Broker Guided Tour/Safety
There are various checks and measures in the depository system to ensure safety of the investor holdings. These include:
- A DP can be operational only after registration by SEBI, which is based on the recommendation from NSDL and their own independent evaluation. SEBI has prescribed criteria for becoming a DP in the regulations.
- Depository Participants are allowed to effect any debit and credit to an account only on the basis of valid instruction from the client.
- Every day, there is a system driven mandatory reconciliation between participant and NSDL.
- There are periodic inspections into the activities of both DP and R&T agent by NSDL. This also includes records based on which the debit/credit are effected.
- The data interchange between NSDL and its business partners is protected by protection measures of international standards such as encryption hardware lock. The protection measures adopted by NSDL are more than what is prescribed in the SEBI Regulations.
- All transactions are recorded at NSDL Central System and in the databases maintained by business partners.
- All investors have a right to receive their statement of accounts periodically from the DP.
- Every month NSDL forwards statement of account to a random sample of investors as a counter check.
- In the depository, the depository holds the investor accounts on trust. Therefore, if the DP goes bankrupt the creditors of the DP will have no access to the holdings in the name of the clients of the DP. These investors can transfer their holdings to an account held with another DP.
- Certification in Depository Operations : NSDL has introduced a Certification Programme in Depository Operations, and it has been made compulsory for all DPs to appoint a person qualified in this certification in each of its branches. This way, NSDL wants to ensure that each branch of a DP that services investors has atleast one person who has thorough knowledge about depository system.
- Investor grievance : All grievances of the investors are to be resolved by the concerned business partner. If they fail to do so, the investor has the right to approach NSDL at the following address:
Investor Relationship Cell
Kamala Mills Compound
Senapati Bapat Marg,
Lower Parel, Mumbai- 400013
The investor grievance cell of NSDL would work towards resolution of the grievance.
- Insurance Cover : NSDL has taken a comprehensive insurance policy to protect the interest of the investors in cases of failure of the DP to resolve a genuine loss.
- Computer and communication infrastructure
NSDL and its business partners use hardware, software and communication systems, which conform to industry standards. Further, the systems are accepted by NSDL only after a rigorous testing procedure. NSDL's central system comprises an IBM mainframe system with a back-up facility and a remote disaster back-up site.
Machine level back-up : The IBM mainframe in which the data is processed has adequate redundancy built into its configuration. There is a standby central processing unit (CPU) to which processing can be switched over to in case of main system CPU failure. The disk has RAID implementation, which ensures that a single point failure will not lead to loss in data. System has spare disk configuration where data is automatically copied from the main disk upon encountering the first failure (due to RAID implementation - first failure does not result in loss of data).
All network components like router, communication controllers etc., have on-line redundancy and thus a failure does not result in loss of transaction.
Disaster back up site : A disaster back up site equipped with a computer identical to the mainframe computer & computing resources has been set up at a remote location about 175 km away from Mumbai. The depository operations are often switched between the computing resources at Mumbai office and disaster back up site to ensure that the disaster site is always operational.
Back-up in case of power failure : Continuity in power supply to the main systems is assured by providing for;
- dual uninterrupted power supply (UPS) for IBM-Mainframe and related components wherein the two UPSs are connected in tandem. In case of failure of primary UPS, the secondary UPS takes over instantaneously and thus, there is no interruption in operation, and
- back-up diesel generator set.
Periodic Review : The NSDL hardware, software and communication systems are continuously reviewed in order to make them more secure and adequate for the size of business. These reviews are a part of an ongoing exercise wherein security considerations are given as much importance as operational efficiency.