{"id":27203,"date":"2019-12-13T19:27:36","date_gmt":"2019-12-13T13:57:36","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=27203"},"modified":"2019-12-18T18:16:44","modified_gmt":"2019-12-18T12:46:44","slug":"who-are-depository-participants-services-by-them","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/who-are-depository-participants-services-by-them\/","title":{"rendered":"Depository Participants- Definition &#038; Services to Stock Investors?"},"content":{"rendered":"<p class=\"has-drop-cap\">A Depository system is very similar to the Banking System by\nreplacing the cash by securities. A Depository System is a corporation where\nthe <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A shareholder is an individual or entity that owns at least one share of a company&amp;#039;s stock, granting them partial ownership of the company. This status allows them certain rights, including(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/shareholder\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>shareholder<\/a>&rsquo;s securities are held in electronic form at the request of the\nshareholder through the medium of Depository Participant. The entity is\nappointed by a depository through which its services are provided to the\ninvestors.<\/p>\n\n\n\n<p>For availing the services such as Dematerialization and Rematerialization of shares, the investor opens a Demat account with a Depository Participants, it also requires-<\/p>\n\n\n\n<ul><li>Maintenance of a record of securities held by the investor, <\/li><li>Settlement of trades by delivery or receipt of securities for transactions done by the investor on the stock exchange,<\/li><li>On account of subscription, <a href=\"https:\/\/enterslice.com\/ipo-support\">Credit of securities in an IPO<\/a> or rights and bonus securities received, among others.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are the two basic criteria to become a Depository?<\/strong><\/h2>\n\n\n\n<ol><li>The Depository must be registered under the Companies Act.<\/li><\/ol>\n\n\n\n<p><strong>2. <\/strong>The Depository must be <a href=\"https:\/\/enterslice.com\/registration-of-mutual-fund-with-sebi-india\">registered with SEBI<\/a>. The Depository Participant has to comply with the eligibility criteria prescribed in the SEBI (Depository and Participants) Regulations, 2018.SEBI grants the certificate of registration. <\/p>\n\n\n\n<p><strong>Note-There are two depositories functioning in\nIndia, i.e. NSDL (National Securities Depository Limited)AND CDSIL(Central\nDepository Services(India) Limited.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is the Depository Participant?<\/strong><\/h2>\n\n\n\n<p>Depository Participant acts as an agent of the investor at the\nStock Exchange. It is the representative of the Depository in the Depository\nsystem by presuming the link between the Company and the investor through the\nDepository.<\/p>\n\n\n\n<p>Further, as per the SEBI GUIDELINES, below-mentioned\nparticipants can also become the Depository Participants-<\/p>\n\n\n\n<ul><li><strong>A public financial institution, bank, <\/strong><\/li><li><strong>State financial corporation, <\/strong><\/li><li><strong>Custodian, <\/strong><\/li><li><strong>Clearing corporation, stockbroker,&nbsp;<\/strong><\/li><li><strong>Non-Banking Financial Statement or registered transfer agent. <\/strong><\/li><li><strong>As an applicant, it must also possess the adequate infrastructure and trained personnel to carry out functions of a DP. <\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What are the services provided by the Depository Participants to the Stock Investor?<\/h3>\n\n\n\n<p>The various\nservices provided by the Depository Participants to the Stock Investor are-<\/p>\n\n\n\n<ul><li>Opening a Demat account;<\/li><li>Dematerialization of securities, i.e. converting physical securities into electronic form; <\/li><li>Rematerialization of securities, i.e. converting electronic securities balances into physical form; <\/li><li>Keeping the record of securities in the electronic form held by the Stock Investor;<\/li><li>Trade Settlement by delivery or receipt of securities;<\/li><li>Off-<a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> transactions and its settlement between BOs; <\/li><li>Facilitating loans against shares and pledging of dematerialized securities.<\/li><li>Helping an investor that they can open one account either with the same depository or with the different depository. Additionally, the investor is required to strictly company with the SEBI Guidelines.<\/li><li>Freezing of the Demat account.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is the Dematerialization\nof Securities?<\/strong><\/h2>\n\n\n\n<p>Dematerialization of\nsecurities is a process by which the physical securities are converted into\nelectronic securities at the request of the investor. However, the process is optional,\nand the investor can still hold shares in physical form.<\/p>\n\n\n\n<p><strong>The Process involved in\nthe Dematerialization-<\/strong>Various steps are involved in\nthe Dematerialization Process-<\/p>\n\n\n\n<ul><li>The first step is to fill the\nDematerialization Request form and lodging DRF and share certificates with the\nDepository Participants.<\/li><li>Depository Participant informs\nthe Depository and sends certificates and DRF form to the Registrar.<\/li><li>Further, the Depository\nintimates the Registrar or Issuer of securities.<\/li><li>On receipt of the DRF form, the\nRegistrar cancels the share certificate and enters in its ROM the name and\ndetails of the Depository.<\/li><li>Registrar confirms to\nDepository.<\/li><\/ul>\n\n\n\n<p><strong>What is\nRematerialization Process?<\/strong><\/p>\n\n\n\n<p>Rematerialization of\nsecurities is a process by which the electronic securities are converted into\nphysical securities at the request of the investor. <\/p>\n\n\n\n<p><strong>The Process Involved in\nthe Rematerialization-<\/strong>Various steps are involved in\nthe Rematerialization Process-<\/p>\n\n\n\n<ul><li>The first step is to fill the Rematerialization Request form and lodging RRF with the Depository Participants.<\/li><li>Depository Participant informs the Depository and sends the RRF form to the Registrar.<\/li><li>Further, the Depository intimates the Registrar or Issuer of securities.<\/li><li>Registrar prints the certificate and sends it to the Investor. <\/li><li>Registrar confirms to Depository.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What is the Immobilization facility provided to the Stock Investor?<\/h3>\n\n\n\n<p>Immobilization is a\nprocess where the physical share certificate is kept with the depository for\nsafe custody, and all the subsequent transactions in these securities take\nplace in the Book-entry form. The immobilization of fresh issues may be\nachieved by issuing a jumbo certificate representing the entire issue in the\nname of the depository, and the owner has the right to withdraw his physical\nsecurities as and when required.<\/p>\n\n\n\n<p><strong>Trade settlement by\ndelivery or receipt of securities-<\/strong><\/p>\n\n\n\n<p>The depository\nparticipants help the Stock investor in the settlement when the trade is final,\nand the investor must make the payment to the seller while the seller delivers\nthe securities to the buyer investor. As the settlement date denotes the legal\ntransfer of ownership of securities.<\/p>\n\n\n\n<p><strong>Conclusion-<\/strong>The functions and responsibilities of the Depository Participants are laid out by the <a href=\"https:\/\/enterslice.com\/registration-of-mutual-fund-with-sebi-india\">SEBI<\/a> in the Regulations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Depository system is very similar to the Banking System by replacing the cash by securities. A Depository System is a corporation where the shareholder&rsquo;s securities are held in electronic form at the request of the shareholder through the medium of Depository Participant. The entity is appointed by a depository through which its services are [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":27206,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"acf":{"service_id":"215"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Who are Depository Participants and services Provided by Them<\/title>\n<meta name=\"description\" content=\"The depository participants help the Stock investor in the settlement when the trade is final.The functions of depository participants are laid out by SEBI.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/who-are-depository-participants-services-by-them\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Who are Depository Participants and services Provided by Them\" \/>\n<meta property=\"og:description\" content=\"The depository participants help the Stock investor in the settlement when the trade is final.The functions of depository participants are laid out by SEBI.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/who-are-depository-participants-services-by-them\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-12-13T13:57:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-12-18T12:46:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/12\/Who-are-Depository-Participants.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/09\/81216.jpg","authorDescription":"Priyanka Bajpayee has done Masters in International Business Law and well versed in content writing covering the area of legal and finance. Also, she has practical experience of almost 1.5 years in Legal compliance and secretarial work.","postViews":523,"readingTime":3,"nextPost":{"id":27211,"slug":"rbi-revise-limit-on-p2p-lending-nbfcs"},"prevPost":{"id":27185,"slug":"angel-tax-for-startups-in-india"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/12\/Who-are-Depository-Participants.jpg","postTerms":"Startup","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/27203"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=27203"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/27203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/27206"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=27203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=27203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=27203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}