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Depository Participant SEBI Registration
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Depository Participant SEBI Registration

Business Case Analysis for New Applicants.
Assistance in application filling for SEBI registration.
Advisory on building an SOP and Software Plan.
Regulatory and compliance support post-registration.
End-to-End Liaising with SEBI during registration.

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    Overview of Depository Participant

    A depository is a form of organization or institution which holds investor’s securities in the form of debentures, stocks, bonds, mutual fund units, government securities, etc. in electronic form at their request made through a legitimate depository participant. A depository also gives services related to transactions of the securities. 

    There are a few similarities between a depository and a bank as explained in the table below. 

    Depository Banks
    These Specialise in holding securities in their accounts. Banks hold funds of depositors in their accounts.
    These can transfer the securities between accounts on the instruction of a security account holder. They transfer the funds from one account to another on instructions of the account holder.
    They facilitate the transfer of security ownership without handling it themselves. Banks facilitate the transfer of funds without handling the money themselves.

    Main Functions and Specifications of a Depository

    It works as a connecting link between the listed companies responsible for issuing stocks and their shareholders. Companies listed in the stock exchanges issue their shares through agents associated with the companies. These agents are called depository participants (DP)s. A DP could be a bank, a broker, any financial institution, or any other entity which is eligible according to the norms prescribed by SEBI. DPs are responsible for the final transfer of the security from the depository to the shareholder. At the end of the transaction, the investor receives a confirmation from the depository.

    Specifications of a Depository Participant and Depositories

    A DP is an agent working as a link between the investors and depository, the relationship between the depository and DP are governed by the Depository Act. The depository participants could be any person, or any entity authorised by SEBI to conduct the activities of the DP. Both depositories and the DP are regulated under the norms of SEBI. As per the norms of SEBI, DPs can only operate after getting the license from SEBI post recommendation from CDSL and NDSL. 

    Types of Depositories

    As per the norms of the Depository Act 1996, two depositories were established in India named Central Depository Services Limited which was backed by Bombay Stock Exchange (BSE), SBI among others. The other depository was the National Securities Depository Limited (NSDL) backed by the National Stock Exchange (NSE), Industrial Development Bank of India (IDBI), Unit Trust of India (UTI), etc. 

    Works of a Depository:

    Rematerialization referred to as Remat, which is the process of converting securities present in electronic form within a Demat account back to physical certificates form.
    Dematerialization (usually referred to as Demat) process of converting physical certificates into the same no, of securities in electronic form.
    Transfer of securities and change of beneficial ownership.
    Settlement of trades conducted on stock exchange connected to the Depository.
    Pledging or Unpledging Securities for the loan against held stocks.
    Corporate action benefits for the investors are directly transferred to the Demat and checking account of the customer.
    Document Required

    Documents Required For Depository Participant SEBI Registration

    The following documents are required for Depository Participant SEBI Registration:

    Copy of Company registration certificate.
    Details of the promoters related to the company and documents mentioning details of their profile.
    Minimum net worth documentation.
    Other sorts of business information associated with the company.
    Memorandum of Association (MOA) and Articles of Association (AOA) of the company stating its objectives.
    Any other relevant document as asked by SEBI.

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      Procedure for Credit Rating Agency Registration

      The applicant intending to get registered must file an application to the board for the grant of registration in Form E, through a depository with which the applicant proposes to act as a participant, alongside the fees of INR 15,000.
      The depository then forwards this application to the board not later than 30 days of its receipt alongside the advice that the applicant complies with the eligibility criteria as laid out in regulations.
      On receipt of the application, the board may ask the applicant or depository to which applicant is going to be admitted as a participant, to furnish further information or be present face to face, if required for the grant of certificate. The board can even reject the application form if it believes that the form is not complete respect or does not conform to the prescribed instructions.
      For the aim of the grant of certificate of registration, the board considers all the matters which have relevance to hold out the activities of a Depository Participant as discussed in the next section.

      If the board is satisfied with the applicant’s eligibility for the grant of certificate, they grant the certificate of registration in Form F subject to the payment of fees as prescribed within the regulations.

      Eligibility Criteria to Get Depository Participant SEBI Registration

      The applicant should belong to at least one of the subsequent categories:
      1. State Financial Corporation.
      2. A public financial organization as defined.
      3. A clearing corporation of a stock market.
      4. Any foreign bank operating in India with the approval of RBI.
      5. A stockbroker who has been granted a registration certificate by SEBI.
      6. Such others as prescribed within the regulation.
      The applicant should be a fit and proper person.
      The applicant should be eligible to urge admission as a participant to the depository through which it is filled by the appliance to the board.

      As the depository system enhances the liquidity of securities within the market, they reduce the scope of any theft, fraud, and damages; therefore, the investor feels safe about investing in this model. So, for the applicant who is seeking or curious about starting their business as a DP, MUDS Management can help them in getting registered with SEBI and preparing all other documents as needed.

       

       

      Alternately Call our Legal Expert Now For Free Consultation at 09599653306

      Frequently Asked Questions on Depository Participant SEBI Registration

      Any person or entity recommended by any of the two Depositories and who is also one of the following can become a DP:

      1. State Financial Corporation.
      2. A public financial organization as defined.
      3. A clearing corporation of a stock market.
      4. Any foreign bank operating in India with the approval of RBI.
      5. A stockbroker who has been granted a registration certificate by SEBI.
      6. Such others as prescribed within the regulation.

      The depository participants could be any person, or any entity authorised by SEBI to conduct the activities of the DP. A DP is an agent working as a link between the investors and depository, the relationship between the depository and DP are governed by the Depository Act. Both depositories and the DP are regulated under the norms of SEBI.

      As per the norms of the Depository Act 1996, two depositories were established in India named Central Depository Services Limited which was backed by the Bombay Stock Exchange (BSE) and others. The other depository was the National Securities Depository Limited (NSDL) backed by National Stock Exchange (NSE) and others.

      A depository system enhances the liquidity of securities within the market. They reduce the scope of any theft, fraud, and damages; therefore, the investor feels safe about investing in this mode.

       

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