FAQ What is a
depository? 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: 1. Immediate
transfer of securities; 2. No
stamp duty on transfer of securities; 3. Elimination
of risks associated with physical certificates such as bad delivery, fake securities,
etc.; 4. Reduction
in paperwork involved in transfer of securities; 5. Reduction
in transaction cost; 6. Nomination
facility; 7. 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;
8. Transmission
of securities is done by DP eliminating correspondence with companies; 9. Convenient
method of consolidation of folios/accounts; 10. Holding
investments in equity, debt instruments and Government Securities in a single account; 11. Automatic credit
into Demat account, of shares, arises out of split/consolidation/merger, etc. What are the
facilities offered by NSDL & CDSL? NSDL & CDSL offers following
facilities: -
Account
Opening Who is a DP? NSDL &
CDSL 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. Nomination Is it
mandatory to nominate? 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 What do you
mean by dematerialization? 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. Rematerialisation 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. Corporate
Benefits 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. Pledge 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. Safety
Features 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 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. Easiest The full form
of easiest is “Electronic Access To Securities
Information and Execution of Secured Transaction “ The evolution of the Indian capital market
has seen several enhancements during the past few years and this has been a result of
innovative use of newer technologies. In the reduced settlement cycle era, investors
require updated demat account information at a much faster pace than ever before. In other
words, the quest for account status information has risen manifold. In order to
facilitate a CDSL demat account holder to easily adapt to the fast reducing settlement
cycle, CDSL has introduced easiest , its Internet-enabled services to empower a demat
account holder in managing his securities ‘anytime-anywhere’ in an efficient and
convenient manner, all in a state-of-the-art secure environment. easiest ,
which enables a BO/CM to enter debit/credit instructions on the Internet. What is
easiest? CDSL’s
internet based facility easiest (electronic access to securities information and execution
of secured transactions) , permits CMs of BOs to submit off-market,on-market,
inter-depository and early pay-in debit instructions from their demat account. Moreover,
all the facilities and benefits of easi are automatically made available to a subscriber
of easiest. What are the
different types of account transfers available on easiest? There are two
types of account transfers available on easiest: Trusted
account - Transfers : permits transfer of securities from a BO account to the settlement
accounts of any 4 CMs in CDSL, which have been pre-notified by the BO. Account of
choice - Transfers : permits transfer of securities from a BO account to any other demat
account including the CM settlement accounts. All the on-market, off-market, early-payin
and interdepository transactions are authenticated by means of a digital signature, which
is provided by CDSL at an additional cost. CMs would be able to register for the account
of choice option only for submitting transactions on easiest. Why should I
subscribe /register for the easiest? easiest , not
only provides all the benefits of easi, but also gives a BO/CM the convenience of
executing debit/credit instructions from their demat account, over the internet, anytime
anywhere. Does a BO/CM
still need to submit instruction slip(s) to the DP when executing transaction(s) on
easiest? No. A BO/CM
who submits instruction(s) through easiest need not give any instruction slip(s) to their
DP. If I am
registered for easi, can I register for easiest? Yes, you can
by selecting the option ‘Upgrade BO ID to easiest’, in your easi account login.
However you may have to check with your DP if they have subscribed for the easiest
facility. Can a BO/CM
submit multiple transactions through easiest? Yes. The
easiest upload facility enables a CM/BO to submit multiple transactions in a single file. Who can avail
of the upload facility? All BOs or CMs
who have opted for the account of choice login only, in easiest can avail of this
facility. A BO or CM would have to approach their DP to have their upload rights
activated. Can I monitor
corporate announcements for the shares in my demat account through my easiest login? Yes, you can
monitor corporate announcements for the securities held in your demat account through your
easiest login. You can also add ISINs not held in your demat account, but wish to monitor
corporate announcements for such ISINs. How do I
register for easi/easiest ? ·
There are two types of account transfers available
on easiest: ·
Login to CDSL’s website www.cdslindia.com and
click on the link “Register Online” from the homepage. ·
Select the facility (easi/easiest) you wish to
register for. ·
Enter your details like Login–Id, Email-Id,
etc. ·
Print the registration form. ·
Submit the registration form to your DP duly
signed by all the account holders. ·
You will receive the password at your email-Id. You can
commence using easi/easiest by entering your ‘User name’ and
‘Password’ at the homepage of CDSL’s site www.cdslindia.com. Register now for easiest at www.cdslindia.com and experience the convenience of
demat at your fingertips. Speed-e 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 & Easi-est work? You can submit
delivery instructions electronically, on the SPEED-e & Easi-est 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. Trading
/ Settlement 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. |
