A depository can be compared to a bank. A depository holds securities like shares, debentures, bonds, Government Securities, units etc. of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities. At present two Depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (I) Limited (CDSL) are registered with SEBI.

A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP. This is similar to opening an account with any branch of a bank in order to utilise the bank's services.

The Depository facilities include,

Dematerialisation, Rematerialisation, repurchase/redemption of units of mutual funds, electronic settlement of trades in stock exchanges, receipt of non-cash corporate benefits such as bonus, in electronic form, transmission of securities, and other facilities like holding debt instruments in the same account, availing stock lending/borrowing facility , etc.

Sharewealth provides you all Depository services.

What is dematerialisation?

Dematerialisation is a process by which physical certificates are converted into electronic form.

Who is a Beneficial Owner (BO)?

"Beneficial Owner" is a person in whose name a demat account is opened with depository for the purpose of holding securities in the electronic form and whose name is recorded as such with the former.

Who is a Depository Participant?

A Depository Participant (DP) is an agent of the depository who is authorised to offer depository services to investors. Financial institutions, banks, custodians and stockbrokers complying with the requirements prescribed by SEBI/ Depositories can be registered as DP.

Who is an Issuer?

Issuer means any entity making an issue of securities

What is an ISIN?

ISIN (International Securities Identification Number) is the identification number given to a security of an issuer at the time of admitting such security in the depository system.

Whether different securities issued by the same Issuer will have same ISIN?

No, different securities issued by the same issuer will have different ISINs.

What services are provided by a DP?

Following services can be availed of through a DP:

Dematerialisation i.e. converting physical securities into electronic form.

Rematerialisation, i.e. converting electronic securities balances in a BO account into physical form.

To maintain record of holdings in the electronic form.

Settlement of trades by delivering/ receiving underlying securities from/in BO accounts.

Settlement of off-market trades i.e. transactions between BOs entered outside the Stock Exchange.

Providing electronic credit in respect of securities allotted by issuers under IPO or otherwise.

Receiving on behalf of demat account holders non-cash corporate benefits, such as, allotment of bonus and rights shares in electronic form or securities ensuing upon consolidation, stock split or merger/amalgamation of companies.

Pledging of dematerialised securities.

Facilitating Securities Lending and Borrowing, if the DP is registered as an "Approved Intermediary" for the purpose.