A depository holds securities (like shares, debentures, bonds, Government
Securities, units, etc.) of investors in electronic form. Besides holding
securities, a depository also provides services related to transactions in
securities.
How can I avail the service of a depository?
A depository interfaces with the investors through its agents called
Depository Participants (DPs). If an investor wants to avail the services
offered by the depository, the investor has to open an account with a DP.
What are the benefits of a
Depository Account?
The benefits of participation in a depository are:
Immediate transfer of securities;
No stamp duty on transfer of securities;
Elimination of risks associated with physical certificates such as bad delivery,
fake securities, etc.;
Reduction in paperwork involved in transfer of securities;
Reduction in transaction cost;
Nomination facility;
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;
Transmission of securities is done by DP eliminating correspondence with
companies;
Convenient method of consolidation of folios/accounts ;
Holding investments in equity, debt instruments and Government Securities in a
single account;
Automatic credit into Demat account, of shares, arising out of
split/consolidation/merger, etc.
What are the facilities offered by
NSDL?
NSDL offers following facilities: -
Dematerialization i.e., converting physical certificates to electronic form;
Rematerialisation i.e., conversion of securities in Demat form into physical
certificates;
Facilitating repurchase / redemption of units of mutual funds;
Electronic settlement of trades in stock exchanges connected to NSDL;
Pledging/hypothecation of dematerialized securities against loan;
Electronic credit of securities allotted in public issues, rights issue;
Receipt of non-cash corporate benefits such as bonus, in electronic form;
Freezing of Demat accounts, so that the debits from the account are not
permitted;
Nomination facility for Demat accounts;
Services related to change of address;
Effecting transmission of securities;
Instructions to your DP over Internet through SPEED-e facility;
Account monitoring facility over Internet for clearing members through SPEED
facility;
Other facilities viz. holding debt instruments in the same account, availing
stock lending/borrowing facility, etc.
NSDL provides its services to investors through
its agents called Depository Participants (DPs).
These agents are appointed by NSDL with the approval
of SEBI. According to SEBI regulations, amongst
others, three categories of entities i.e. Banks,
Financial Institutions and Members of Stock
Exchanges [brokers] registered with SEBI can become
DPs.
What should I do when I want to open an account with a DP?
You can approach any DP of your choice and fill up
an account opening form. At the time of opening an
account, you have to sign an agreement with the DP
in a NSDL prescribed standard agreement, which
details your and your DP's rights and duties. You
have to submit the account opening form along with
the documents as mentioned in the account opening
form.
You must remember to take original documents to the DP for verification.
Your DP will carry-out "in-person verification" of account holder(s) at the
time of opening your account. You should remember to obtain a copy of the
agreement and schedule of charges for your future reference.
Can I open more than one Demat account with only one DP in
identical names?
Yes. You can open more than one Demat account in
identical names. There is no restriction on the
number of Demat accounts you can open with the
same/other DPs.
Can a depository account be opened with four holder's
names?
Yes, a depository account can be opened in the names of
four holders but the account can be operated only for
dematerialization of shares held in the same
combination. No shares can be credited by purchase or
transferred from any other account. Hence the standing
instruction for credits will be 'N' for such accounts
Can I open a single account for securities owned in
different ownership patterns?
No. The Demat account must be opened in the same
ownership pattern in which the securities are held
in the physical form. e. g. if one share certificate
is in your individual name and another certificate
is jointly held in your and your wife's name, two
different accounts would have to be opened.
What do I do if I have physical
certificates with the same combination of names, but the
sequence of names is different e.g. A & B, B & A ?
In this case you may open only one account with A and
B as the account holders and lodge the security
certificates with different order of names for
dematerialization in the same account. You will fill-up
an additional form called " Transposition cum Demat"
form. This would help you to effect change in the order
of names as well as dematerialize the securities.
Can someone else operate my account
on my behalf on the basis of a power of attorney ?
Yes. If you authorize any person to operate your
account by executing a power of attorney and submit
it to your DP, that person can operate the account
on your behalf.
Can I change my address and bank
details?
Yes. You can change your address and bank details in
your Demat account, you must ensure that any subsequent
change in address and bank detail is informed to your
Depository Participant.
What is 'Standing Instruction' given
in the account opening form?
This is a instruction if opted for allows you to
receive credits automatically in your Demat account.
Can I add or delete names of
accountholders (second or third accountholder) after
opening the account ?
No. Names of the accountholders for a
depository account cannot be changed. If you
want to change name or add / delete an
accountholder, you need to open a new account in
the desired holding pattern (names) and transfer
the securities to the newly opened account. The
old account may be closed.
Can the existing corporate Demat
account be continued in case of a name
change?
The name of the corporate Demat account can be changed and the account can be continued.
No, it is not mandatory to give nomination but a declaration that the holder do not wish to make a nomination has to be provided.
What is the procedure for
nomination?
The nomination form duly filled-in should be
submitted either at the time of account opening or
later. The account holder, nominee and two witnesses
must sign this form and the name, address and photograph
of the nominee must be submitted.
How many nominees can be appointed?
Only one person can be nominated irrespective of the
fact whether the Demat account is held singly/jointly.
Who cannot nominate?
Non-individuals including societies, trusts, body
corporates, partnership firms, Kartas of Hindu Undivided
Family, minor, holders of power of attorney cannot avail
of nomination..
Can an NRI be appointed as
nominee?
Yes, NRI can nominate directly. But, the power of
attorney holder cannot nominate on behalf of NRI.
Can a minor be a nominee?
Yes, a minor can be a nominee. In such a case, the
guardian will sign on behalf of the nominee and in addition
to the name and photograph of the nominee, the name, address
and the photograph of the guardian must be submitted to the
DP.
Can the nominee be changed?
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.
Dematerialization is the process by which physical
certificates of an investor are converted to an
equivalent number of securities in electronic form and
credited in the investor's account with its DP. In order
to dematerialize certificates; an investor will have to
first open an account with a DP and then request for the
dematerialization of certificates by filling up a
dematerialization request form [DRF], which is available
with the DP and submitting the same along with the
physical certificates. The investor has to ensure that
before the certificates are handed over to the DP for
Demat, they are defaced by marking "Surrendered for
Dematerialization" on the face of the certificates.
Can I dematerialize any share certificate?
You can dematerialize only those certificates that
are already registered in your name and are in the list
of securities admitted for dematerialization at NSDL.
All the scrips included in S&P, CNX, NIFTY and BSE
SENSEX have already joined NSDL. This list has more than
7,000 companies and is steadily growing. You can get an
updated list of these companies from your DP or from
NSDL website at www.nsdl.co.in.
Can I cancel my Pending Demat Request?
Yes, pending demat requests (more than 60 days) can be cancelled by filling Annexure - A
What precautions should I take before defacing a share
certificate?
Before defacing the share certificate, you must
ensure that it is available for dematerialization. You
must therefore check with your Depository Participant
(DP) whether the ISIN (code number for the security in a
depository system) has been activated and made available
for dematerialization by the depository. If yes, then
you may deface the share certificate. The certificates
are defaced by marking "Surrendered for
Dematerialization" on the face of the certificate.
How long does the
dematerialization process take?
Dematerialization will normally take about 15 to 30
days.
Can my electronic holdings be
converted back into certificates?
Yes. If you wish to get back your securities in
physical form, all you have to do is to request your DP
for Rematerialisation of the same. 'Rematerialisation'
is the term used for converting electronic holdings back
into certificates. Your DP will forward your request to
NSDL, after verifying that you have the necessary
balance. NSDL in turn will intimate the registrar who
will print the certificates and dispatch the same to
you.
How would I get my dividend /
interest or other cash entitlements?
The concerned company obtains the details of
beneficiary holders and their holdings from NSDL. The
payment to the investors will be made by the company
through the ECS ( Electronic Clearing Service) facility
or by issuing warrants on which your bank account
details are printed. The bank account details will be
those which you would have mentioned in your account
opening form or changed thereafter.
How would I get my bonus shares or other non-cash
entitlements?
The concerned company obtains the details of
beneficiary holders and their holdings from NSDL. Your
entitlement will be credited by the company directly in
your NSDL depository account.
What should I do if I want to pledge electronic
securities?
The procedure is as follows:
Both you (pledger) as well as the lender (pledgee) must have depository
accounts;
You have to initiate the pledge by submitting to your DP the details of the
securities to be pledged in a standard format ;
The pledgee has to confirm the request through its DP. It is suggested that
after creation of the pledge request, you may inform the pledgee and request him
to confirm the request;
Once this is done, your securities are pledged All financial transactions
between the pledger and the pledgee are handled as per usual practice outside
the depository system.
How can I close the pledge after repayment of my loan?
After you have repaid your loan, you can request for a
closure of pledge by instructing your DP in a prescribed
format. The pledgee on receiving the repayment will
instruct its DP accordingly for the closure of the
pledge.
Who will receive dividend and bonus shares on the pledged
securities?
The pledger will receive the dividend and bonus shares
if any declared on the pledged securities.
How will I know that my DP has updated my account after
each transaction?
Your DP will give you a Transaction Statement
periodically, which will detail your current balances
and the various transactions you have done through the
depository account. If you so desire, Transaction
Statement can be obtained at intervals shorter than the
stipulated ones, probably at a cost.
At what frequency will I receive my Transaction
Statement from my DP?
You will receive a Transaction Statement every month
if you have done any transaction or once in a quarter if
there is no transaction during the period.
What is to be done if there are any discrepancies in my
transaction statement?
In case of any discrepancy in the transaction
statement, you can contact your DP. If the discrepancy
cannot be resolved at the DP level, you should approach
NSDL.
What security do I have if the only proof of my holdings
in the depository is merely a piece of paper indicating my account balance?
No transaction can be effected in your account
without your written authorization. Further, if you are
away for a long time, you have the facility of freezing
your account wherein only credits into your account will
be allowed and no debit will be possible.
What will happen if my DP goes bankrupt or stops
operation?
In a rare event of your DP going bankrupt or closing
the operations, the interests of the investors will be
fully protected. In such a situation, the investors will
be given an option of either transferring the securities
to a new DP or they may rematerialize the securities.
What precautions does NSDL take to protect the data in
its depository system?
The data carries a high importance in the NSDL
depository system. NSDL has taken necessary steps to
protect the transmission and storage of data. The data
is protected from unauthorized access, manipulation and
destruction. The following back up practices are adopted
to protect the data:
Local Back up
Remote Back up
Disaster Recovery Site
In addition to this, every DP is required to take
daily back up, at the end of day's operation.
Can I freeze my account?
NSDL system provides the facility to freeze the
depository accounts for any debits or for both, debits
and credits. In an account which is "freezed for
debits", no debits will be permitted from the account,
till the time it is unfreezed.
Do I get any intimation for Debit and credit of shares from my account?
Apart from transaction statement, NSDL has launched SMS Alert facility for demat account holders whereby investors can receive alerts for debits (transfers) to their demat accounts, credits for IPO and offer for sale allotment, sub-division and bonus.
Is it possible to give delivery instructions to the DP
over Internet and if yes how?
Yes. Delivery instructions can be given over internet
through SPEED-e. The account holder has to first
register for the Speed-e facility.
How does SPEED-e work?
You can submit delivery instructions electronically,
on the SPEED-e website https://www.speed-e.nsdl.com,
after your DP has authorized you to operate your account
through the SPEED-e facility. You can monitor the status
of such delivery instructions to ensure that the
instructions have been executed.
How can I, as a Demat Account-holder / Clearing Member
benefit from SPEED-e?
The benefit offered by SPEED-e to a Demat account holder /
Clearing Member is the convenience of conducting Demat account
transactions using an Internet connection from anywhere at
anytime eliminating paperwork. Time and efforts for obtaining
delivery instruction forms from your DP and submitting them to
the DP every time you sell securities is saved.
How can I register myself for SPEED-e?
For using the SPEED-e facility it is essential that
your DP must be registered with NSDL for this facility.
There are two types of users for this facility, one is
password based user who logs in with his password and
can transfer securities only to three pre-specified
broker accounts of his choice. The second is the
smart-card based user who is issued a smart card for
logging on to the site and can transfer the securities
to any account. A password user can visit the SPEED-e
website, fill-up the registration form available on the
website. The website would allot a registration number
an lient would authorize him for using the facility upon
submission of a request with the registration number.
A smart card user can download the form from the
website, fill it and submit the same to its DP. The DP
will process the form and enable the client for using
the facility. The smart card user will also be issued a
smart card reader and a smart card.
What is the difference between Smart-card and Password
based access to SPEED-e?
Smart card based access to SPEED-e is more secure as your
identification is based both on "What you have i.e. smart
card" and "what you know i.e. PIN code" and provides a
digital signature to identify you. In the case of password
based access , you should handle your password carefully. In
view of this security difference, the password based users
have been permitted to transfer securities through SPEED-e
facility to only three pre-specified broker accounts. These
three accounts can be changed by the user.
Is there any further benefit of the smart card option in
SPEED-e facility?
Following are the additional benefits of smart card
option in SPEED-e facility :
smart card user can transfer securities to any account unlike password users
where transfer of securities is permitted only to three pre-notified broker
accounts;
single smart card can be used to access all your Demat accounts, opened with the
same DP;
facility of multiple authorization;
you can freeze your Demat account or any particular ISIN or specific quantity
within an ISIN yourself, through SPEED-e. The account freezed using SPEED-e can
be unfreezed only by you.
Thereby you can deliver instructions and transfer
securities when you wish, lock the account and unlock it
only when you need, i.e. complete control of your account in
your hands.
How does one operate jointly held Demat Accounts through
SPEED-e?
For password based operation, only one user can operate
the account. Joint holders will have to give a power of
attorney to one joint holder among themselves. For smart
card based operation, in addition to what is stated
above, all the joint holders can operate the account
independently or jointly using multiple authorization
facility
What should I do if I forget my Password?
If you are Client using SPEED-e/IDEAS, log-on to
SPEED-e website, submit your User-Id, click on 'Forgot
Password' and fill-up an online ' Password Reset
Request' form by supplying the new Password, Client Id &
other personal details. A print-out of this form has to
be given to your DP which will then authorize the
Password Reset Request.
If you are a Clearing Member using IDEAS, log-on to
SPEED-e website, submit your User-Id, click on 'Forgot
Password' and fill-up an online ' Password Reset
Request' form by supplying the new Password & CM BP Id.
A print-out of this form has to be given to NSDL which
will then authorize the Password Reset Request.
What is the procedure for selling dematerialized
securities?
The procedure for selling dematerialized securities is very simple. After
you have sold the securities, you would instruct your DP to debit your
account with the number of securities sold by you and credit your broker's
clearing account. This delivery instruction has to be given to your DP using
the delivery instruction slips given to you by your DP at the time of
opening the account. Procedure for selling securities is given here below:
You sell securities in any of the stock exchanges linked to NSDL through a
broker;
You give instruction to your DP to debit your account and credit the broker's
[clearing member pool] account;
Before the pay-in day, your broker gives instruction to its DP for delivery to
clearing corporation;
Your broker receives payment from the stock exchange [clearing corporation] ;
You receive payment from the broker for the sale of securities.
What do you mean by 'Market Trades' and 'Off Market
Trades'?
Any trade settled through a clearing corporation is
termed as a 'Market Trade'. These trades are done
through stock brokers on a stock exchange. 'Off Market
Trade' is one which is settled directly between two
parties without the involvement of clearing corporation.
The same delivery instruction slip can be used either
for market trade or off-market trade by ticking one of
the two options.
What settlement details are required on the delivery
instruction slip?
On every stock exchange, various settlements are
effected every day such as daily settlement, auction
settlement, etc. Each of these settlements is identified
by combination of a market type and a settlement
number.You are required to mention the appropriate
settlement details on the delivery instruction slip
while transferring the shares to your broker's account.
These settlement details are available on the contract
note issued by the broker.
What is the current rolling settlement cycle ?
With effect from 1st April,2003 SEBI has mandated a
T+2 settlement cycle i.e. a trade executed on the floor
of the exchange on Day T will have to be settled on Day
T+2.
What is an 'Inter Depository' transaction?
Any transaction between two clients not having Demat
accounts with the same depository (NSDL/CDSL) is termed
as an 'Inter Depository' transaction.
What precautions do I need to observe with respect to
Delivery Instruction Slips [DIS]?
The following precautions are to be taken :-
Ensure and insist with your DP to issue DIS book; do not accept loose slips.
Ensure that DIS numbers are pre-printed and DP takes acknowledgment from you for
the DIS booklet issued to you.
Ensure that your account number [client id] is pre-stamped.
If your account is a joint account, all the joint holders have to sign the
instruction slips. Instruction cannot be executed if all joint holders have not
signed.
Avoid using loose slips
Do not leave signed blank DIS with anyone viz. broker/sub-broker.
Keep the DIS book under lock and key when not in use.
If only one entry is made in the DIS , strike out remaining space to prevent
misuse by any one.
Please fill in target account -Id and all details in the DIS, yourself.
What is 'execution date' given in the delivery
instruction form?
Execution date is the date on which securities will
be actually debited from your account. The execution
date written on the delivery instruction has to be
entered by the DP, in the DPM system [computer]. DPM
system will record the date and will debit your account
only on that date. This facility is called future
execution date facility.
What benefit do I get by giving delivery instruction
with a future execution date?
By giving a future dated instruction the risk of
non-execution of instruction due to lack of time or last
minute rush is covered.
What is the importance of record dates to me?
In case the securities bought by you are yet to be
transferred into your account by your broker before the
book closure / record date, you will not be entitled to
receive corporate benefits such as dividend or bonus
since your name will not figure in the list of
beneficial owners. Hence, you must ensure that
securities bought by you are transferred into your
account before the book closure / record date announced
by the company.
