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NSDL introduced a flat fee structure with effect from May 1, 2002. Under this fee structure, a custody fee of 75 paise per ISIN position per month (Rs. 9/- per ISIN position per annum) is being levied. The number of ISIN positions in NSDL have been steadily on the increase which clearly signals the investors' enthusiasm towards the demat process. Investors have continued to dematerialize their securities at the same pace as in the past. Keeping in line with NSDL's policy of passing on the benefit of increased volumes to the market, NSDL has decided to reduce the custody fee to 50 paise per ISIN position per month (Rs. 6/- per ISIN position per annum) with effect from October 1, 2002. There are no other changes in the fees charged to the Depository Participants. The fee structure after the reduction in custody fee is as given below:

As per RBI Circular IDMC.PDRS No. 5039/03.64.00/2001-02 all entities regulated by RBI [including financial institutions (FIs), primary dealers (PDs), cooperative banks, RRBs, local area banks (LABs), non banking financial companies (NBFCs)] are required to hold their investments in Government securities portfolio in either SGL (with RBI) or CSGL or in dematerialised form in a depository account. As a result of this, the entities like Provident Funds holding securities in physical form may be faced with the problem of liquidity on account of unwillingness of counter parties to transact securities in physical securities.

Therefore, Employees' Provident fund Organisation has allowed Board of Trustees of establishments exempt under relevant provisions of Employees' Provident Fund & Miscellaneous Provisions Act, 1952 to keep the securities in demat accounts with Scheduled bank under the credit control of Reserve Bank of India. This direction paves way for the exempted trusts to open demat account and avail of the benefits of holding and dealing in securities in demat form.

NSDL has vide its Circular No. NSDL/PI/2002/1346 dated August 12, 2002 advised its DPs to inform all Clients who hold HUF accounts with joint holdings to open new accounts in the name of Karta of the HUF, transfer the securities to such new accounts and close the HUF accounts with first names on or before October 31, 2002. DPs have further been advised to note that if such accounts are not closed by October 31, 2002, then the standing instructions to receive credits should be removed and DPs should not accept any fresh dematerialisation requests, receipt instructions, new issue applications and any other instruction which may result in credit to such accounts and inform all such Clients suitably.

NSDL has vide its Circular No. NSDL/PI/2002/1319 dated August 8, 2002 advised DPs about the documents to be obtained from corporate clients at the time of opening of demat accounts as well as the procedure for change of address. The details are as under:

(A) Documents required for Account Opening :

• Memorandum & Articles of Association (MOA & AOA), board resolution and the list of authorised signatories alongwith their specimen signatures and photographs, etc.
• Introduction by an existing account holder or by the applicant's bank.
• Proof of address of the corporate evidenced by the document registered with Registrar of Companies or acknowledged copy of Income Tax Return or Bank Statement or Leave and License agreement/Agreement for sale.

An authorised official of the DP shall verify the proof of address with the original documents and affix his/her signature on the documents submitted by the Client.

(B) Procedure for Change of Address :

• A written application for change of address of the corporate entity, signed by all the authorised signatories should be submitted to the DP.
• Following documents should be submitted alongwith the application:
  • Latest transaction statement of the corporate's account received from the DP.
  • Proof of new address (copies of the aforementioned documents) alongwith the original document of new address, for verification by the DP.
• Atleast one of the authorised signatories should visit the office of the DP in person to submit its application for change of address alongwith necessary documents and sign the application once again in the presence of the officials of the DP.
• An authorised official of the DP shall verify the application and the above-mentioned documents with the original and put his/her signature on the application with remarks "verified" and thereafter record the change of address in the DPM system.
• The DP should write a letter to the Client at the old address as well as the new address to confirm the change of address.