Introduction A Depository facilitates holding of securities in the electronic form and enables securities transactions to be processed by book entry by a Depository Participant (DP), who as an agent of the depository, offers depository services to investors. According to SEBI guidelines, financial institutions, banks, custodians, stockbrokers, etc. are eligible to act as DPs. The investor who is known as beneficial owner (BO) has to open a demat account through any DP for dematerialisation of his holdings and transferring securities. The balances in the investors account recorded and maintained with CDSL can be obtained through the DP. The DP is required to provide the investor, at regular intervals, a statement of account which gives the details of the securities holdings and transactions. The depository system has effectively eliminated paper-based certificates which were prone to be fake, forged, counterfeit resulting in bad deliveries. CDSL offers an efficient and instantaneous transfer of securities. TYPES OF DEPOSITORIES
NSDL (National Securities Depository Ltd.) The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialised form in the India capital market.
Using innovative and flexible technology systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimise risk and reduce costs.
Promoters:
• Industrial Development Bank of India Limited • Unit Trust of India • National Stock Exchange of India Limited Other Shareholders:
• State Bank of India • Oriental Bank of Commerce • Citibank NA • Standard Chartered Bank • HDFC Bank Limited • The Hongkong and Shanghai Banking Corporation Limited • Deutsche Bank • Dena Bank • Canara Bank • Union Bank of India
CDSL (Central Depository Services Limited) CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion Bank. CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. Some of the important milestones of CDSL system are:
CDSL received the certificate of commencement of business from SEBI in February, 1999.
Honourable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of CDSL on July 15, 1999. Settlement of trades in the demat mode through BOI Shareholding Limited, the clearing house of BSE, started in July 1999.
All leading stock exchanges like the National Stock Exchange, Calcutta Stock Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc have established connectivity with CDSL.
As at the end of Dec 2007, over 5000 issuers have admitted their securities (equities, bonds, debentures, commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system. Promoters and shareholders: • Bombay Stock Exchange Limited • Bank of India • Bank of Baroda • State Bank of India • HDFC Bank Limited • Standard Chartered Bank • Canara Bank • Union Bank of India • Bank of Maharashtra • The Jammu and Kashmir Bank Limited • The Calcutta Stock Exchange Association Limited
CDSL was promoted by Bombay Stock Exchange Limited (BSE) jointly with leading banks such as State Bank of India, Bank of India, Bank of Baroda, HDFC Bank, Standard Chartered Bank, Union Bank of India and Centurion Bank.
CDSL was set up with the objective of providing convenient, dependable and secure depository services at affordable cost to all market participants. Some of the important milestones of CDSL system are:
CDSL received the certificate of commencement of business from SEBI in February, 1999.
Honourable Union Finance Minister, Shri Yashwant Sinha flagged off the operations of CDSL on July 15, 1999.
Settlement of trades in the demat mode through BOI Shareholding Limited, the clearing house of BSE, started in July 1999.
All leading stock exchanges like the National Stock Exchange, Calcutta
Stock Exchange, Delhi Stock Exchange, The Stock Exchange, Ahmedabad, etc have established connectivity with CDSL.
As at the end of Dec 2007, over 5000 issuers have admitted their securities (equities, bonds, debentures, commercial papers), units of mutual funds, certificate of deposits etc. into the CDSL system
Promoters
CDSL was promoted by Bombay Stock Exchange Limited (BSE) in association with Bank of India, Bank of Baroda, State Bank of India and HDFC Bank. BSE has been involved with this venture right from the inception and has contributed overwhelmingly to the fruition of the project. The initial capital of the company is Rs.104.50 crores. The list of shareholders with effect from 5th July, 2010 is as under.
Value of % terms to Sr. Name of shareholders holding (in total No. Rupees Lacs) equity 1 Bombay Stock Exchange Limited 5,663.46 54.20 2 Bank of India 582.00 5.57 3 Bank of Baroda 530.00 5.07 4 State Bank of India 1,000.00 9.57 5 HDFC Bank Limited 750.00 7.18 6 Standard Chartered Bank 750.00 7.18 7 Canara Bank 674.46 6.45 8 Union Bank of India 200.00 1.91 9 Bank of Maharashtra 200.00 1.91 10 The Calcutta Stock Exchange Limited 100.00 0.96
Board of Directors
Mr. N. Rangachary Chairman Mr. T. S. Independent Director Narayanasami Sponsor Director – Bombay Mr. Madhu Kannan Stock Exchange Limited Mr. Ashishkumar Sponsor Director – Bombay Chauhan Stock Exchange Limited Sponsor Director – Bombay Mr. James E. Shapiro Stock Exchange Limited Sponsor Director - State Bank Mr. Anjan Barua of India Sponsor Director - Bank of Mr. A. D. M. Chavali Baroda Mr. P. S. Reddy Executive Director
Management Team
Mr. P. S. Reddy Executive Director Mr. Pramod Chief Technology Officer Deshpande Sr.Vice President. Business Development(Currently on Mr. Cyrus Khambata deputation to CDSL Ventures Ltd. as CEO with effect from 7- 12-2006) Vice President. Mr. Jitendra Chad Information Technology Vice President. Ms. Nayana Ovalekar Audit, Inspection & Compliance Vice President. Mr. Bharat Sheth Accounts & Administration Vice President. Mr. Sunil Alvares Business Development Vice President. Mr. Ramkumar K. Operations Vice President. Mr. Jignesh Gandhi New Projects Vice President. Mr. Satish Budhakar Legal & Company Secretary
WHY A DEMAT ACCOUNT WITH CDSL?
Convenience: Audit and Inspection: CDSL conducts
regular audit of its DPs to ensure compliance of operational and regulatory requirements.
Dormant Account Monitoring: CDSL has in place a mechanism for monitoring dormant accounts.
Helpdesk:: DPs and investors can obtain clarifications and guidance from CDSL's prompt and courteous helpline facility.
Security:
Computer Systems: All data held at CDSL and is automatically mirrored at the Disaster Recovery site and is also backed up and stored in fireproof cabinets at the main and disaster recovery site.
Unique BO Account Number:: Every BO in CDSL is allotted a unique account number, which prevents any erroneous entry or transfer of securities. If the transferor's account number is wrongly entered, the transaction will not go through the CDSL system, unless corrected.
Data Security: All data and communications between CDSL and its users is encrypted to ensure its security and integrity.
Claims on DP: If any DP of CDSL goes into liquidation, the creditors of the DP will have no access to the holdings of the BO.
Insurance Cover: CDSL has an insurance cover in the unlikely event of loss to a BO due to the negligence of CDSL or its DPs.
Wide DP Network: CDSL has a wide network of DPs, operating from over 6000 sites, across the country, offering convenience for an investor to select a DP based on his location.
On-line DP Services:The DPs are directly connected to CDSL thereby providing on-line and efficient depository service to investors.
Wide Spectrum of Securities Available for Demat:The equity shares of almost all A, B1 & B2 group companies are available for dematerialisation on CDSL, consisting of Public (listed & unlisted) Limited and Private Limited companies. These securities include equities, bonds, units of mutual funds, Govt. securities, Commercial papers, Certificate of deposits; etc. Thus, an investor can hold almost all his securities in one account with CDSL. A BO can also hold warehouse receipts pertaining to commodities, in a demat account. However, a separate account should be opened for holding warehouse receipts.
Competitive Fees Structure: CDSL has kept its tariffs very competitive to provide affordable depository services to investors.
Internet Access:A DP, which registers itself with CDSL for Internet access, can in turn provide demat account holders with access to their account on the Internet.
Dependability:
On-line Information to Users: CDSL's system is built on a centralised database architecture and thus enables DPs to provide on-line depository services with the latest status of the investor's account.
Convenient to DPs: The entire database of investors is stored centrally at CDSL. If there is any system-related issues at DPs end, the investor is not affected, as the entire data is available at CDSL.
Contingency Arrangements:CDSL has made provisions for contingency terminals, which enables a DP to update transactions, in case of any system related problems at the DP's office.
Meeting User's Requirements: Continuous updation of procedures and processes in tune with evolving market practices is another hallmark of CDSL's services.