Introduction
A Depository Participant (DP) facilitates a relationship between an investor and the Depository. An investor cannot deal directly with a depository.
Eligibility
All DP must be registered with the Securities and Exchange Board of India (SEBI). Public financial institutions, scheduled banks, foreign banks, state financial corporations, custodians of securities registered by SEBI, clearing corporation or clearing house of a stock exchange, stock brokers registered with SEBI, non banking financial companies having minimum net worth of Rs.50 crore, and share registrar and share transfer agents are eligible for registration as DP. The eligibility criteria have been spelt out in Regulation 19 (a) of SEBI (Depositories and Participants) Regulations.
The application for becoming a DP has to be made with and accepted by a Depository. National Securities Depository Limited (NSDL) and Central Depositories Services (India) Limited (CDSL) are the depositories in India.
DP Services
- Opening of demat accounts (a process similar to that of opening a bank account);
- Conversion of securities held in physical form into electronic form;
- Reconversion of securities from electronic form to physical form;
- Transfer and transmission of securities;
- Settlement of purchases and sale of securities on stock exchanges and off-market;
- Keeping a record of holdings of the investor;
- Arranging for credit of securities to the account of the investor in case of Initial Public Offerings (IPO) or otherwise on account of bonus issue, rights issue, exercise of options, etc.
