferred to surviving joint holder(s) / legal heirs / nominee of the deceased account holder. Process of transmission in case of dematerialized holdings is relatively convenient as the transmission formalities for all securities held in a demat account can be completed by submitting the requisite documents to DP. There is no need to approach various companies for this purpose, as is required when securities are held in physical form.

Upon death of account holder (sole holder or joint holder), how the transmission will take place, is described in the diagram number 6 -

Diagram 6Diagram 6

In case of the death of the sole holder, for transmission of securities, the nominee needs to submit duly filled-in transmission form along with a copy of the death certificate duly attested by a Notary Public or a Gazetted Officer. In case the account of the claimant is not with the same Participant, copy of Client Master Report of the account of the claimant (certified by the concerned DP) is also required. After verification of these documents, the DP will transmit the securities to the demat account of the nominee.

  • In such a case, the securities would be transmitted to the account of legal heir(s), as may be determined by an order of the competent court. Following documents are required for this purpose -
    • Duly filled in Transmission Form.
    • Copy of the death certificate duly attested by a Notary Public or by a Gazetted Officer.
    • A copy of the Succession certificate duly attested by a Notary Public or by a Gazetted Officer or
    • An order of a court of competent jurisdiction where the deceased has not left a Will or
    • A copy of the Probate of Will or
    • Letter of Administration duly attested by a Notary Public or by a Gazetted Officer.
    • In case the account of the claimant is not with the same Participant, copy of Client Master Report of the account of the claimant is also required (certified by the concerned DP).
  • However, if the value of securities to be transmitted is below ₹5,00,000/- (on the day of application for transmission), the DP may process the request based on following documents:
    • Duly filled in Transmission Form.
    • Copy of the death certificate duly attested by a Notary Public or by a Gazetted Officer.
    • Letter of Indemnity (in prescribed format).
    • Affidavit (in prescribed format) and
    • No Objection Certificate(s) in prescribed format or Family Settlement Deed.
    • In case the account of the claimant is not with the same Participant, copy of Client Master Report of the account of the claimant is also required (certified by the concerned DP).
  • In such a case, the securities would be transmitted to the surviving holder(s), irrespective of the nomination. For example, if the account is in the joint names of Mr. A, Mr. B and Mrs. C, in the event of the death of Mr. B, the securities will be transmitted to surviving holders that is, Mr. A and Mrs. C. The surviving holder(s) would need to submit the following documents to the DP:
    • Duly filled in Transmission Form
    • Copy of the death certificate duly attested by a Notary Public or by a Gazetted Officer.

After verifying the above documents and satisfying himself, the DP will transmit the securities to the surviving holder(s) account and will close the account of the deceased

'Transmission cum Demat' is a very useful facility when one of joint holders mentioned in securities held in physical form and remaining holder(s) wish to have the securities transmitted in their name in demat form. Using this facility the twin objectives of deletion of name of one of the deceased joint holders and dematerialization of securities can be achieved in a single step. This is explained in diagram number 7 - Diagram 7

Diagram 7
 
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Dematerialization is the process by which physical certificates of securities are converted into securities in electronic form by way of credit in investor's demat account held with a DP. Dematerialization is change in form of holding, it does not result into change of ownership.

In order to dematerialize certificates, you need to open a demat account. Once the demat account has been opened, you need to fill up a 'Dematerialization Request Form' in prescribed form and submit it to your DP along with the security certificates. Your DP will forward the demat request to the concerned issuer company or its Registrar and Transfer Agent for further processing. Once the request is confirmed by the concerned issuer company or its Registrar and Transfer Agent, it results in credit of electronic securities in the demat account of the respective investor. The process of dematerialization is shown in the diagram number 4.Diagram 4

Diagram 4
  • No, not all the share certificates can be dematerialized. For dematerialization, following conditions should be met with -
    • You can dematerialize only those share certificates that are already registered in your name in records of issuing company / its RTA
    • The Issuer company should have joined NSDL and obtained an ISIN for those shares
    • Shares should be free from any lien or charge or encumbrance.

Most of listed and active companies have already joined NSDL and their shares and other types of securities are available for demat. Many other companies are in the process of joining NSDL. You may search if the shares held by you are available for demat or not, at https://nsdl.co.in/master_search.php.

  • You should take care of following -
    • Verify that you are the registered owner of the securities.
    • Pattern of ownership of securities is same as that in demat account from which you wish to initiate the demat request. (Refer to answer for Q. 13 below if pattern is different).
    • Verify that securities you wish to dematerialize are indeed available for demat in NSDL.
    • Verify that the RTA has not stopped services to the company of which you are holding the shares. This can be searched at https://nsdl.co.in/list-comp.php.
    • After above steps, you may mark the share certificates that you wish to dematerialize with words 'Surrendered for Dematerialisation'. Your DP will provide you the rubber stamp to be used for this purpose.

After ensuring that the certificates have been duly marked as above, you may submit the DRF to your DP along-with the share certificates for further processing.

As per SEBI's guidelines, DP is required to process the demat request received by it within 7 days. Further, issuer company / its RTA may take up to 15 days to process the demat request received by them. Considering the time required for transmission of documents from DP to issuer company / RTA, dematerialization will normally take about 30 days.

No. The demat account must be opened in the same ownership pattern in which the securities are held in the physical form. For example, if one share certificate is in your name and another certificate has your name along with your wife's name, then you would need to open two demat accounts (one in your name and other in joint names of yourself and your wife).

The Depositories Act, 1996 gives investors an option to hold securities in physical form or demat form. Hence, if you do not intend to sell the securities, you may not dematerialize them. However, holding the securities in demat form entails numerous benefits and is therefore highly recommended. Further, there are existing / proposed restrictions on transfer of securities belonging to listed companies and unlisted public limited companies, if held in physical form. It may therefore be better to dematerialize the securities.

Yes. You can dematerialize your tax-free bonds even when they are under lock-in. The process of demat is similar to that applicable to demat of shares. You need to submit duly filled in and signed DRF to your DP along with bond certificates. DP will forward the request to concerned issuer / its RTA and upon confirmation, credit will be received in your demat account.

Yes. Now the market of government securities like bonds and Treasury Bills (T-Bills) is easily accessible to retail investors. In fact, RBI does keep a portion of new issues reserved for retail investors. You may invest in G-Sec by participating in auction of new securities or by purchasing already issued securities in secondary market. For both, you need to approach any authorized bank or primary dealer or stock broker, mentioning your demat accounts details (DP ID and Client ID).

The SGB offers a superior alternative to holding gold in physical form. Option to hold SGB in demat form makes it even better and convenient. The process to buy or subscribe to sovereign gold bonds in demat form is quite easy. All you need to do is to mention your DP ID and Client ID in your subscription form. Some banks offer online application facility also (if investor makes application online and does payment electronically, then some price discount is also available at present). Upon allotment by RBI, your demat account will credited with the requisite number of bonds.

Yes, you may do so. For this purpose, you need to contact the bank / agent from whom you had purchased the SGBs. They will assist you in conversion of SGBs held in form of Certificate of Holdings into demat form.

Yes. You need to provide a duly filled in and signed request in prescribed format (known as Dematerialization Request Form - Government Securities) along with 'Form of Transfer' to your DP. Your DP will forward the request to NSDL. NSDL will arrange for necessary credit in your demat account.

The joint holders are entitled to change the sequence of names by making a written request to the company. This does not constitute a transfer. Changing the sequence of joint holders is called 'Transposition'. However, transposition facility can be availed for entire holdings in a folio and not allowed for part of the holdings.

If the same set of joint holders hold securities in different sequence of names, then there is no need to open multiple demat accounts for dematerialization of such securities. Using 'Transposition cum Demat facility' such securities held vide certificates in different combinations, can be dematerialized in one demat account. For this purpose, Dematerialization Request Form (DRF) and an additional form called 'Transposition cum Demat Form' should be submitted to the DP. This is explained in the diagram number 5 - Diagram 5

Diagram 5
 
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Yes. You can dematerialise and hold all such investments in a single demat account.

 
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Yes. If you wish to get back your securities in physical form, you need to submit 'Rematerialisation Request Form' in prescribed format to your DP. After necessary checks, your DP will forward your request through NSDL's depository system to the concerned Issuer company / RTA. The company / RTA will print the certificates and dispatch the same to you directly. You should check the rematerialisation charges with your DP before submitting the request.

 
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  • The procedure for selling dematerialized securities is very simple, as given below -
    • You need to give a sell instruction to your stockbroker.
    • Once your sell order has been executed and you receive confirmation of execution of your order, you are required to provide the securities sold to your stockbroker to meet your pay-in obligation. For this purpose, you need to submit a duly filled in 'Delivery Instruction Slip' to your DP within the time frame prescribed by your DP.
    • The DIS should contain instruction to your DP to debit your account with the number of securities sold by you and credit your broker's clearing account. Alternatively, NSDL SPEED-e service can be used to give electronic instruction online.
    • Once the instruction is successfully processed by your DP, your broker will get the shares and will arrange securities pay-in to the clearing corporation.
    • Upon receipt of (funds) payout from the clearing corporation, your broker will arrange the credit of due sale proceeds to your linked bank account.
  • The procedure for buying securities in demat form is very simple, as given below -
    • You need to give purchase instruction to your stockbroker.
    • Once your buy order has been executed and you receive confirmation of execution of your order, you are required to provide the due amount to your stockbroker to meet your (funds) pay-in obligation.
    • Your broker receives credit of securities in its clearing account on the (securities) pay-out day.
    • Your broker gives instruction to its DP to debit its clearing account and credit your demat account for the securities bought by you.
    • If you have not given standing instruction in your demat account, then you will need to give 'Receipt Instruction' to your DP for receiving credit.
    • You should ensure that your broker transfers the securities to your account, before the book closure. If the securities remain in the account of your broker, the company will give corporate benefits (dividend, bonus etc.) to the broker. In that case, you will have to collect the benefits from your broker.

Any trade settled through a clearing corporation is termed as a 'Market Trade'. These trades are done through stockbrokers on the platform of a recognized stock exchange. An 'Off Market Trade' is one which is settled directly between the two parties, without the involvement of clearing corporation.

Transfer of securities from a demat account held with one depository to another demat account held with a different depository is known as 'Inter Depository Transfer' (IDT). IDT is possible for those ISINs which are active in both the depositories

In case you give a pay-in instruction for quantity which is more than the quantity available in demat account at the time of settlement of the instruction, then your demat account is debited to extent of balance available. In case of off market transfer, if sufficient balance is not available then the entire instruction fails, meaning that debit does not take place.

On every stock exchange, various transactions happen under different trade windows. These windows are identified by a distinct combination of a market type and a settlement number. It is important that you mention correct market type and settlement number (together said to be settlement details in depository system) in the delivery instruction slip so that your pay-in obligations are settled correctly. These details can be found in the contract note issued by the broker

Under T+2 rolling settlement system, trades (buy and sell) happening on the platform of stock exchange on day 1 (T) are settled by the concerned clearing corporation two days later, means on the day 3 (T+2). For example, trades undertaken on Monday will be settled on Wednesday (presuming all days are working days). Similarly, all trades undertaken on Tuesday are settled on Thursday, so on and so forth. This kind of settlement system is known as T+2 rolling settlement.

Clearing corporations prescribe timelines for pay-in and payout of securities as well as funds for each settlement. Stockbrokers are required to adhere to them. In order to enable them to do so, DPs in turn prescribe time lines for securities pay-in for clients doing the sell trades (funds settlement happens through banks and therefore, is out of depository system).

As the trade has happened on Monday, pay-in of securities will take place on Wednesday, meaning your broker must get the securities before the clearing corporation prescribed time on Wednesday. As your DP will need some time to process the delivery instruction slip given by you, it would have prescribed some timeline for submission of pay-in related instructions (typically previous day of pay-in day). You need to ensure that your delivery instruction slip reaches your DP well before the given time and day. It may therefore be better to submit your delivery instruction slip to your DP immediately once you receive confirmation of your sell order from your broker.

Your DP will prescribe the timelines to be followed by you for submission of delivery instruction slips and communicate to you. These are generally printed on the DIS booklet given by the DP also for your information.

The broker is required to transfer the securities to you within one working day, after securities are received in its clearing member account, provided you have made the requisite payment to the broker.

Every DP prescribes some timelines for submission of delivery instruction slips. If it happens that your instruction slip reaches your DP after such deadline time, your DP can accept it with limited liability for its execution in the depository system. In such cases, DPs do mark the instruction slip (client copy as well as their office copy) with stamp containing description similar to 'Received late, Subject to best efforts' or 'Late, received at Client's risk'. If for some reason, DP is unable to execute the late received instruction in depository system successfully, and this results into client failing to meet its pay-in obligation, leading to financial loss (auction charges etc.), DP cannot be held liable for such loss.

  • Delivery Instruction Slips are similar to your bank account cheque book. You should take care of following points in respect of DIS -
    • Ensure that you receive DIS book from your DP. Do not accept loose slips (unless required so in urgent situations).
    • Ensure that each DIS is pre-printed and serially numbered.
    • Ensure that your Client ID is pre-stamped or pre-printed on each DIS.
    • Do not leave your DIS with anyone else. Fill it and hand it over to your DP when you need to do so
    • Keep your DIS book safely. In case you happen to lose or misplace any slip or booklet, please inform your DP immediately in writing.
    • If DIS has place (lines) to mention more than one instruction and you are not using all of them, then please remember to strike out the unused lines / space before handing it over to your DP to prevent misuse by any.
    • Please ensure that the instruction slip is duly filled in with all required details and signed by all the joint holders before handing it over to your DP.

Execution date is the date on which securities will be actually debited from your account. In order to ensure that the instruction gets executed on the execution date written on the delivery instruction slip, it must be entered by DP in the depository system. You may issue the instruction well in advance of the date on which you want the securities to be debited from your account (your account will be debited only on the execution date mentioned in DIS).

By giving a future dated instruction the risk of non-execution of instruction due to lack of time or last minute rush is avoided. You may like to use this facility to ensure that shares etc. are transferred to intended beneficiary's account on a day of your choice.

  • As per SEBI's guidelines, the reason or purpose for which the off market transfer is undertaken and consideration for such transfer, needs to be mentioned on the delivery instruction slip submitted for such transfer. There are various options given in the DIS booklet for 'Reason / Purpose'. You need to select the appropriate one and mention it on the DIS. If the Reason / Purpose of the transfer is 'off market sale' then in addition to amount of consideration, you need to mention the following details also -
    • Date of payment.
    • Mode of payment (cash, cheque or electronic payment).

In case mode of payment is cheque or electronic payment, transferee's name, bank account number, bank name, transaction reference number for electronic payments or cheque number for cheque payments are required.

 
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Yes. NSDL has recently launched a facility for delivering instructions to your DP over Internet , called SPEED-e. The facility can be used by all registered users. Your DP will help you in registering for the facility.

You can submit delivery instructions electronically, on the SPEED-e website https://www.speed-e.nsdl.com, after your DP has authorised you to operate your account through the SPEED-e facility. You can monitor the status of such delivery instructions to ensure that the instructions have been executed.

The benefit offered by SPEED-e to a demat account holder / Clearing Member is the convenience of conducting demat account transactions using an Internet connection from anywhere at anytime eliminating paperwork. Time and efforts for obtaining delivery instruction forms from your DP and submitting them to the DP everytime you sell securities is saved.

For using the SPEED-e facility it is essential that your DP must be registered with NSDL for this facility. There are two types of users for this facility , one is password based user who logs in with his password and can transfer securities only to three pre-specified broker accounts of his choice. The second is the smart-card based user who is issued a smart card for logging on to the site and can transfer the securities to any account. A password user can visit the SPEED-e website, fill-up the registration form available on the website. The website would allot a registration number and the DP of the client would authorise him for using the facility upon submission of a request with the registration number.

A smart card user can download the form from the website, fill it and submit the same to its DP. The DP will process the form and enable the client for using the facility. The smart card user will also be issued a smart card reader and a smart card.

Smart card based access to SPEED-e is more secure as your identification is based both on "What you have i.e. smart card" and "what you know i.e. PIN code" and provides a digital signature to identify you. In the case of password based access , you should handle your password carefully. In view of this security difference, the password based users have been permitted to transfer securities through SPEED-e facility to only three pre-specified broker accounts. These three accounts can be changed by the user.

  • Following are the additional benefits of smart card option in SPEED-e facility :
    • smart card user can transfer securities to any account unlike password users where transfer of securities is permitted only to three pre-notified broker accounts;
    • single smart card can be used to access all your demat accounts, opened with the same DP;
    • facility of multiple authorisation;
    • you can freeze your demat account or any particular ISIN or specific quantity within an ISIN yourself, through SPEED-e. The account freezed using SPEED-e can be unfreezed only by you.

Thereby you can deliver instructions and transfer securities when you wish, lock the account and unlock it only when you need, i.e. complete control of your account in your hands.

For password based operation, only one user can operate the account. Joint holders will have to give a power of attorney to one joint holder among themselves. For smart card based operation, in addition to what is stated above, all the joint holders can operate the account independently or jointly using multiple authorisation facility.

 
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The concerned company obtains the details of beneficiary holders and their holdings from NSDL. The payment to the investors will be made by the company through the ECS ( Electronic Clearing Service) facility or by issuing warrants on which your bank account details are printed. The bank account details will be those which you would have mentioned in your account opening form or changed thereafter.

The concerned company obtains the details of beneficiary holders and their holdings from NSDL. Your entitlement will be credited by the company directly in your NSDL depository account.

An allotment advice will be sent by the Issuer/ its R&T agent for bonus/ rights entitlement. The Transaction Statement given by the DP, will also show the bonus/ rights credit into the account. The quantity shown in the advice and statement of transaction should match.

 
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Pledging is basically committing the shares held by a person (pledgor) in favour of another person (pledgee) as a security or collateral for the exposure granted by pledgee. Generally, shares are pledged by the concerned shareholder for taking loan against shares.

  • The procedure is as follows:
    • You need to arrive at a deal with the bank in terms of loan amount, tenure, rate of interest and kind of securities offered as collaterals, etc. The commercial aspects of such deal are subject matter of mutual negotiation and hence outside the purview of Depository.
    • Both of you (pledgor) and bank / lender (pledgee) must have demat account with the same depository (with same or different DPs).
    • You as pledgor need to initiate the pledge by submitting a duly filled up ‘Pledge Initiation Instruction Slip’ to your DP.
    • Once your DP processes your instruction, the details can be seen (or searched) by the DP of the bank / lender (pledgee). Then Pledgee needs to give duly filled in ‘Pledge Confirmation Instruction Slip’ to its DP. (Alternatively, pledgee may opt to have automatic pledge confirmation facility in its demat account). Upon execution of such instruction, the pledge will be created in the depository system.

Once the pledge instruction is confirmed in depository system, the underlying securities are blocked in the demat account of pledgor. Until this block remains, pledgor is disabled from disposing of those securities.

Upon repayment of loan, pledgor should submit a duly filled in ‘Pledge Closure Initiation Slip’ to its DP. Once executed, the information is forwarded to DP of the pledgee. The pledgee then may submit ‘Pledge Closure Confirmation Instruction’ to its DP. (Alternatively, the pledgee may give instruction to its DP to close the pledge without waiting for request from the pledgor).

Once pledge is closed, the block created on the underlying securities is removed and they become available once again for disposal by the erstwhile pledgor.

Yes, if the pledgee (lender) agrees, you may change the securities offered in a pledge. For this purpose, a new request for creation of pledge will have to be given by the pledgor and the existing pledge needs to be closed.

The pledgor continues to be the beneficial owner of the underlying securities during the period of pledge. Therefore, all the corporate benefits declared by the company during this period belong to pledgor. The pledgee will get the benefits if pledge is invoked and on record date, the shares remain in pledgee’s account.

If the shares are in pledged status on the record date, bonus shares are credited to pledgor’s account with pledge marked in favour of the pledgee. Later when the pledge is closed, all the shares (including the bonus) will be credited to the pledgor’s account as free balances. In case of invocation of pledge, all the shares (including the bonus) will be moved to pledgee’s account.

Digital LAS (Loan Against Shares) is a facility enabled by NSDL for making the process of loan against shares online. Using this facility, a demat account holder can obtain finance (loan) against pledge of eligible securities held in demat account in favour of lending bank. For more information on this, you may check with a participating bank.

In depository system, there is no difference between pledge and hypothecation except that pledge can be invoked by the lender (pledgee). Whereas, in case of hypothecation, for invocation to take place, consent of borrower (hypothecator) is also required.

 
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Securities Lending and Borrowing Scheme (SLBS) is a mechanism by which short sellers can borrow the required securities on the stock exchange platform to meet their delivery obligations or as collaterals. This scheme is run by clearing corporations which are registered as ‘Approved Intermediaries’.

Stockbrokers who register themselves as ‘Participant’ with the Approved Intermediary, may participate in SLBS for their own account or on behalf of their clients. Retail investors may participate in the scheme through their stockbroker as lender or borrower. Lending and borrowing are effected through the depository system on a T+ 1 settlement basis. SLBS is permitted in dematerialized form only.

SLBS is a market based system which helps to meet the temporary need of the securities. Short sellers may meet their delivery obligation or collateral requirement by borrowing the securities from the market. Lenders on the other hand are able to earn lending fee by lending the securities lying idle in their portfolio.

Yes. You can lend your securities through your stockbroker who has registered itself as ‘Participant’ with the ‘Approved Intermediary’ (clearing corporation). You need to enter into a standard agreement with your stockbroker.

The tenure of lending and borrowing may be between 1 to 12 months. However, lenders and borrowers do have the option of recall of securities and early return of securities, respectively.

No. Securities, which are available for trading in Futures and Options segment of the stock exchange, are available for lending and borrowing at present. The list of securities eligible under SLBS are periodically announced by the respective approved intermediaries.

You may place your order to your broker for lending the securities. Your broker will enter the order on the platform of the stock exchange. After successful execution of the order, you will need to give delivery instruction slip to your broker for the purpose of payin.

Borrower of securities may return the securities at the end of the agreed period of lending or before it (if foreclosure of transaction is permitted by approved intermediary for that security). Upon return, securities will be credited to your demat account through your broker or directly by the clearing corporation.

Securities in which there are corporate actions are subject to either foreclosure of transaction or adjustment depending on the type of corporate action. All transactions in case of corporate actions other than dividend and stock-spilt are foreclosed on the ex-date. In case of dividend, the dividend amount is collected from the borrower by clearing corporation and paid to the lender. In case of stock split, the position of the borrower is proportionately adjusted and the lender will receive the revised quantity on the reverse leg settlement date.

You may place your order with your broker specifying the details like name and quantity of securities required, borrowing period). Your broker will enter your order in exchange platform. Upon receiving the pay-out, your broker will arrange the credit of securities in your demat account. You will need to return the borrowed securities at the end of period (or before it, if so desired and permitted by the approved intermediary).

 
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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). The DP charges its client for the services offered. The charges that the DP will be charging you for various services are mentioned in the Schedule of Charges which forms a part of the account opening agreement. You may keep a copy of this for your future reference. You can get the details of the charges from the DPs. You can also get a comparative list of DP charges from NSDL's office or from the NSDL website.

Your DP may revise charges by giving you 30 days notice in advance.

 
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Your DP will give you a Transaction Statement periodically, which will detail your current balances and the various transactions you have done through the depository account. If you so desire, your DP may provide Transaction Statement at intervals shorter than the stipulated ones, probably at a cost.

You will receive a Transaction Statement from your DP once in a quarter. If you have done any transaction during the quarter, you will receive the statement within fifteen days of the transaction.

In case of any discrepancy in the transaction statement, you can contact your DP. If the discrepancy cannot be resolved at the DP level, you should approach NSDL. NSDL also sends out a statement of holdings to a few clients of DPs, picked at random. In case the balance in your account as indicated by your DP does not tally with the balance as indicated by NSDL, you can contact your DP/ NSDL for clarification.

You should inform your DP and obtain a duplicate Transaction Statement.

No transaction can be effected in your account without your written authorisation. Further, if you are away for a long time, you have the facility of freezing your account wherein only credits into your account will be allowed and no debit will be possible.

In a rare event of your DP going bankrupt or closing the operations, the interests of the investors will be fully protected. In such a situation, the investors will be given an option of either transferring the securities to a new DP or they may rematerialise the securities.

  • The data carries a high importance in the NSDL depository system. NSDL has taken necessary steps to protect the transmission and storage of data. The data is protected from unauthorised access, manipulation and destruction. The following back up practices are adopted to protect the data:
    • Local Back up
    • Remote Back up
    • Disaster Recovery Site

In addition to this, every DP is required to take daily back up, at the end of each day of operation

NSDL system provides the facility to freeze the depository accounts for any debits or for both, debits and credits. In an account which is "freezed for debits", no debits will be permitted from the account, till the time it is unfreezed.

In case of failure of a DP to resolve your grievance, you can write to the investor grievance cell of NSDL at the following address:

The Officer in Charge
Investor Grievance Cell
National Securities Depository Limited

4th Floor, Trade World
Kamala Mills Compound
Senapati Bapat Marg
Email :

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