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Securities Market - Depository Services - Coggle Diagram
Securities Market - Depository Services
Depository vs Custodian
Meaning
Financial Security
Ownership
Relationship to each other
Examples
Dematerialisation of Shares
Difficulties in the physical holding and transfer of shares
Delay in transfer of shares
Possibility of loss of Share Certificate
Risk of circulation of fake certificates
Payment of stamp duty
Forgery
Bad deliveries
Procedure for opening a Demat account
Fill up an account opening form with DP of your choice.
Sign a DP- Client agreement
Receive a client ID number.
Submit Demat Request Form (DRF) available with DP along with physical certificate.
DP will deface physical Certificate by stamping “surrendered for Demat”.
DP sends an electronic request for dematerialisation of shares to Company or Registrar and Transfer Agent through depository
R&T agent after necessary verification will cancel share certificates and confirm Demat to depository.
After receiving confirmation from depository DP will credit account investor is credited
This is normally completed within 15 days after share certificate reaches R&T agent.
Selling shares under Demat
Purchasing shares under Demat
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Depository System
Features of depositories system
Dematerialization.
Option of remateralisation.
Electronic settlement of trades.
Instant transfer.
Cost Savings.
Safety and security.
Basic Services of a Depository
Maintenance of accounts of the investors.
Dematerialization and Rematerialization
Settlement of market transactions through release and receipt of securities in the investor’s account
Distribution of non financial benefits from the corporates to its shareholders.
Hypothecation of securities
Freezing of accounts
Receipt of bonus or rights shares from the corporates in which he is a shareholder.
Bank Vs Depository
What does it hold?
What is transferred
Without Handling
Safekeeping
Depositories in India
NSDL (National securities Depositories Limited) (IDBI, UTI & NSE)
CDSL (Central Depository Services Limited) (BSE)
Depository Participant
A Depository participant is the agent between the Depository and the investor.
A DP can offer Depository services only after he gets registered with SEBI.
To demat shares an account has to be opened with the DP of your choice listed under NSDL or CDSL.