NSDL carries out its activities through service providers like Depository Participants (DPs), Issuer companies and their Registrars and Share Transfer Agents, Clearing corporations of Stock Exchanges. These entities are called business partners in NSDL terminology. These entities need to get integrated into NSDL depository system to be able to provide various services to the investors and clearing members.
The investors can obtain depository services through a depository participant of NSDL. Just as one opens a bank account in order to avail services of a bank, an investor opens a depository account with a depository participant in order to avail depository facilities.
A clearing member can open a special account in the depository system for the purpose of settling trades done on stock exchanges. The clearing account enables a clearing member to receive securities from its clients for delivery to the Clearing Corporation as pay-in and to distribute the pay-out received from the Clearing Corporation to its clients.
Issuer can make dematerialisation services available to their shareholders by signing an agreement to that effect with NSDL. After the agreement is entered into, an electronic link is established between NSDL, Issuer or its R & T Agent.
The clearing corporations of stock exchanges also have to be electronically linked to the depository in order to electronically receive securities delivered by clearing members towards pay-in and to give out securities to clearing members towards pay-out.