Who Is a De­pos­i­tory Par­tic­i­pant?

Consumer Voice - - Demat Account -

A de­pos­i­tory par­tic­i­pant is an agent of the de­pos­i­tory through which it in­ter­faces with the in­vestor and pro­vides de­pos­i­tory ser­vices. A de­pos­i­tory is an or­ga­ni­za­tion that holds se­cu­ri­ties like shares, deben­tures, bonds, gov­ern­ment se­cu­ri­ties, mu­tual fund units, etc., of in­vestors in an elec­tronic form.

Public fi­nan­cial in­sti­tu­tions, sched­uled com­mer­cial banks, for­eign banks op­er­at­ing in In­dia with the ap­proval of the Re­serve Bank of In­dia (RBI), state fi­nan­cial cor­po­ra­tions, cus­to­di­ans, stock­bro­kers, clear­ing cor­po­ra­tions/clear­ing houses, non-bank­ing fi­nan­cial com­pa­nies (NBFCs), and reg­is­trar to an is­sue or share trans­fer agent com­ply­ing with the re­quire­ments pre­scribed by SEBI can be reg­is­tered as a DP. Just like bank­ing ser­vices can be availed through a branch, de­pos­i­tory ser­vices can be availed through a DP.

As on 30 Septem­ber 2008, a to­tal of 711 DPs (266 NSDL, 445 CDSL) are reg­is­tered with SEBI.

Who Is a Sub-Bro­ker?

Sub-bro­ker means any per­son, not be­ing a mem­ber of a stock ex­change, who acts on be­half of a mem­ber bro­ker (DP) as an agent or oth­er­wise for as­sist­ing the in­vestors in buy­ing, selling or deal­ing in se­cu­ri­ties through such mem­ber bro­kers.

All sub-bro­kers are re­quired to ob­tain a cer­tifi­cate of reg­is­tra­tion from SEBI – with­out the cer­tifi­cate, they are not per­mit­ted to deal in se­cu­ri­ties. SEBI has di­rected that no bro­ker shall deal with a per­son who is act­ing as a sub-bro­ker un­less he is reg­is­tered with SEBI, and it shall be the re­spon­si­bil­ity of the mem­ber bro­ker to en­sure that his clients are not act­ing in the ca­pac­ity of a sub-bro­ker un­less they are reg­is­tered with SEBI as a sub-bro­ker.

It is manda­tory for mem­ber bro­kers to en­ter into an agree­ment with all the sub-bro­kers. The agree­ment lays down the rights and re­spon­si­bil­i­ties of mem­ber bro­kers as well as sub-bro­kers.

Bank

Holds funds in an ac­count. Trans­fers funds be­tween ac­counts on the in­struc­tion of the ac­coun­tholder.

Fa­cil­i­tates trans­fer with­out hav­ing to han­dle money.

Fa­cil­i­tates safe­keep­ing of money.

De­pos­i­tory

Holds se­cu­ri­ties in an ac­count. Trans­fers se­cu­ri­ties be­tween ac­counts the in­struc­tion of the ben­e­fi­cial owner ac­coun­tholder.

Fa­cil­i­tates safe­keep­ing of se­cu­ri­ties.

on (BO) Fa­cil­i­tates trans­fer of own­er­ship with­out hav­ing to han­dle se­cu­ri­ties.

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