The Indian capital market has witnessed an unprecedented growth in the past few years, facilitated by modernization of the trading system. Automation of the trading infrastructure in 1994 has given us a trading system comparable with the best in the world. The establishment of a settlement guarantees scheme has removed counterpart risk in trading. Though the advent of automated trading brought with it several associated benefits such as transparency and equal opportunity for market players all over the country; the problems related to settlement of trades such as high instances of bad deliveries and delay in transfer of ownership have continued. As an answer to the myriad settlement problems, National Securities Depository Limited (NSDL) was inaugurated in November 1996 as the first depository in the country. Although India had a vibrant capital market, which is more than a century old, the paper-based settlement of trades caused substantial problems like bad delivery and delayed transfer of title till recently. The enactment of Depositories Act in August 1996 paved the way for establishment of NSDL, the first depository in India. This depository promoted by institutions of national statue responsible for economic development of the country has since established a national infrastructure of international standard that handles most of the trading and settlement in dematerialized form in the Indian market. Using innovative and flexible technological systems, NSDL works to support the investors and brokers in the capital market of the country. NSDL aims at ensuring the safety and soundness of Indian marketplaces by developing settlement solutions that increase efficiency, minimize risk and reduce cost. IDBI is the largest financial institution in India. It has been set up for providing credit facilities for the establishment and development of industries. UTI is the largest Mutual Fund in India. Established under UTI Act, 1963 with a view to encourage savings and participation in investments. NSE was established with a view to provide a fair, efficient and transparent securities market to investors all over the country has emerged as the largest stock exchange in India.
[...] Acceptance of invocation of hypothecation will appear in the DPM of the pledgee's DP and the pledgor's DP as a status change. Status of the hypothecation instruction will change to “Closed, Invoked” and the securities are transferred from the pledged balances of the pledgor to the pledgee's beneficial owner account. In case of rejection by the pledgor, the securities will continue to remain as pledged balances in the pledgor's account. The reasons for rejection will be displayed in the DPM of the pledgee's DP. [...]
[...] The account holder is called the beneficial owner in a depository system and the account is known as beneficiary account. Account Maintenance To avail of the various services offered by NSDL an investor/ a broker/ an approved intermediary (for lending & borrowing) has to open a NSDL depository account with any of its DPs. Depository accounts are of three types Beneficiary account: An investor who wants to hold securities in dematerialized (demat) form and receive or deliver securities by inter- account transfers must have a depository account called beneficiary account with a DP of his choice. [...]
[...] Newer services, opportunities like pledge / hypothecation and stock lending are given specifically by the depository system. C.) CORPORATE ACTIONS FEATURES Corporate actions are benefits given by a company to its investors. These may be either monetary benefits like dividend, interest or non-monetary benefits like bonus, rights, etc. NSDL facilitates the distribution of corporate benefits. Monetary benefits : NSDL will give the beneficiary ownership details to the Issuer / R&T Agent. The Issuer / R&T Agent will carry out the necessary processing and the distribution of such benefits will be outside the system. [...]
[...] Besides holding your securities, a depository also provides services related to transactions and securities. The only difference is that it deals with securities in electronic form and not in money. IDBI bank a leading provider of innovative, technology-driven products is offering Demat Account, a unique capital market investor oriented depository service. The Depositories Act defines a depository to mean company formed and registered under the companies act and which has been granted a certificate of registration under sub-section of section 12 of the Securities and Exchange Board of India Act, 1992”. [...]
[...] This system works through depository participants ( DPs) who offer services and the securities are held in the electronic form for the investor directly by the Depository. Share khan Depository Services offers dematerialization services to individual and corporate investors. We have a team of professionals and the latest technological expertise dedicated exclusively to our demat department, apart form a national network of franchisee, making our services quick, convenient and efficient. At Share khan, our commitment is to provide a complete demat solution which is simple, safe and secure. [...]
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