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1. Immediate transfer of securities;
2. Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.;
3. Reduction in paperwork involved in transfer of securities;
4. Reduction in transaction cost;
5. Nomination facility;
6. 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;
7. Transmission of securities is done by DP eliminating correspondence with companies;
8. Convenient method of consolidation of folios/accounts;
9. Holding investments in equity, debt instruments and Government securities in a single account;
10. Automatic credit of shares in demat account, arising out of split / consolidation / merger etc.

1. Dematerialisation i.e., converting physical certificates to electronic form;
2. Rematerialisation i.e., conversion of securities in demat form into physical certificates;
3. Facilitating repurchase / redemption of units of mutual funds;
4. Electronic settlement of trades in stock exchanges connected to NSDL;
5. Pledging/hypothecation of dematerialised securities against loan;
6. Electronic credit of securities allotted in public issues, rights issue;
7. Receipt of non-cash corporate benefits such as bonus, in electronic form;
8. Freezing of demat accounts, so that the debits from the account are not permitted;
9. Nomination facility for demat accounts;
10. Services related to change of address;
11. Effecting transmission of securities;
12. Instructions to your DP over Internet through SPEED-e facility. (Please check with your DP for availing the facility);
13. Account monitoring facility over Internet for clearing members through SPEED facility;
14. Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.

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. Alternatively, you can click on https://nsdl.co.in/Open_NSDL_Demat_Account.php to open your demat 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).

Now a days many NSDL DPs enable their clients to open demat account online, thus making the process paperless and extremely convenient.

• 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, visit https://nsdl.co.in/dpsch.php and for their comparative charge structure, visit https://nsdl.co.in/about/charges.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.

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 below -

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.

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.

For shifting or transfer of a demat account, you need to first open a new demat account where you want the balances to be transferred to (if you already have another demat account, then you may use it for this purpose, instead of opening a new account). Then you need to submit duly filled and signed ‘Account Closure Form’ to your existing DP. In the form, you should mention the details of the other demat account where you want the balances to be transferred. After verification of your request, your DP will arrange to transfer the balances to the desired account and then close the source account.

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 below –

Diagram

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.
• 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.

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 below -

Diagram

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.

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 , 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, Hindu Undivided Family 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''.

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 below –

Diagram

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.

'Transmission cum Demat' is a very useful facility when one of the joint holders mentioned in securities certificate (held in physical form) has died 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 the diagram

Diagram

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.

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).

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.

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.

Yes. Margin pledge instruction can be given electronically through NSDL e-services – SPEED-e platform.

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.

• 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 ₹4,00,000 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:

  Sr. No.	Value of Debt Securities (₹)	Value of Other than Debt Securities (₹)	Total Value of Holdings (₹)	AMC
  1	50,000/-	50,000/-	1,00,000/-	No AMC
  2	1,00,000/-	50,000/-	1,50,000/-	No AMC
  3	1,50,000/-	50,000/-	2,00,000/-	Maximum 100
  4	1,50,000/-	1,00,000/-	2,50,000/-	Maximum 100
  5	2,00,000/-	2,00,000/-	4,00,000/-	Maximum 100
  6	2,00,000/-	2,50,000/-	4,50,000/-	As per Regular Account
  7	3,00,000/-	3,00,000/-	6,00,000/-	As per Regular Account
  8	2,50,000/-	2,00,000/-	4,50,000/-	As per Regular Account
  9	50,000/-	2,50,000/-	3,00,000/-	As per Regular Account
  10	2,50,000/-	50,000/-	3,00,000/-	As per Regular Account

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 the above limits on any day, DP may levy charges as applicable to regular accounts (non-BSDA) from that day onwards.

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 payable by the DPs are available at https://nsdl.co.in/about/charges.php.
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 ‘Rights and Obligations of Beneficial Owner and Depository Participant’. You may keep a copy of this for your future reference. You can also get a comparative list of DP charges at https://nsdl.co.in/joining/joincharges.php.

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

NSDL provides a consolidated account statement to you at monthly intervals (at quarterly intervals for BSDA holders) if there are transactions in the given month (quarter). In case there is no transaction in the account, or if the balance has become Nil during the year, the statement is sent annually to such clients.
For more information, please visit https://nsdlcas.nsdl.com/.

Any transaction in the demat account is possible only upon a valid instruction from the account holder. In addition, the entries in the depository software at DP’s end are possible through a maker checker system. Still in order to prevent any undesired transaction happening in the account, demat account holder may opt to freeze his / her demat account by submitting a written request to DP. The following types of freeze are available-

a. Freeze for debits only -
A demat account holder may freeze the account only for debits by submitting a freeze instruction to its DP. However, during the period of freeze, the account holder will continue to receive credits like bonus or credits arising out of any other corporate action.

b. Freeze for debits as well as credits -
An account holder may freeze the account for debits as well as credits. No debits and credits can be made in the account, unless the account holder issues unfreeze instruction. This facility is beneficial to clients who do not use their account for long period. By freezing their account for debits and credits, they can avoid undue credits to their accounts in addition to preventing debits.

c. Freeze particular ISIN(s) in the account -
An account holder may freeze a particular ISIN(s) (security of a specific company) either for ‘debit’ or ‘debit & credit’, without freezing the whole account. If this type of freeze facility is used, all other securities in the account can be debited or credited but the securities under the specific ISIN(s) will be frozen for ‘debit’ or ‘debit & credit’ respectively. The client will be able to use other securities lying in its demat account and also receive credits in the ISIN which has been frozen only for debit.

d. Freeze a specific number of securities held under an ISIN in an account-
An account holder may freeze a specific quantity of a specific security in an account.

Data security and data integrity are considered critical and given highest importance by NSDL. NSDL follows highest standards in this regard. DPs are also required to follow the best practices to ensure that clients’ data and assets remain protected.
Following are some of the measures adopted by NSDL in this regard -
a. Stringent requirement of daily back up of data at DP level as well as depository level.
b. Backup is stored locally and also at a remote site by DPs and depository both on a daily basis.
c. NSDL maintains a backup site as well as a Disaster Recovery Site to ensure continuing of operations in any case of disruption.
d. Best industry practices are followed with respect to data handling and cyber security framework.
e. Fall back mechanism for critical equipment, communication systems and utilities used for depository infrastructure.
f. Data is stored in state of art data center managed by professional and qualified specialists.
g. Logical and physical access barriers are adopted at various levels.
h. Maker checker system is followed for critical data entry in depository system.
i. NSDL has obtained ISO – 27001 certification (for Information Security Management) and ISO 22301:2012 certification (for Business Continuity Management Systems), indicating compliance with best industry practices.

1. Person of Indian Origin (PIO) means a citizen of any country other than Bangladesh or Pakistan, if
   1. he at any time held Indian passport; or
   2. he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955; or
   3. the person is a spouse of an Indian citizen or a person referred to in sub-clause [a] or [b].

Investment by PIO in Indian Securities is treated the same as the investment by non-resident Indians and requires same approvals and enjoys the same exemptions.

Overseas Corporate Body means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty percent by Non-Resident Indians and includes overseas trust in which not less than sixty percent beneficial interest is held by Non-Resident Indians directly or indirectly but irrevocably.

OCBs were debarred from Portfolio Investment Scheme w.e.f November 29, 2001. OCBs have been banned as a class of investor w.e.f September 16, 2003. However, they have been permitted to continue to hold the securities acquired by them prior to these dates. Accordingly OCBs may open a demat account, however it can be only for the purpose of dematerializing the existing holdings.

Under this scheme, NRIs are permitted to acquire shares/debentures of Indian companies or units of domestic Mutual Funds through the stock exchange(s) in India.

Investment can be made both on repatriation or non-repatriation basis. For making investment on repatriation basis, it will be necessary to make payments by way of inward remittance or by debit to the NRE / FCNR account of the NRI / PIO. Investment on non-repatriation basis can also be made by way of inward remittance or by debit to the NRE / FCNR / NRO accounts.

The sale proceeds of the repatriable investments can be credited to the NRE / NRO accounts of the NRI / PIO at the option of the investor, whereas the sale proceeds of non-repatriable investment can be credited only to NRO accounts.

The sale of shares will be subject to payment of applicable taxes.

• NRIs / PIOs can purchase / sell shares / convertible debentures of Indian companies on Stock Exchanges under the Portfolio Investment Scheme. The rules relating to this scheme are as given below
  • Shares purchased under PIS on Stock Exchange shall be sold on stock exchanges only. Prior approval of RBI is required if such shares are proposed to be transferred either by way of gift or under private arrangement to a non-resident/resident.
  • These trades can be done only through a registered broker on a recognised stock exchange
  • NRI shall designate a branch of an authorised dealer and route all his/her transactions through this branch of the authorised dealer.
  • NRI takes delivery of the shares purchased and gives delivery of shares sold.
  • NRI shall abide by the directions given by RBI/SEBI or such authority if the transaction results in the breach of ceilings stipulated for NRI holding in the company/scheme.

The sale of shares will be subject to payment of applicable taxes.

An NRI or a PIO can purchase shares up to 5% of the paid up capital of an Indian company. All NRIs / PIOs (also the OCBs who had purchased shares under the earlier scheme) taken together cannot purchase more than 10% of the paid up value of the company. (This limit can be increased by an Indian company to 24% by passing a General Body resolution).

The table given below summarizes the permissions required for the off-market transfer

* provided that the person to whom the shares are being transferred has obtained prior permission of Central Government to acquire the shares, if he has previous venture or tie up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called in the same field or allied filed in which the Indian company whose shares are being transferred is engaged.

• The following bank accounts may be given
  • For non-repatriable - NRO [dividend/interest is repatriable]
  • For repatriable - NRE

The above details recorded by the DP in the demat account may be used by the Issuer to directly credit dividend or interest.

(Dividend/interest received on Investments made on repatriation and non - repatriation basis under Portfolio Investment Scheme is not an eligible credit to NRE (PIS) Account and NRO (PIS) Account respectively).

• NRIs may read Master Circular number RBI/2004-05/4 dated July 01, 2004 relating to remittance facilities for NRIs/PIOs/Foreign nationals.
• RBI notification No: 20 dated 3rd May, 2000.
• FAQs hosted on RBI internet site www.rbi.org.in under the head "Chapter III - Investments in Securities /shares and company deposits.
• AP Dir Series Circular No. 16 dated October 4, 2004

In case you have not been using this facility already, you may register yourself simply by submitting a written request to your DP mentioning your mobile number. You will start receiving the alerts once your mobile number is successfully recorded and SMS flag for receiving SMS alerts option is enabled in depository system by your DP.
Those account holders who want to register their mobile number to DP but do not wish to avail this facility, may inform their DP to disable the SMS flag provided such accounts are not operated by Power of Attorney and are not Basic Service Demat Account.

a. All debit transfers
b. Credits for IPO, sub-division and bonus
c. Failed instructions
d. Overdue instructions
e. Change of mobile number
f. Change of address
g. Debit of mutual fund units
h. Registration and de-registration of Power of Attorney
i. Modification, cancellation / deletion of nominee name
j. Pledge initiation, confirmation and invocation (to pledgor)
k. Blocking of and debit of shares in respect of tender offer instruction.

For change of address, registration and de-registration of Power of Attorney in depository system, SMS alerts are sent to registered mobile phone irrespective of whether account holder has opted for this facility or not.

NSDL directly sends messages for many important transactions carried out in demat account to the registered mobile number. This acts as an effective monitoring method to safeguard your demat account.

No charge is levied by NSDL on DPs for providing this facility to account holder.

If you are not getting SMS alerts, you need to give a request to your DP to enable the SMS Alert flag in the depository system. Merely giving mobile number is not sufficient.

In case you change your mobile number, you just need to provide your new mobile number to your DP in writing. Once change is effected by DP in depository system, you will receive a message on your old as well as new mobile number in this regard. In case you are considering changing your mobile number, you may like to opt for mobile number portability by which you may change your service provider but retain the current mobile number.

No, except for individual accountholders who are having a Basic Service Demat Account and whose accounts are operated through Power of Attorney, this facility is not mandatory, but highly recommended. As the alerts are directly sent by depository, you are in position to monitor the important transactions happening in the account and take appropriate actions, if required.

The terms and conditions related to SMS Alert Services are available at https://nsdl.co.in/termsandconditions.php

a. You receive a single consolidated account statement, which mentions all your investments in various securities including mutual fund units. You need not look at different statement received from mutual funds companies.
b. Change in address recorded in your demat account gets registered with all the concerned issuer companies and mutual fund companies / Registrar and Transfer Agent (RTA). Thus, eliminating the need to correspond with each of them separately.
c. By using facilities like IDeAS and NSDL Mobile App, you can monitor transactions and holdings in an extremely fast and efficient manner.
d. You receive SMS alerts upon debit of mutual fund units from your demat account.
e. You may opt for online redemption of mutual fund units by subscribing to SPEED-e facility.

Yes, name of the account holder in a demat account can be changed after opening of the demat account. The supporting documents required along with the written request depend upon the nature of change desired. If the change is required on account of any data entry error committed by the DP, then it can be corrected upon request from the concerned account holder or suo-moto by the DP, without any document asked from the account holder.

a. In case of the minor corrections (such as spelling correction, abbreviation or expansion of initials), self-attested copy of any proof of identity document like PAN card, Passport, Voter’s identity card, Aadhaar card, Driving license, NREGA card, containing the correct name is required. Account holder should also provide a confirmation that it is not a change in name of the individual for any reason including due to marriage, divorce, court order, etc. In case, an individual changes the spelling of its name for any reason including for numerology, etc., it will be considered as a change in name, and not a correction in name.
b. In other cases of the change or correction in name, following documents are required –

For residents of Karnataka and Punjab, where publication of name change in official gazette may not be available, following documents may be provided -

a. Sworn affidavit executed before the Notary Public / Magistrate of First Class / Executive Magistrate mentioning the reason for change of name and his complete address.
b. Paper publication in one local newspaper and one national newspaper.
c. Proof of Identity and Proof of address document in changed name.

Account holder should submit a self-attested copy of above document along with original for verification.

You can change your address in the depository system by submitting a written request to your DP. Such a request should be signed by all the joint holders, if account is jointly held. Following documents should be submitted along with the request -
a. Latest Transaction Statement of the demat account (not required if the client visits DP personally).
b. Self-attested copy of any proof of identity document like PAN card, Passport, Voter’s identity card, Aadhaar card, Driving license, NREGA card.
c. Self-attested copy of any document as proof of new address Passport, Voter’s identity card, Aadhaar card, Driving license.

You would be required to produce original document for the purpose of verification of photocopy by your DP. You or your authorized representative should sign the application once again in the presence of the officials of the Participant. Once the request for change in address is processed in the depository system, an email is sent by NSDL to the account holder(s) informing the update, in addition to intimation from the DP.

You may change your signature in demat account by following the procedure mentioned below –
a. Submit a written request to your DP mentioning the reason for change in signature.
b. New signature should be attested by your banker.
c. You should visit the DPs office personally and produce valid proof of identity.
d. You should affix your new signature in presence of DP official.
e. An authorised official of the DP shall verify the identity proof with the proof and photograph that were furnished at the time of opening of account. If found satisfactory, DP will make necessary changes in depository system.

Investor or his / her authorized representative need to submit claim to IEPF Authority to receive unpaid dividend and/or unclaimed shares. After verification of the claim, company confirms the claim to IEPF Authority. The IEPF Authority then initiates refund to claimant in his / her Aadhaar linked bank account through electronic transfer. In case the claim is for shares, they are credited to demat account specified in the claim form. The complete process and documents required are shown in the diagram below. One applicant can file one claim form for each company in one financial year. For more information, please visit http://www.iepf.gov.in/. It is important to know that all companies need to publish details of unclaimed shares and dividend on their website.

Diagram