National Securities Depository Limited
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Home  :  Joining NSDL  :  As a DP

Eligibility

As per Regulation 19(a) of SEBI (Depositories & Participants) Regulations, following are the categories that are eligible to become DPs

(i) A public financial institution as defined in section 4A of the Companies Act, 1956 (1 of 1956)
(ii) A bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934)
(iii) A foreign bank operating in India with the approval of Reserve Bank of India
(iv) A state financial corporation established under the provisions of section 3 of the State Financial Corporations Act, 1951 (63 of 1951)
(v) An institution engaged in providing financial services, promoted by any of the institutions mentioned in sub clause (i), (ii), (iii), (iv), jointly or severally
(vi) A custodian of securities who has been granted a certificate of registration by the Board under sub-section (1A) of section 12 of the Act
(vii) A clearing corporation or a clearing house of a stock exchange
(viii) A stock broker who has been granted certificate of registration by the Board under sub-section (1) of section 12 of the Act:

Provided that the stock broker shall have a minimum net worth of rupees 50 lakhs and the aggregate value of the portfolio of securities of the beneficial owners held in dematerialised form in a depository through him shall not exceed 100 times of the net worth of the stock broker.

Provided further that if the stock broker seeks to act as a participant in more than one depository, he shall comply with the criteria specified in the first proviso separately for each such depository.

Provided further that where the stockbroker has a minimum networth of Rupees Ten crore, the limits on the aggregate value of the portfolio of securities of the beneficial owners held in dematerialized form in a depository through him shall not be applicable.

(ix) A non-banking finance company, having a net worth of not less than rupees fifty lakhs

Provided that such company shall act as a participant only on behalf of itself and not on behalf of any other person

Provided further that a non-banking finance company may act as a participant on behalf of any other person, if it has a networth of Rs. 50 crore in addition to the networth specified by any other authority.

(x) A registrar to an issue or share transfer agent who has a minimum net worth of rupees ten crores and who has been granted a certificate of registration by the board under sub-section (1) of section 12 of the Act.

The Regulations empower NSDL to set its own selection criteria in the Bye Laws. Therefore, the applicants must also adhere to the following admission criteria stated in NSDL Bye Laws

  • The applicant in the category of stock broker should have a minimum Networth of Rs.Three crore. In case of non-banking finance company (NBFC) and a registrar to an issue or share transfer agent, minimum networth as specified in the SEBI Regulations will apply.
  • The applicant should not have been convicted in any of the five years immediately preceding the filing of the application in any manner involving misappropriation of funds & securities, theft, embezzlement of funds, fraudulent conversion or forgery.
  • The applicant should not have been expelled, barred or suspended by SEBI, self regulatory organisation or any stock exchange. Provided however that, if a period of three years or more has elapsed since such punishment was imposed, the Depository may, in its discretion consider such application.
  • The applicant shall be required to furnish information and details of his business history including the background and experience of directors and promoters of the applicant.