a project report on customer satisfaction towards depository participants at karvy mba babasab patil

A Study of Respondent Satisfaction towards Depository Participants at Karvy

Babasabpatilfreepptmba.com

EXECUTIVE SUMMARY

Karvy, the FINAPOLIS Ltd. is a stock Broking Company that deals in shares.

Apart from security broking Karvy is in to Demat services, Mutual fund and

Insurance services. It offers a wide range of financial services in order to meet

different individuals financial planning.

The project emphasizes on “Customer satisfaction towards depository

participants”

Objectives of the Study:

To know the function of DP.

To know the percentage of have satisfied the service of DP.

To know how demat account is helping in the trading

To know the exception of the customer.

To know the loops and draw backs of DP.

Research Methodology:

Data source:

Primary Data: Through Questionnaire

Secondary Data: Karvy‟s Record & Report, Magazine & Websites.

Sample size: 100 customers of Karvy Stock Broking Ltd.

Area Covered for research: Only Dharwad KARVY customers.



Sampling Procedure: Random sampling method from available database. In the

present scenario the service industry has given an utmost importance of doing a

particular task at a fastest time in order to satisfy the customer and to attract new

customer. In this project we can find out the customer of Karvy Consultant have

satisfied with demat service and this DP is overcoming the disadvantages of the

physical trading of the securities in the stock exchange.



FINDINGS:

1) I have carried out this exercise on Dematerlisation. So in my studies I have tried to

see whether the customer have satisfied the service given by depository participants.

2) I have also seen that awareness of KARVY service given by Karvy finical

consultant is from friends.

3) It is also seen that more than 84% of the respondent have satisfied with the service

of demat.

4) It is also seen that more than 55% to 60% of the respondent has satisfied with the

service of Freezing/ Defreezing and loan against share. Also 40% respondents are not

aware about these services.

5) Also found that nearly 2% of the respondents are dissatisfied with bill Acceptance.

6) 5% improper format of Holding/Transaction statement and 4% Frequently

reminders are given to karvy consultant ltd., for update the information Are

Dissatisfied.

7). 38% of respondent feel tariff structure of Karvy Stock Broking Ltd charged is high

and very high.

8) Also found that 53% respondent have satisfied 80% of the service

9). 35% of respondent prefer Karvy Stock Broking Ltd DP to Other Dp because

Of Quality service And, 40% for safety service.



INTRODUCTION

India has two hundred years old tradition in Securities. Infact that first India

stock exchange established in Bombay is the oldest in Asia. The earliest security

dealings were Transactions in loan securities of East India Company, the dominant

institution of those days. Corporate Shares came into the picture by 1830‟s and

assumed significance with the Companies Act of 1956. In 1887 the broker community

gave birth to the “Native share and stock brokers Association” which is now known as

the Bombay Stock Exchange.

The Indian Capital grew at a very moderate rate from 1951 to 1980. However

it registered an impressive growth in 1980s. the process of liberalization and the

transparency in operation has raised the interest of foreign investors in India. Till

1978 there were only 8 recognized exchanges in India. Initially the exchange operated

on an outcry system i.e. manual system of trading Due to increase in the trading

volumes, the number of issuer increased substantially, and the birth of NSES highly

transparent automated system come into existence Even then there was an increase in

paper work causing a gridlock at every stage in the stock market This delays the

clearance and settlement of traders, registration of securities in the shareholder name

and due this it increased the back office paper work intermediaries These outdated

systems have increased settlement risks and have rendered the implementation of a

delivery of a versus payment system impossible. National Stock Exchange of India

Limited to provide electronic depository facilities for securities traded in the equity

and the debt market. NSDL commenced its operations in the year 1996 and is the first

depository in India.



DESIGN OF THE STUDY

Tile of the project:

“Service Analysis & Customer satisfaction towards Depositary participants”.

Statement of the Problem: KARVY STOCK BROKING Ltd is providing the Demat

service. Hence in this report an attempt is made to know the present customer

satisfaction towards depository participants.

RESEARCH OBJECTIVES:

To know the function of DP.

To know the percentage of have satisfied the service of DP.

To know how demat account is helping in the trading

To know the exception of the customer.

To know the loops and draw backs of DP.

.



METHODS AND METHODOLOGY

Sampling Design:

Sampling since segment wise investors in KARVY STOCK BROKING Ltd

were available the overall customers were considered for the study. Hundred

Percent coveraged. Hence random sampling survey method was adopted for

the purpose of the study.

Sampling Size: A sample of 100 was chosen for the purpose of the study.

Sample consisted of small investor, large investors and traders of KARVY

STOCK BROKING Ltd.

Sampling Procedure: From large number of customer of KARVY STOCK

BROKING Ltd. Were randomly selected from the available customer

database.

Field Study: Directly approached respondents.

DATA COLLECTION METHOD:

1. PRIMARY DATA: For a study of this nature primary data is collected through

Questionnaire.

2. SECONDARY DATA: This is been is collected through Karvy‟s Record &

Report, Magazine & Websites.

MEASUREMENT TECHNIQUE:

For this purpose measurement technique used for survey is

questionnaire to collect information from the respondent

ANALYTICAL TECHNIQUE:

Statistical technique used for measuring the response is in terms of percentage.



LIMITATION OF STUDY

Since Sample size is only 100 all Hundred customers are approached .

Since segment wise investor is available in KARVY STOCK BROKING Ltd.

Overall concept is taken for the study.

Information is partly based on secondary data and hence the authenticity of the

study can be visualized and is measurable.

Level of accuracy of the results of research is restricted to the accuracy level

with which the customers have given their answers and the accuracy level of

the answers cannot be predicted.

BACKGROUND

Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice,

flows freely towards attaining diverse goals of the customer through varied services.

Creating a plethora of opportunities for the customer by opening up investment vistas

backed by research-based advisory services. Here, growth knows no limits and

success recognizes no boundaries. Helping the customer create waves in his portfolio

and empowering the investor completely is the ultimate goal.

KARVY, is a premier integrated financial services provider, and ranked

among the top five in the country in all its business segments, services over 16 million

individual investors in various capacities, and provides investor services to over 300

corporate, comprising the who is who of Corporate India. KARVY covers the entire

spectrum of financial services such as Stock broking, Depository Participants,

Distribution of financial products - mutual funds, bonds, fixed deposit, equities,



Insurance Broking, Commodities Broking, Personal Finance Advisory Services,

Merchant Banking & Corporate Finance, placement of equity, IPOs, among others.

Karvy has a professional management team and ranks among the best in technology,

operations and research of various industrial segments.

The birth of Karvy was on a modest scale in 1981. It began with the vision

and enterprise of a small group of practicing Chartered Accountants who founded the

flagship company…Karvy Consultants Limited. We started with consulting and

financial accounting automation, and carved inroads into the field of registry and

share accounting by 1985. Since then, we have utilized our experience and superlative

expertise to go from strength to strength…to better our services, to provide new ones,

to innovate, diversify and in the process, evolved Karvy as one of India‟s premier

integrated financial service enterprise.

Thus over the last 20 years Karvy has traveled the success route, towards

building a reputation as an integrated financial services provider, offering a wide

spectrum of services. And we have made this journey by taking the route of quality

service, path breaking innovations in service, versatility in service and

finally…totality in service.

Our highly qualified manpower, cutting-edge technology, comprehensive

infrastructure and total customer-focus has secured for us the position of an emerging

financial services giant enjoying the confidence and support of an enviable clientele

across diverse fields in the financial world.

Over the years we have ensured that the trust of our customers is our biggest

returns. Factors such as our success in the Electronic custody business has helped



build on our tradition of trust even more. Consequentially our retail client base

expanded very fast. Our values and vision of attaining total competence in our

servicing has served as the building block for creating a great financial enterprise,

which stands solid on our fortresses of financial strength - our various companies.

With the experience of years of holistic financial servicing behind us and years

of complete expertise in the industry to look forward to, we have now emerged as a

premier integrated financial services provider.

And today, we can look with pride at the fruits of our mastery and experience

– comprehensive financial services that are competently segregated to service and

manage a diverse range of customer requirements.

GROUP OF COMPANIES

KARVY SECURITY LTD

Deals in distribution of various investment products, viz, equities,

Mutual fund, bounds debenture fixed deposits, insurance policies & other

financial products

Member –Hyderabad stock Exchange (HSF)



KARVY STOCK BROKING LTD.

Deals in buying & selling equity shares & debenture &on the national stock

exchange (NSE), the Hyderabad stock exchange & over the counter exchange

of India (OTCEI)

Member-national stock exchange (NSE)

KARVY CONSULTANTS LTD

Transfer agency services for corporate & mutual funds

Registrar for IPO\book building

Depositary participant services

Registered with both NSDL/CDSL

It enable services –MT/call center /data classification

Karvy .com comprehensive financial advisory site

KARVY INVESTER SERVICES LTD.

Deals in issue management, investor banking & merchant banking of fixed

income & other financial products.

Trading through BSE

DEPOSITARY SEVICES

Registered as DP both with NSDL & CDSL

Serving over 2 lac investors

Online connectivity at Hyderabad, Lucknow &Bangalore

Ranked among the top 5 DPS in the country

High synergy with registry & broking activities for higher services levels to

the customer information



Web based customer information

Provision of service in over 75 locations

IT SERVICES GROUP

1. Medical transcription

First strategic initiative into global processing

Among the top MT companies in India

2.E-BUSINESS GROUP

Strategic intent: to develop a comprehensive financial services portal

which includes

Investor servicing: mutual funds, corporate shareholders & depository

clients.

Distribution of financial products

Net trading

Insurance distribution

1. Call center

2. Started with a 30 agent e-call center



MISSION

Our mission is to be a leading, preferred service provider to our customers,

and we aim to achieve this leadership position by building an innovative, enterprising

and technology driven organization which will set the highest standards of service and

business ethics.

QUALITY POLICY

To achieve and retain leadership, Karvy shall aim foe complete customers

satisfaction, by combining its human and Technological resources, to provide superior

quality financial Services. In the process, Karvy will strive to exceed Customer‟s

expectations.

QUALITY OBJECTIVES

As per the Quality Policy, Karvy will:

1. Build in- house process that will ensure transparent and harmonious

relationship with its clients and investors to provide high quality of services.

2. Establish a partner relationship with its investor service agents and vendors

that will help in keeping up its commitments to the customers.

3. Provide high quality of work life for all its employees and equip them with

adequate knowledge &skills so as to respond to customer‟s need.

4. Continue to uphold the values of honesty & integrity and strive to establish

unparalleled standards in business ethics.

5. Use state –of – the art information technology in developing new and

innovative financial products and services to meet the changing needs of

investors and clients.



6. Strive to be a reliable source of value-added financial products and services

and constantly guide the individuals and institutions in making a judicious

choice of it. Strive to keep all stake- holders (shareholders, clients, investors

and regulatory authorities) proud and satisfied.

Achievements

Among the top 5 stock brokers in India (4% of NSE volumes)

India's No. 1 Registrar & Securities Transfer Agents

Among the to top 3 Depository Participants

Largest Network of Branches & Business Associates

ISO 9002 certified operations by DNV

Among top 10 Investment bankers

Largest Distributor of Financial Products

Adjudged as one of the top 50 IT uses in India by MIS Asia

Full Fledged IT driven operations



MILESTONE



ORGANIZATION CHART

Managing Director

Chief Managing Director

Vice-President Vice-President Vice-President Vice-

President

Karvy Karvy Karvy Karvy

Securities Stock Broking Consultants Investors

Services

Ltd. Ltd. Ltd. Ltd.

Deputy Deputy Deputy Deputy

General General General General

Manager Manager Manager Manager

Senior Senior Senior Senior

Manager Manager Manager Manager

Branch Manager

N number of Team Leaders

N number of Executives



INTRODUCTION

Dematerialization or "Demat" is a process whereby your securities like shares,

debentures etc, are converted into electronic data and stored in computers by a

Depository. Securities registered in your name are surrendered to depository

participant (DP) and these are sent to the respective companies who will cancel them

after "Dematerialization" and credit your depository account with the DP. The

securities on Dematerialization appear as balances in your depository account. These

balances are transferable like physical shares. If at a later date, you wish to have these

"Demat" securities converted back into paper certificates, the Depose Depository

functions like a securities bank, where the dematerialized physical securities are

traded and held in custody. This facilitates faster, risk free and low cost settlement.

In order to dematerialize certificates; an investor will have to first open an

account with a DP & then request for the dematerialization of certificate by filling up

a dematerialization request form (DRF), which is available with DP & submitting the

same along with the physical certificates. The investor has to ensure that before the

certificate are handled over to the DP For demat, they are defaced by marking

“Surrendered for dematerialisation” on the face of the certificates. Depository is

much like a bank and perform many activities that are similar to a bank.

Just as one opens a bank account in order to avail of the services of a bank, an

investor opens a depository account with a depository participant in order to avail of

depository facilities.



Following table compares the two.

Bank Depository

Holds funds in accounts Holds securities in account

Transfers funds between accounts Transfers securities between accounts

Transfers without handling money Transfers without handling securities

Safekeeping of money Safekeeping of securities

Transacting the depository way has several advantages over the traditional system

of transacting using share certificates. Some of the benefits are:

Trading in demat segment completely eliminates the risk of bad deliveries,

which in turn eliminates all cost and wastage of time associated with follow up

for rectification. This reduction in risk associated with bad delivery has lead to

reduction in brokerage to the extent of 0.5% by quite a few brokerage firms.

In case of transfer of electronic shares, you save 0.5% in stamp duty.

You also avoid the cost of courier/ notarization/ the need for further follow-up

with your broker for shares returned for company objection

In case the certificates are lost in transit or when the share certificates become

mutilated or misplaced, to obtain duplicate certificates, you may have to spend

at least Rs500 for indemnity bond, newspaper advertisement etc, which can be

completely eliminated in the demat form.

You can also receive your bonuses and rights into your depository account as

a direct credit, thus eliminating risk of loss in transit.

You can also expect a lower interest charge for loans taken against demat

shares as compared to the interest for loan against physical shares. This could



result in a saving of about 0.25% to 1.5%. Some banks have already

announced this.

RBI has increased the limit of loans against dematerialized securities as

collateral to Rs2mn per borrower as against Rs1mn per borrower in case of

loans against physical securities.

RBI has also reduced the minimum margin to 25% for loans against

dematerialized securities as against 50% for loans against physical securities.

In short the advantages of opening a demat account are

Shorter settlements thereby enhancing liquidity

No stamp duties on transfer of securities held in demat form.

Elimination of risk associated with physical certificated such as bad delivery,

fake securities.

Reduction in handling large volume of paper;

Nomination facility

Transmission of securities (such as shares, debentures, bonds and units) is

done by DP eliminating the need to correspond with each company separately.

Change of name, address, dividend mandate, registration of power of attorney,

transmission etc. can be effected across companies held in demat form by a

single instruction to the DP

Though under the Depositories Act, 1996, there is no compulsion and the

investor can hold shares either in physical or in dematerialized form. But according to

Sebi‟s directive certain shares have to be traded compulsorily in dematerialized form

where the seller cannot sell in physical form. However, after he has bought the shares

the investor can ask for rematerialization of the shares.



The Depository Account must be opened with a Depository Participant. NSDL

interfaces with investor trough Depository Participants (DPS). A list of names and

addresses of all Authorized DP‟s is available with the NSDL and CDSL and one can

meet any of these DP‟s place and make a choice at your based on your comfort and

convenience. Opening a depository account is as simple as opening a bank account.

One can open a depository account with any DP.

To open a Depository Account, you have to submit the duly filled in Account

Opening form along with the following documents:

Fill up the account opening form, which is available with the DP.

Residential Proof - Copy of Ration Card, Passport, Driving License,

Telephone Bill, Electricity Bill or Rental Agreement.

Sign the DP-client agreement, which defines the rights and duties of the DP

and the person wishing to open the account.

Receive your client account number (client ID).

This client ID along with your DP ID gives you a unique identification in the

depository system.

There is no restriction on the number of depository accounts a person can

open. However, if your existing physical shares are in joint names, you have to open

the account in the same order of names before you submit your share certificates for

demat. A sole holder of the share certificates cannot add more names as joint holders

at the time of dematerializing his share certificates.

However, if the investor wants to transfer the ownership from his individual

name to a joint name, he should first open an account as the sole holder (account A)



and dematerialize the share certificates. He should then open another depository

account (account B) in which he is the first holder and the other person is the second

holder and make an off market transfer of the shares from the account A to account B.

The investor will incur a charge on this transaction. Alternatively, the certificates can

be transferred to the joint ownership and then sent for Dematerialization.

Right now, as per the Companies Act, there is no nomination facility for

shares (whether in the physical or in the electronic form). The nomination facility for

shares can be availed of only when the relevant provisions in the Companies Act are

amended. NSDL captures the details of the nominee when the account is opened so as

to offer the facility as soon as the relevant amendments are effected in the Law.

A client can choose to open more than one account with same DP. In addition

to this, he has a choice of opening accounts with more than one DP. However a broker

can open just one Clearing Member account per card/ stock exchange for clearing

purpose, but he can still open multiple beneficiary accounts Beneficiary is the

personal account wherein brokers can keep their personal holdings.

Account opening

Any investor who wishes to avail depository services must first open an

account with a depository participant of NSDL The process of opening a Demat

account is very similar to a bank account The investor can open an account with any

depository participant of NSDL An investor may open an account with several DPs or

he may open several account with single There are several DPs offering various

depositary related services. Each DP is free to fix its own fee structure Investors have

the freedom to choose a DP based on criteria like convenience , comfort has to enter



into an agreement with the DP The form and contents of this agreement are specified

by the business rules of NSLD

Types of depositary account depends on the operation to be performed There are

three types of Demat accounts which can be opened with a depositary participant viz

(a) Beneficiary Account (b) Clearing member Accounts and (c) intermediary account

Types of accounts

Beneficial owner Clearing member Intermediary

Account Account Account

House Non-House

A DP may be required to open three categories of accounts for client –

beneficiary account, clearing member account and intermediary account

A beneficiary account is an ownership account The holder/s of securities in

this type of account own those securities

The clearing member account and intermediary account are transitory account

The securities in these are held for commercial purpose only

A clearing member account is opened by a broker or a clearing member for the

purpose of settlement of trades

An intermediary account can opened by a SEBI registered intermediary for the

purpose of stock leading and borrowing



BENEFICIARY ACCOUNT

This is an account opened by investor to hold their securities in

dematerialized from with a depository and to carry out the transactions of sale

purchase of such securities in book entry form through the depositary system A

beneficiary account holder is legally entitled for all rights and liabilities attached to

the securities held in that account Therefore, the account is called “beneficial owner

account” a beneficial account can be in the name of individual, corporate, HUF,

minor, bank, financial institution , trust etc or the broker himself for the purpose of his

personal investments in demat form . The account is opened with a DP

House account vs. non –house account opened by a DP for the custody of

and transactions in its own investment is referred to as a house account DPS Are

required to open house accounts for their own investments to prevent co-mingling of

asset with that of their clients

Neither the depositories ACT nor the regulations made under the act lay

down any specifications about who can open a beneficiary account since all beneficial

owners are deemed to be member of a company (under section 41 (3) of the

companies act) only those who are eligible to become members of a company act can

open a beneficiary account with a depository Thus all legal entities with the exception

of partnership firms can open an account in the depository system

Documents for verification: For the purpose of verification, all investors have

to submit the following documents along with the prescribed account opening form

Proof of identity- a beneficiary account must be opened only after obtaining a

proof of identity of the applicant The applicants signature and photograph must be

authenticated by an existing account holder or by the applicant bank or after due



verification made with the original of the applicants valid passport , voter id , driving

license or PAN card with photograph and further

Proof of address- The account opening form should be supported with proof

of address such as verified copies of ration card/ passport/ voter ID/ PAN card/driving

license / bank passbook an authorized official of the participant, under his signature,

shall verify the original documents

In case any account holder fails o produce the original documents for

verification within the foreside period of 30 days, it must be immediately brought to

the notice of NSDL Failure to produce the original within the prescribed time would

invite appropriate action against such account holder, which could even include

freezing of their accounts

Common information: The process of opening an account with a depository,

nature of such an account, and various factors to be considered for opening a

depository account are explained below. Some details are common to all types of

accounts. These are:

1. Name of the holder

2. Date of birth (for individual accounts)

3. Occupation

4. Address & phone / fax number

5. Bank details like name of the bank, type of the account (current/savings),

accounts number, branch address, MICR, etc

6. PAN number, if applicable

7. Details of nomination

8. Specimen signatures

Beneficiary account- procedure for opening an account



Investor have the choice of selecting a DP based on their convenience,

comfort, service, levels, safety, reputation charges, etc they have flexibility to have

more than one account with the same DP or any other DPS No minimum balance is

required for opening a depository account Investor also have the freedom to close an

account with one DP and open another one with any other DP

The type of the account opening from to field by an investor and the list of

documents required depend on the type of beneficiary account to be opened –whether

it is for NRI‟s or corporate or individual Further, the individual account can be in a

signal name or joint name clearing members and brokers have to open in a beneficiary

account if they have to deal with their own holdings

There are several client types in the depository system and different codes are

allotted to them. These are listed below

1. Resident

Ordinary

HUF

2. Financial institutions

Government –sponsored FI

State financial corporation

Other

3. FIIS

Mauritius –based

Others

4. NRI

Repatriable

Non-Repatriable

Depository receipt



5. Body corporate

Domestic company

Overseas corporate body Repatriable

Government company

Central government

State government

Co-operative body

NBFC

Non –NBFC

Broker

Foreign bodies

Group companies

Others

OCB-Nonrepatriable

Depository receipt

6. CM (clearing member)

7. Foreign national – national /depository receipt

8. Mutual fund –depository receipt

9. Trust, Bank

10. Intermediary

Clearing Member Account

The entities that are authorized to pay out from a clearing corporation/ clearing

house against traders done by them or their clients are known as clearing members.

CMs are identified in the system through their CM-BP ID. All pay-in and pay-out

transactions are carried out through their accounts.



There are two types of clearing members:

1. All members of a stock exchange popularly know as brokers, are clearing

members;

2. Custodians who are permitted by the stock exchange to act as a clearing

members.



PROCEDURE TO OPEN A CLEARING MEMBER ACCOUNT

The steps undertaken to open the account are same as those of the individuals,

difference lies in the type of the clearing members has to first register itself with the

depository and obtain a business partner identification number (CM-BP-ID). The

clearing member is identified by the combination of CC-CM-ID given by the DP.

Immediately after opening a clearing account, the DP should inform the

depository the details of clearing members name, CM-BP-ID, client-ID, and date of

the opening the account in DPM system.

The clearing account should only be for clearing and settlement purpose and

nit for any other purpose, e.g., holding of securities received in a settlement received

in a settlement account should be transferred to the transferred to respective beneficial

accounts as soon as possible, but in no case later than the time prescribed by the

depository/ stock exchange/ SEBI in this regard. The opening of clearing members

account constitutes a “standing instruction” to receive credits from the clearing

corporation when there is a pay-out.

The Clearing House deals with ONLY ONE designated account for pay-in

and pay-out with the Broker. This single account allows you to know to which

account securities must be delivered and received from. One Clearing Member Pool

Account is opened per card / Stock Exchange to settle trades in the Dematerialised

form.

Structure Of Clearing Account

The clearing account is identified in the depository system by its CM-BP-ID.

The internal structure of the Clearing Account consists of three parts to facilitate easy

book keeping.



Arrangement of clearing account

Pool Account

Delivery Account

Receipt Account

Clearing Corporation (CC)/Clearing House (CH)

Clearing Account

Delivery Account Pool Account Receipt Account

a) Pool Account: It has two roles in clearing of Securities, viz., before pay-in, the

selling client of the clearing member transfers securities from his client Account

to the Clearing Account. After receiving pay-out, the clearing member transfers

securities from his Clearing Account to the account of the buying client.

b) Delivery Account: The securities before pay-in, the securities move from the

Pool Account To the Delivery Account. The movement will be automatic if

clearing member has given such an undertaking to its Clearing If the Clearing

Corporation. It will be effected on the basis of instruction received from the

Clearing house/ Clearing Corporation. If the clearing house/ Clearing Corporation

has not taken such undertaking, the clearing member to its DP must submit a

delivery instruction form. At the time of pay-in, NSDL flushes out the securities

in the Delivery Account & transfers the same to the Clearing house/ Clearing

Corporation.

Selling

client

Buying

Client



c) Receipt Account: On pay-out day, the Clearing house/ Clearing Corporation

transfers securities to the Pool Account (to The extent of net receipt) through the

Receipt Account. This account can be used to trace details of settlement-wise

receipt of the clearing member.

Market Type & Settlements Number: A clearing account can be broken into

compartment and sub-compartments. Each compartment can be called as market type

and be as settlement number. Hence, if securities are moved from any clearing

account, apart from the CM-BP-ID, the combination of market type and settlement

number must be provided. A diagrammatic illustration of the internal structure of a

clearing account is depicted in next page.



Settlement calendar: Settlement calendar is decided by the stock exchange. It

contains details for each market type & settlement number. The detail for each

settlement consists of the date of trading, pay-in time, pay-out date, settlement

number etc. Clearing member can obtain the settlement calendar from its own stock

exchange. This is also available in the depository software of the DP.

MARKET TRANSFERS: Any trade, which is cleared & settled by the clearing

house/ Clearing Corporation of the stock exchange, is considered as a market trade in

the depository. Consequently, the transfers routed through the clearing account.

Typically, a market trade has the following legs of transactions.

a. Receiving securities for pay-in from clients (client to clearing members)

Physical Rolling Action Rolling

2000014 Delivery Pool Receipt









Clearing Account

(IN503265)



b. Delivering securities to the clearing house/clearing corporation for pay-in.

(clearing house/clearing corporation)

c. Receiving pay-out from the clearing house/clearing corporation. (Clearing

House/clearing Corporation to clearing member)

d. Distribution of pay-out to clients. (Clearing member to client)

A diagrammatic illustration of the settlement of a market trade in a depository

is depicted below:

D C

A B

DP of Seller‟s

CM

DP of Buyer‟s

CM

DP of Seller

NSDL CH/CC

DP of buyer



Receiving securities for pay-in from clients (client to clearing member)

A selling client of a clearing member (broker) would transfer securities from

his beneficial owner account to the clearing account of the clearing member for

onwards delivery to the clearing house/clearing corporation. This transfer is effected

by his DP on the basis of a delivery instruction provided by the selling client. A

diagrammatic Illustration for securities received for pay-in from clients is depicted

below:

Indicates flow of securities

Indicates paper /electronic instruction given.

OFF MARKET TRANSFERS: Any trade, which is not cleared and settled by

the clearing house/clearing corporation of the stock exchange, is considered as an off-

market trade in the depository. Consequently, the transfer is not routed through the

clearing account. Such transfers take place directly between two beneficiary accounts.

NSDL

DP1 DP2

Seller A

AAAlle

r A

Clearing

Member Seller C Seller B



Both buyer and seller may open account either with the same DP or with different

DPs. The buyer and seller will trade amongst themselves and later on will exchange

money, i.e., settle funds amongst themselves. The selling client would deliver

securities from its beneficiary account to the beneficiary account of the buying client.

This transfer is effected by the DP of the selling client on the basis of a delivery

instruction provided by the selling clients. A diagrammatic illustration of the

settlement of an off-market trade in depository is depicted below:

Indicates flow of securities

Indicates paper /electronic instruction given.



Depository:

A Depository is a Company where the shares of an individual are held in the

electronic form, at the request of the shareholder. This eliminates the physical form of

holding. IDBI, UTI, SBI and NSE promoted the National Securities Depository

Limited (NSDL). The Central Securities Depository Limited (CDSL) was promoted

by BSE.

Your money may be held in the form of liquid cash at your home or may be

deposited in a bank. The bank holds your funds in the electronic form and

subsequently debits or credits the account. Depending on your issuance of cheques or

deposit of cheques. The advantages of safety and convenience of dealing with a Bank

overweigh the reasons for holding liquid cash in your home. Your financial assets

such as Equity Shares may be compared to the above example. You may hold

physical share certificates in your home and be exposed to the various risks of lack of

safety, mutilation, loss etc. Alternatively, you may deposit your shares in an

organization called a Depository, which holds your shares in the electronic form. You

can dematerialize shares of only those companies that have signed agreement to

dematerialize their shares with the depository. You cannot dematerialize shares if they

are not in your name, i.e. shares held in street name (market deliveries) cannot be

dematerialized. However, when you send shares to the registrar to be transferred to

your name you can request that you want those shares in dematerialized form.

Karvy Consultants Ltd. has four DPMs as on date. They are:

1.Hyderabad-IN300394

2.Lucknow - IN301557



3.Bangalore- IN301926

4. Mumbai - IN302470

In India depositories are required to be registered with SEBI and are governed

by the provision of the Depositories Act, 1996 and regulation and bylaws framed for

depositories by the SEBI.

The depositories work in a completely computerized environment with

electronic linkages with the point of origination for the transactions that may cause

the change in ownership of securities. A depository will be electrically linked with

the Register of the members maintained by the company/registrar, clearing and

settlement system in the stock exchanges, stock lending organization (if in existence),

custodians of securities, depository participants and brokers.

Function of Depository

Dematerlisation: one of the primary functions of depository is to eliminate or

minimize the movement of the physical securities in the market. This is achieved

through dematerialisation of securities. Dematerlisation is the process of converting

securities held in physical form into holdings in book entry form.

Account Transfer: The depository gives effect to all transfers resulting from the

settlement of trade and other transactions between various beneficial owners by

recording entries in the accounts of such beneficial owners.

Transfer and Registration: A transfer is the legal change of ownership of a security

in the records of the issuer. For effecting a transfer, certain legal steps have to be

taken like endorsement, execution of a transfer of security occurs merely by passing



book entries in the records of the depositories, on the instructions of the beneficial

owners.

Corporate Actions: A depository may handle corporate actions in two ways. In the

first case, it merely provides information to the issuer about the persons entitled to

receive corporate benefits. In the other case, depository itself takes the responsibility

of distribution of corporate benefits.

Pledge and hypothecation: Depositories allow the securities placed with them to

be used as collateral securities in physical form to the lender or its custodian. These

securities are verified for authenticity and often need to be transferred in the name of

lender. This has a time and money cost by way of transfer fees or stamp duty. If the

borrower wants to substitute the Pledging/Hypothecating the securities makes the

process very simple and collateral accounting through book entries in the records of

the depository.

Linkage with clearing system: whether it is a separating clearing corporation

attached to a stock exchange or a clearing house (department) of a stock exchange, the

clearing system performs the function of ascertaining the pay-in (sell) or pay-out

(buy) of brokers who have traded on the stock exchange. Actual delivery of securities

to the clearing system from the selling and delivery of securities from the clearing

system to the buying broker is done by the depository. To achieve this, depositories

and the clearing system should be electronically linked.



Depository Participant:

Depository Participant (DP) is an organisation that acts as an Agent of the

Depository and interacts with the investor. A DP is responsible for maintaining your

securities account and operating it only under your written instructions. The

Depositories Acts mandates that investors can use Depository facilities only through

DP‟s. The distribution channel and geographical spread of the DP‟s offices allows

you to access the Depository at a low cost. DP can only access their own clients'

information. They cannot access the client information of any other DP. The

information of your holdings in the account is completely confidential& it is similar

to your account balance in a bank.

You can select your DP to open a demat account just like you select a bank for

opening a savings account. Some of the important factors for selection of a DP can be:

1. Convenience - Proximity to your office/residence, business hours.

2. Comfort - Reputation of the DP, past association with the organisation,

whether the DP is in a position to give the specific service you may need?

3. Cost - The service charges levied by DP and the service standards.

Individual accounts can be opened by Ordinary Resident, HUF, NRI

Repatriable and NRI Non-Repatriable. Body Corporate, Banks, Trusts, Financial

Institutions, Foreign Institutional Investors, and Overseas Commercial Banks etc can

open corporate Accounts. An account can be opened in the name of HUF in a similar

way to individual account and mentioning the account category as HUF. However,

Kartha of HUF will sign the application, agreement and all transactions under the

account



An account cannot be opened in the name of the firm. It has to be opened in

the name of any of the Partner as an Individual account only.

Procedure for Dematerialisation

Dematerialisation Process:

1

2A 2 5

3

4

Steps:

1. Client/ investor submits the DRF (Demat Request Form) and Physical

certificates to DP. DP checks whether the securities are available for demat.

Client defaces the certificates by stamping „Surrender for Dematerlisation‟.

DP punches two holes on the name of the company and draws two parallel

lines across the face of the certificate.

2. DP enters the demat request in his system to be sent to NSDL. DP dispatches

the physical certificates along with the DRF to the R & T Agent.

3. NSDL records the details of the electronic request in the system and forwards

the request to the R&T Agent.

4. R&T Agent, on receiving the physical documents and the electronic request,

verifies and checks them. Once the R&T Agent is satisfied, Dematerialisation

of the concerned securities is electronically confirmed to NSDL.

Investor

R & T Agent

DP

NSDL



5. NSDL credits the dematerialized securities to the beneficiary account of the

investor and intimates the DP electronically. The DP issues a statement of

transaction to the client.

a. DPs provide Dematerlisation request forms (DRF) to their clients.

b. The client completes the DRF in all respect 7 submits to the DP along with the

security certificates to be dematerialized.

c. The DP checks the DRF for validity, completeness and correctness. The

following points should be checked particularly:

The security certificate sought to be dematerialized are attached to DRF.

The attached security certificates are marked (defaced) with the words

„surrendered for dematerialisation‟. This is a precautionary measure to

prevent misuse of share certificates by anyone.

The certificate are not mutilated or defaced in a manner affecting any

material information.

The name of client on DRF and the certificates is exactly the same as in

the client‟s account in DPM. However, minor variations in the name (like

abbreviated name, initials in the place of first name, middle name, minor

name mistake in the name) may be permitted if it can be reasonably

established that both names are of the same person. The permitted

variations refer to initials not being spelt out fully or put prior to after the

surname. In such cases, if the signature on the DRF matches the specimen

signature available with the DP, the securities can be considered for demat.

Details like security type, face value, paid-up value, pari passu status,

certificate numbers, distinctive numbers, number of certificates, total

quantity of securities and lock-in statues are filled-in correctly.



d. If the DRF & the accompanying security certificates are found in order, the

DP should accept the DRF and certificates.

e. If DRF and the accompanying security certificates are not found in order, the

DP should return the DRF and certificates.

f. The DP should enter the dematerialisation request in the DPM. DPM generates

a request number (DRN), which should be mentioned on DRF.

g. An authorized person, other than one who entered the DRF details in the

DPM, should verify the details of DRN and release a request to NSDL.

h. Once the DP has received the certificates defaced by investor, the DP punches

two holes on the name of the issuer or its R&T Agent for dematerialisation.

DRF and enclosures have to be sent at the “address to which physical

certificate to be sent” communicated by NSDL. The forwarding letter should

refer to the allotted DRN and should refer to the allotted DRN and should Be

sent within seven days of accepting it from the client.

i. The issuer or its R&T Agent verify the DRF & the accompanying certificate

for validity, completeness and correctness. They also match the details with

the intimation received from NSDL against the same DRN.

j. In case DRF is not found in order, the issuer or its R&T Agent send an

objection memo to the DP, with or without DRF & security certificates

depending upon the reason for rejection.

k. DRFs & Certificate are sent back on the following grounds:

DRN does not match with message from DM

Quantity of actual securities is less than DRF

Quantity of actual securities is more than DRF



l. DRF & certificate are not sent back:

If the certificate is fake

If the certificate has been reported to be stolen

If the duplicates of the original certificates sent for demat have already

been issued

If the endorsements are forged

If the securities are not in the name of the account holder as per DRF

If the details of the certificates do not pertain to the R&T Agent

If the signatures differ

If there is any court order on the securities

If the certificate are received after 15 days of the electronic request.

m. The DP informs the client accordingly & requests removal of reasons for

objection. The DP removes these or provides additional information to the

issuer or its R & T Agent within 15days of receiving the objection memo.

n. The DP, if the client so requires, may generate a new dematerialisation request

& send the securities again to the issuer or R &T Agent.

Precaution to be taken while processing DRF

Ensure account to have the same sequence of names of holders and name

structure as printed on the physical certificate.

Ensure ISIN is activated

Separate DRF for:

Partly & fully paid-up shares

Locked & free holding

Holdings locked in for different reasons

Locked in holdings having different release date

Different ISINs of the company



ISIN to be entered by DP.

All joint holders to sign DRF.

Check DRF form with details on certificate.

DEMAT PROCESS

The demat process requires defacing of securities which will make the security

certificate undeliverable unless the demat formalities are completed. Therefore, the

client should be assisted in ascertaining whether the securities in question are

available for demineralisation. Clients should be helped in filling up the demat request

properly. Demat rejection causes great inconvenience to the client. DP should attend

to this area with care and caution. One of the important reasons for demat rejection is

signature mismatch. Taking the following precaution can reduce this:

If the client is aware that the signature with the company& signature of the

client should be advised to the register the new signature.

If the signature is slightly different, client should be advised to sign as per the

signature that was recorded by the company and as recorded with the DP.

Ensure dispatch of DRFs and certificate to R &T Agents within seven days.

Client may be encouraged to use the Transfer-cum-demat facility if it is

offered by the company. They should be made aware of the procedures of the

scheme.

In case of joint holdings, the clients should be informed about the availability

of Transposition cum Demat facility.



CLOSURE OF ACCOUNT:

Closure on Client‟s Request- A DP can close a depository account on receipt

of an application in the prescribed format. The application should be made by the

account. In case joint-holders. An account can be closed sought to be closed, the

following steps are necessary.

a. Re-materialization of all securities standing to the credit of the same

account making the application for closure; or

b. Transferring the balance to the credit of another account opened by the

same account holder(s) either with the same participant or with a different

participant.

Before closing the account the DP should ensure that all pending transactions

have been settled. The request for closure should be processed only after ensuring that

there is no balance lying in the account.

Consolidations of accounts- Some clients have opened multiple accounts to

dematerialize their shares held in multiple combination and sequence of names.

However, they may not need so many accounts after they have dematerialized their

shares and may want to bring all their share holdings into one or fewer accounts. This

can be achieved by using normal off Market transfer instruction.

Closure by DP – the DP may also initiate closure of a client‟s account if the client

has defaulted in performing should give sufficient notice to the client before initiating

closure of his account. The notice should clearly state the reasons for closure of his

account. The notice should clearly state the reasons for closure of account. The

process of closing account in such a case is the same that of client-initiated closure.



Closure/ Shifting of Clearing Account –A clearing member may transfer its

clearing account from one DP to another DP. For this, simultaneously applications

have to be made for closure of account to the earlier DP and for opening of new

clearing member account to the new DP. On receipt of the application, the new DP

forwards the application to the depository for approval and allotment of a new CM-

BP-ID is allotted, the new DP opens a new Clearing account and intimates the

depository about the new client- ID. On receipt of intimation from the intimates the

clearing member. All pay-out of securities, subsequent to the closure of old clearing

account, take place in the new account. Pg-17-3



TRADING & SETTLEMENT:

This is the an area where the DP must the DP must take immense care while

accepting and processing request listed below should from the account of his client to

another account. The aspects listed below should be kept in mind.

Ensure that the delivery instruction book given to each client has pre-printed

serial number and client-ID.

Inform clients about the pay-in deadline of the stock exchange and the

deadline of the DP.

Each DIS received should be inwarded correctly with the date and time stamp.

Late stamp must be affixed on the instructions received after the expiry of the

deadline set by the DP.

Ensure the correctness of execution date on the DIS.

Ensure signature on DIS matches with the records of the DP.

Ensure that the signatures of all holders are obtain in case of joint accounts.

If the client has not issued “standing instructions”, he should be made aware

that a receipt in instruction will be required to the credits into the account on

purchase of shares.

Client should be made aware of the accounting freezing facility.



SETTLEMENT

The settlement of trades in the stock exchanges is undertaken by the clearing

corporation (CC)/ clearing house (CH) of the corresponding stock exchanges. While

the settlement of dematerialized securities is effected through depository, the funds

settlement is effected through the clearing banks. The clearing members directly with

the CC/ CH settle the physical securities.

Exclusive demat segment follows rolling settlement (T+5) cycle and the

unified (erstwhile - physical) segment follows account period settlement cycle. In case

of rolling settlement cycle, the account period is reduced to one day.

In case of settlement of trades done in exclusive demat segments, the pay-in

and pay out of funds and securities are effected on the same day afternoon and

evening (same day) thus reducing the blockage of funds and limiting exposure

to the clearing corporation.

Settlement of funds is effected through the clearing banks and depository

plays no role in this.

Settlement of securities is effected through NSDL depository system.

Clearing and settlement of the regular market trades is effected through the

clearing members of the clearing houses of respective stock exchanges. All

trading members of stock exchanges are clearing members of clearing houses.

In addition, for settlement of institutional trades, custodians are also allowed

to act as clearing members.

Clearing members of clearing house, dealing in dematerialized securities are

expected to open a clearing account with any DP for the purpose of settling

trades in dematerialized securities. As, in the mixed (unified) segment, there is



a possibility for all clearing members to receive dematerialized securities, they

are expected to open clearing accounts.

If there is any short delivery at the time of pay-in of securities, these short

positions are auctioned in the Demat segment as done in the Unified (erstwhile-

physical) segment.

Selling and Buying Of Shares:

Selling dematerialized shares in stock exchanges is similar to the procedure

for selling physical shares. Instead of delivering physical shares to the broker, you

instruct your DP to debit your account with the number of shares sold by you and

credit your broker's clearing account.

For this, a delivery instruction has to be given to your DP in a standardized

format, which will be available with your DP.

In short, for selling demat shares;

You can sell shares in any of the stock exchanges linked to a depository

through a broker of your choice.

Give an instruction to your DP to debit your account and credit your broker's

clearing member pool account. (this is a depository account used exclusively

for settling transactions by a broker)

On the pay-in day, your broker gives instruction to his DP for delivery of the

shares to clearing corporation of the relevant stock exchange.

The broker receives payment from the clearing corporation



You receive payment from your broker for the sale in the same manner you

would receive payment for a sale in the physical mode.

Buying Demat Shares:

The procedure for buying dematerialized shares in stock exchanges is similar

to the procedure for buying physical shares. When you want to purchase shares in

electronic form, you have to instruct your broker to purchase the dematerialized

shares from the stock exchanges linked to a depository.

Once the order is executed, you have to instruct your DP (vide a simple format

which is available with the DP) to receive securities from your broker's clearing

account.

Alternatively, you may give a standing instruction to receive credits into your

account and do away with giving a separate receipt instruction each time you expect a

credit. You have to ensure that your broker too gives a matching instruction to his DP

to transfer the shares purchased on your behalf into your depository account.

You should also ensure that your broker transfers the shares purchased from

his clearing account to your depository account, before the book closure. This is really

important because shares that remain in the clearing account of the broker on the book

closure/ record date will not be eligible for corporate benefits.

In brief, the transactions relating to purchase of shares are:

You can purchase shares in any of the stock exchanges connected to a

depository through a broker of your choice and make a payment to your

broker;



Your broker receives credit in his clearing account with his DP on the pay-out

day;

Broker gives instructions to his DP to debit his clearing account and credit

your account;

You instruct your DP for receiving credit into your depository account either

through a specific receipt instruction or using the "standing instruction"

facility.

In case you are not using the "standing instruction" facility then, your

depository account is credited only if the instructions given by you and your

broker match.

Other Services

Besides demat and trading Depositories also offer other services, these are:

o Pledging/ hypothecation of dematerialized securities.

o Electronic credit in public offerings of companies.

o Receipt of non-cash corporate benefits such as bonus, rights in electronic

form.

o Stock lending and borrowing.

o Transmission of securities.

Pledging: Dematerialized shares could be pledged; in fact, this is more

advantageous as compared to pledging share certificates.

To pledge your Demat shares

Both you (pledgor) as well as the lender (pledgee) must have depository

accounts.



You must initiate the pledge by submitting the details of the securities to be

pledged in a standard format (available with DPs).

The pledgee should confirm the request through his DP.

Once this is done, your securities are pledged

All commercial documentation between the pledgor and the pledgee are

handled outside the depository system.

After you have repaid your loan, you can request for a closure of pledge by

instructing your DP through a standard format. The pledgee on receiving the

repayment as well as the request for closure of pledge will instruct his DP

accordingly.

Even the locked-in securities can be pledged, however they cannot be invoked

before the lock-in release date.

Even after the securities are pledged, the pledgor continues to remain the

beneficiary holder of those securities and will receive benefits of a corporate action, if

any.



Initial Public Offerings: Credits for public offers can be directly received into

demat account. In the public issue application form of depository eligible companies,

there will be a provision to indicate the manner in which securities should be allotted

to the applicant. All you have to do is to mention your client account number and the

name and identification number of your DP.

Any allotment due to you will be credited into your account.

If the applicant is allotted securities in dematerialized form, but the details

regarding the beneficiary account are incomplete/ wrong, the person will get physical

delivery of allotted securities.

If securities were allotted in the dematerialized form, these would be credited

to applicant‟s account any day between allotment date and listing date, at the

discretion of the company.

The issuer company/ their R&T agent will forward the applicant the allotment

advice giving the number of shares allotted in dematerialized form. Through this you

can come to know that you have been allotted shares.

An amendment to the company law requiring all future public issues above

Rs100mn to compulsorily offer securities in dematerialized form is awaiting

legislative approval. After this all the issues above Rs100mn will require investors to

trade only in demat way.

Partly paid up and fully paid up shares in the depository, will be given

separate ISINs (International Securities Identification Number). These are also traded

separately at the stock exchanges.



The company issues call notices to the beneficial holders of securities in the

electronic form. The details of such beneficial holders will be provided to the issuer/

their R&T agent by NSDL. After the call money realization, issuer/ their R&T agent

will electronically convert the partly paid up shares to fully paid up shares.

Receipt Of Cash/ Non-Cash Benefits: When any corporate event such as

rights or bonus or dividend is announced for a particular security, depository will give

the details of all the clients having electronic holdings in that security as of the record

date to the registrar. The registrar will then calculate the corporate benefits due to all

the shareholders. The disbursement of cash benefits such as dividend/ interest will be

done directly by the registrar. In case of non-cash benefits, depository will directly

credit the securities entitlements in the depository accounts of all those clients who

have opted for electronic allotment based on the information provided by the registrar.

The bonus/ rights issue against holding in dematerialized form can be either in

the physical/ dematerialized form as per the choice of the investor. If no choice is

given, by default, the securities will be issued in the physical form.

Even if an investor has holdings in physical form, he can receive the bonus/

rights issue against this in the dematerialized form.

In case of fractional part, as in the physical segment, it would be paid in cash

and the remaining whole part would be credited to the investors account.

The statement of holding and transaction statement is sent by the investors DP,

it will show the bonus/ rights credit into investor‟s account. This report is sent to the

investor every fifteen days. In addition, an allotment advise will be send by the issuer/

their R&T agent for bonus/ rights entitlement.



Stock Lending and borrowing: Through the depository account securities in

the demat form can be easily lent/ borrowed. Securities can be lent or borrowed in

electronic form through an approved intermediary, who has opened a special

'intermediary' account with a DP.

To Lend Securities: You have to instruct your DP through a standard format

(which is available with your DP) to deposit your securities with the intermediary.

If the intermediary accepts your deposit of securities, the securities will be

moved from your account into the intermediary's account. If you wish to recall the

securities lent by you, you can make a request vide a standard format available with

your DP.

To Borrow Securities: You have to instruct your DP through a standard format

(which is available with your DP) to borrow securities from the intermediary.

If the intermediary accepts your request, the securities will be moved from the

intermediary's account to your account. If you wish to return the securities borrowed

by you, you can make a request vide a standard format available with your DP.

Transmission Of Securities: Transmission of securities due to death, lunacy,

bankruptcy, and insolvency or by any other lawful means other than transfer is also

possible in the depository system. In the case of transmission, the claimant will have

to fill in a transmission request form, (which is available with the DP) supported by

valid documents. The DP, after ensuring that the application is genuine, will transfer

securities to the account of the claimant. For this, the claimant must have a depository

account. The major advantage in transmission of dematerialized holdings is that the



transmission formalities for all securities held with a DP can be completed in one go,

unlike in the case of share certificates, where the claimant will have to interact with

each issuing company or its R&T Agent.

In case where the deceased was one of the joint holders in the Client account,

the surviving client(s) shall be the person(s) recognized by depository as having title

to the securities held in that joint Client account. In case where the deceased was a

sole holder of the Client account, his legal heir(s) or the legal representative(s) will be

the person(s) recognized by depository as having title to the securities held in that sole

Client account.

Security: National Security and Depository Limited claims to have undertaken

sufficient security measures. These measures are:

A DP can be operational only after registration by Sebi, which is based on the

recommendation from NSDL and Sebi‟s own independent evaluation. Sebi has

prescribed criteria for becoming a DP in the regulations.

DPs are allowed to effect any debit and credit to an account only on the basis

of valid instruction from the client.

Every day, there is a system driven mandatory reconciliation between the DP

and NSDL.

There are periodic inspections into the activities of both DP and R&T agent by

NSDL. This also includes records based on which the debit/ credit are

effected.

The data interchange between NSDL and its business partners is protected by

standard protection measures such as encryption. This is a SEBI requirement.



There are no direct communication links between two business partners and

all communications between two business partners are routed through NSDL

All investors have a right to receive their statement of accounts periodically

from the DP.

Every month NSDL forwards statement of accounts to a random sample of

investors as a counter check.

In the depository, the depository holds the investor holdings on trust.

Therefore, if the DP goes bankrupt the creditors of the DP will have no access

to the holdings in the name of the clients of the DP. These investors can then

either dematerialize their holdings or transfer them to a different account held

with another DP.

Investor grievance: All grievances of the investors are to be resolved by the

concerned DP. If they fail to do so the investor has the right to approach

NSDL.

Insurance Cover: NSDL has taken a comprehensive insurance policy to protect

the interest of the investors in cases of failure of the DP to resolve a genuine

loss. The details of the policy is as under:

Upper limit per claim: Rs200mn.

Number of claims allowed: unlimited

Minimum value of the claim: Rs150, 000

To cover claims valued less than Rs150, 000 NSDL has an investor protection

fund in place.

Besides all these safety measures efforts have been done to make this electronic

system foolproof.



DEMAT SHARES: ARE THEY 100% SAFE

When you buy physical shares from the stock market, you could never be

certain of the validity of the title of shares. There were many reasons- the sellers'

signature did not match, or the certificates were fake, forged or stolen, and so on.

Demat shares are supposed to obviate these problems. Buying shares in the

demat form always guarantees you a good title as soon as the settlement is over. The

biggest attraction of trading in demat shares is that the shares you buy come with a

clean title and immediately after the settlement on the relevant stock exchange.

Rule 100 of market regulator SEBI determines whether the shares delivered in

a settlement, are good or not. Under rule 100, the shares that have been transferred the

company can still withdraw any number of times, if a transfer is found to be invalid

for any reason.

Suppose a sells physical shares to B and B gets them dematerialized. Later B

sells the shares in the stock exchange and C buys them. Meanwhile A discovers that

his share certificates were stolen and fraudulently sold by someone else. He gets a

court order restraining the company from further transferring the shares and attaching

them (currently in possession of C). This is known as 'stop transfer'. So C who has

bought dematerialized shares is now struck with the shares. He cannot sell these

shares since they would be frozen in his account

In demat shares, pre-demat problems about the validity of a share do not effect

the interest of the buyers after dematerialization. Shares go through a verification

process at the registrars' before they are dematerialized.



Therefore the responsibility lies with the registrar. The registrar must find a

remedy if the original transfer of shares, before their dematerialization comers under

doubt. But there is a catch. The company and its registrars are not responsible if the

reasons for original transfer being invalid were not available at the time of

dematerialization. Matters have to be dealt with on a case-to-case basis. Which means

that even demat buyer may find that his shares have been frozen in his demat account.

This kind of case has to be contested in court by the parties involved.

This issue is not directly addressed in The Depositories Act, 1996. Sebi‟s

regulations on depositories and depository participants also do not mention the issue.

Matters get more complex if an investor has traded further in shares of the

same company in his demat account. Demat shares are fungible and don‟t have

distinctive numbers. It is not easy to track the sale or trade of shares after they are

dematerialized.

In a rare event of your DP going bankrupt or closing the operations, the

interests of the investors will be fully protected. In such a situation, the investors will

be given an option of either transferring the securities to a new DP or they may

rematerialise the securities



ANALYSIS OF CUSTOMER SATISFACTION

Sample size selected: 100

Total Number of customer available for survey: 100

0

50

100

1

sample for survey

Series1

The sample size selected for the survey was 100.(Hundred) customers of

KARVY CONSLUTANT STOCK BROKING were available for survey. So opinion

was taken to know the customer satisfactions towards demat account.



1.Respondent came to know the about “KARVY FINANCIAL CONSULTANT “

Total no. Of sample taken: 100

1 2 3 4 5

Friends News Papers/

Business Magazines Online Agent/Financial Others

47 18 10 14 11

47%

18%

10%

14%

11%Friends

NewsPapers/BusinessMagazines

Online

Agent/Financial

Others

Source: Survey Data

The above table and chart shows the respondents know

KARVY FINANCIAL CONSULTANT :-

47.00% of respondent know KARVY FINANCIAL CONSULTANT through

their Friends.

18% of of respondent know KARVY FINANCIAL CONSULTANT through

News Papers & Magazine.

14% of respondent know KARVY FINANCIAL CONSULTANT through

Agents & Financial Institutions.

11% of respondent know KARVY FINANCIAL CONSULTANT through

Others.



2.They are interested to visit “KARVY FINACIAL CONSULTANT “

Yes

94%

No

6%

Yes

No

Source: Survey Data

The above table and chart shows that 94% of respondents are interested to

visit KARVY FINANCIAL CONSULTANT & only 6% of Respondent are not

interested to visit the same .

Yes No

94 6



3. They Respondents are interested to visit “KARVY FINACIAL CONSULTANT “

because of visual pleasure ,hospitality & Excellent Guideline etc

47 45

80 00

10

20

30

40

50

Agree

Just a

gree

No

Opinion

Just D

isag

ree

Disag

ree

Series1

Source: Survey Data

The above table and chart shows that 47% of Respondents are interested to

visit “KARVY FINANCIAL CONSULTANT “ , 45% of Respondent just agree &

8% of Respondent are not interest to give there opinion .

Agree Just agree No Opinion Just Disagree Disagree

47 45 8 0 0



4. They Respondents are definitely use service “KARVY FINANCIAL CONSULTANT

“Because attitude of employee.


69 24 7 0 0

Source: Survey Data

The above table and chart shows that 69% of Respondents are interested to visit

“KARVY FINANCIAL CONSULTANT “Because of there attitude, and, 24% of

Respondent just agree only 7% of Respondent are constant.

69

24

70 00

10

20

30

40

50

60

70

80

Agree Just

agree

No

Opinion

Just

Disagree

Disagree

Agree

Just agree

No Opinion

Just Disagree

Disagree



5. They Respondents are definitely using service of “KARVY FINACIAL CONSULTANT

because what they benefit gets from them.

5041

81 00

10

20

30

40

50

60

Agree Just agree No Opinion Just

Disagree

Disagree

Agree

Just agree

No Opinion

Just Disagree

Disagree

Source: Survey Data

The above table and chart shows that 50% of Respondents are interested to

visit “KARVY FINANCIAL CONSULTANT because they get that much of benefits

from them , and, 41% of Respondent just agree only 8% of Respondent constant..1%

of Respondent just disagrees.


50 41 8 1 0



6 They Respondents are interested “KARVY FINANCIAL CONSULTANT “

because they introduce new scheme and we get benefit .

Yes

86%

No

14%

Yes

No

Source: Survey Data

The above table and chart shows that 86% of respondents are interested to use

service of “KARVY FINANCIAL CONSULTANT” because they introduce new

scheme and we get benefit & only 14% of Respondent are not interested to visit the

same.

Yes No

86 14



7 They Respondents use “KARVY FINANCIAL CONSULTANT “because

Karvy People know customer value and money value.


54 39 6 1 0

54

39

6 1 00

10

20

30

40

50

60

Agree Just agree No Opinion Just

Disagree

Disagree


Source: Survey Data

The above table and chart shows that 54% of respondents are satisfied with the

service of “KARVY FINANCIAL CONSULTANT” because the Karvy People

know customer value and money value. 39% Respondents just agree .6% of parole

say no opinion and only 1% of Respondent say just disagree.



8. They Respondents specify “KARVY FINANCIAL CONSULTANT “better then

other Dp.


41 37 20 1 1

41

37

20

1 1

0

5

10

15

20

25

30

35

40

45

Agree Just

agree

No

Opinion

Just

Disagree

Disagree

Agree

Just agree

No Opinion

Just Disagree

Disagree

Source: Survey Data

The above chart shows that 41% of respondents are interested in “KARVY

FINANCIAL CONSULTANT” because of their best service which is better then

other DP services. 41% of Respondents agree.31% of Respondents just agreed. 20 %

of Respondent has not given their opinion. Only 1% of Respondent disagrees.

A Study of Customer Satisfaction towards Depository Participants

Babasabpatilfreepptmba.com Page 1

9. Demat

Extremely satisfied

Satisfied Neither satisfied/ nor unsatisfied

Unsatisfied Extremely unsatisfied

38 46 16 0 0

Extremely

satisfied

Satisfied Neither

satisfied/nor

unsatisfied

unsatisfied Extremely

unsatisfied

S1

38 46

16

0 0

Source: Survey Data

The above table and chart shows demat services offered by KARVY

FINANCIAL CONSULTANTS are satisfied. 38% of the Respondents are extremely

satisfied, 46% just Satisfied, 16%of of Respondents neither satisfied / Unsatisfied..



b. Settlement (Selling/ Buying)

Extremely Satisfied Satisfied

Neither satisfied/nor Unsatisfied Unsatisfied

Extremely unsatisfied

25 49 26 0 0

25

49

26

0 00

10

20

30

40

50

60

Extremely satisfied Satisfied Neither

satisfied/nor

unsatisfied


unsatisfied

Extremely satisfied

Satisfied

Neither satisfied/norunsatisfied

unsatisfied


Source: Survey Data

The above table and chart shows that 25% of the respondents are extremely

satisfied by the service of Karvy, 49% of respondents are satisfied and 26% of the

respondents are having neutral opinion about the service provided by the Institution.



c. Freezing/Defreezing




6 49 45 0 0

6

49

45

0

0

0 20 40 60

1


unsatisfied


Satisfied

Extremely satisfied

Source: Survey Data

The above table and chart shows the services of freezing/ defreezing 49% of the

respondent are aware and satisfied with these services. And 45% of respondent are

having neutral opinion about freezing/ defreezing, 6% of respondent are dissatisfied with

this service because they are don‟t have understood the core concept.



d. Loan against Shares

Extremely satisfied

Satisfied Neither satisfied/nor unsatisfied

Unsatisfied Extremely unsatisfied

22 33 45 0 0

22%

33%

45%

0%0% Extremely satisfied

Satisfied


unsatisfied


Source: Survey Data

The above table and chart shows most of the respondent are having neutral

opinion i.e., 45% and 33% have satisfied this service. 22% of respondent are extremely

satisfied.



e. Share Trading

49 47

4 0 00

10

20

30

40

50

60

Extr

em

ely

sa

tisfie

d

Sa

tisfie

d

Ne

ithe

r

sa

tisfie

d/n

or

unsa

tisfie

d

un

sa

tisfie

d

Extr

em

ely

unsa

tisfie

d

Source: Survey Data

The above table and chart shows the service of share trading, 49% of the

respondent have Extremely Satisfied with this service, and 47% of respondent are

satisfied; In all we can say that 96% respondent have satisfied with the services of Share

trading.




49 47 4 0 0



F. Periodic statements


Neither satisfied/ unsatisfied Unsatisfied


48 44 8 0 0

48 44

80 00

10

20

30

40

50

60

Extremely

satisfied

Satisfied Neither

satisfied/nor

unsatisfied


unsatisfied

Extremely satisfied Satisfied

Neither satisfied/nor unsatisfied unsatisfied


Source: Survey Data

The above table and chart shows the services given by Karvy about Periodic

statements 48% of the respondent are extremely satisfied & 44% of the respondent is

satisfied .In all 92%(appr) of respondent have satisfied with this service.



g. Telephone Quires


Neither satisfied/nor unsatisfied Unsatisfied


40 48 12 0 0

4048

120 00

10

20

30

40

50

60

Extremely

satisfied

Satisfied Neither

satisfied/nor

unsatisfied


unsatisfied




Source: Survey Data

The above table and chart shows the 48% of the respondent are satisfied with

the Telephonic service; 40% of the respondent are mostly satisfied & in all 88% of the

Respondent satisfied; 12% having neutral opinion.



h. Co-operation by Staff

Extremely satisfied

Satisfied Neither satisfied/nor unsatisfied

unsatisfied Extremely unsatisfied

60 35 5 0 0

60

35

5

0 00

10

20

30

40

50

60

70

Extremely

satisfied

Satisfied Neither

satisfied/nor

unsatisfied


unsatisfied




Source: Survey Data

The above table and chart shows overall 60% of the respondent are extremely

satisfied with the co-operation by staff; 35% of the respondents are satisfied & 5% of the

respondents are having neutral opinion.



I. Bills acceptance.

Extremely satisfied

Satisfied Neither

satisfied/nor unsatisfied

unsatisfied Extremely unsatisfied

50 32 16 1 1

50

32

16

1 10

10

20

30

40

50

60

Extremely

satisfied

Satisfied Neither

satisfied/nor

unsatisfied


unsatisfied




Source: Survey Data

The above table and chart shows overall 50% of the respondent are extremely

satisfied; 32% of the respondents are satisfied &16% of the respondents are having

neutral opinion.



10. Dissatisfied with services/ scheme

A Frequently reminders are given to karvy consultant ltd., for update

the information 4 4%

B Irregular receipt of Holding/Transaction statement 1 1%

C Improper attention given to the enquires

5 5%

D Improper format of Holding/Transaction statement 1 1%

E Billing problems

1 1%

F Inadequate information 2 2%

a b c d e f

4 1 5 1 1 2

4

1

5

1 1

2

0

1

2

3

4

5

6

1

a

b

c

d

e

f

Source: Survey Data

The above table and chart shows that 5% of the respondents are unsatisfied with

Improper attention given to the enquires . & 4% of the respondent are unsatisfied with

frequently reminders are given to karvy consultant ltd., for update the information given

by DP .So proper communication with the Respondent & update information is required.



11. Tariff Structure

1325

62

0 00

10

20

30

40

50

60

70

Veryhigh High resonable low verylow

Veryhigh

High

resonable

low

verylow

Source: Survey Data

The above table and chart shows that 62% of the respondents think the tariff

structure of the KARVY CONSULTANT is very reasonable.25% of the respondent

thinks the tariff structure is high. 13% of the respondent feels the tariff structure is very

high.

Very high High Reasonable Low Very low

13 25 62 0 0



12. Rate of Satisfaction for DP services

0% 20% 40% 60% 80% 100%

0 0 11 31 53 5

1325

62

0 00

10

20

30

40

50

60

70

Veryhigh High resonable low verylow

Veryhigh

High

resonable

low

verylow

Source: Survey Data

The above table and chart shows that 53% of the respondent have

satisfied 80% of service given by DP; 31% of the respondent have satisfied 60% of

service and 11% of the respondent have satisfied 40% of the service. Only 5% of

respondent have satisfied 100 of the service.



13. Preference of own DP over other DP

Quality service Rate Charged Nothing in particular Safety Reach

35 14 10 40 1

35

14

40

110

0

5

10

15

20

25

30

35

40

45

Qulity service Rate

Charged

Nothing in

paricular

Safety Reach

Qulity service

Rate Charged

Nothing in paricular

Safety

Reach

Source: Survey Data

The above table and chart shows that 40% of the respondents preferred this DP

because of Safety & 35% of the respondents preferred this DP because of the quality

service. In all 75% prefer KARVY CONSULTANT because of safety& quality.



Recommendation

Customer service should be improved and more co-operation also provide.

Time taken for transfer of script from trading account into demat account should

be reduced.

Statement copy should made more clear and figure should be mention in

respective column.

More space provide in trading place.

The commission charged should be reduced.

The office should be situated near bus stand or subhas road.



CONCLUSION

Since it is service based industry, the customer plays vital role, so in order to

satisfy the customer appoint more no of well qualified agents who can communicate

respondents to improve the services, hence give more advertisement in News paper, local

TV channel, to over come the over crowding and non availability of telephone links

proper measure should be taken.



QUESTIONNAIRE

Dear Sir/ Madam

NAME : ____________________________

ADDRESS : ____________________________

____________________________

OCCUPATION: ____________________________ Phone No: __________

1. I came to know about KARVY FININCIAL CONSULTANTS from

1 2 3 4 5

Friends News Papers

/Business

Magazine

Online Agent/Financial

Agency

Others

2. I am interested in visiting KARVY FININCIAL CONSULTANTS because

they provide quick and timely service.

1) Yes 2) No

3. I have been using service of KARVY FININCIAL CONSULTANTS

because of the low cost, visual pleasure, Hospitality, Communication, and new

concept of financial consultancy

1 2 3 4 5

Agree Just Agree No opinion Just disagree Disagree

4. In future I will be definitely using the service of KARVY FININCIAL

CONSULTANTS because of the attitude of the employees towards customers.

1 2 3 4 5


5. I will definitely use service of KARVY FININCIAL CONSULTANTS because

of the benefit I get from KARVY FININCIAL CONSULTANTS



1 2 3 4 5


6. I am interested in KARVY FININCIAL CONSULTANTS because of the new

scheme introduced frequently and benefit from such scheme

1) Yes 2) No

7. I use KARVY FININCIAL CONSULTANTS because they know customer

value as well as money value of customers

1 2 3 4 5


8. KARVY FININCIAL CONSULTANTS service of dp are better then other dp

services.

1 2 3 4 5




9. Express your satisfaction level about the following scheme/service please tick.

Schemes/services

Extremely

Satisfied

Satisfied Neither

satisfied/nor

unsatisfied

unsatisfied

Extremely

Unsatisfied

a. Demat

b. Settlement

(Selling/purchasing)

c. Freezing/

defreezing Of

an account

d. Loan against

shares

e. Share trading

f Periodic statements

g. Telephone queries

h. Co-operation by

staff

i. Bills Acceptance

10. If you have faced any when dealing through your DP or you are unsatisfied with

the above mentioned services/schemes.

Frequently reminders are given to KARVY FININCIAL CONSULTANTS., for

update the information

Irregular receipt of Holding/Transaction statement

Improper attention given to the enquires

Improper format of Holding/Transaction statement

Billing problems

Inadequate information

Other specify___________________

11. Please tick the following:

Tariff

Structure

1 2 3 4 5

Very High High Reasonable Low Very Low



12. How do you rate the services of your DP

0% 20% 40% 60% 80% 100%

13. How do you justify your preference for your KARVY FININCIAL

CONSULTANTS DP over other DP‟s?

1 2 3 4 5

Quality

Service

Rates

Charged

Nothing in

particular

Safety Reach

14.

A) Your age (Yrs)

<25 26-35 36-45 46-60 > 60

B) Income (Pa)

<60000 60000-1.2 L 1. 2 L– 2.4 L

2.4 L– 3.6L 3.6 L – 6.0.L 6.0 L –12.0 L

C) Education

Up to Xth

Graduate Post Graduate. PhD. Others.

D) Yearly of investment.

1L-5 L 5L-10L >10L

15. Suggestion ______________________________________________

______________________________________________

Thank you for your co-operation



CODE SHEET OF CUSTOMER RESPONSE

Q. 9. Extremely Satisfied: 1; Satisfied: 2;Neither Satisfied/Nor Dissatisfied: 3;

Unssatisfied:4; Extremely Dissatisfied: 5

Q11. Very High: 1;High: 2;Reasonable: 3;Low: 4;Very Low:

Q12. 0%: 1; 20%: 2; 40%: 3; 60%: 4;80%: 5;100%:

Q813. Quality Service: 1;Rates charged: 2;Nothing in particular: 3; Safety: 4;Reach: 5

DATA CODE - SHEET Sl No

1 2 3 4 5 6 7 8 9a 9b 9c 9d 9e 9f 9g 9h 9i 10a 10b 10c 10d 10e 10f 11 12 13a 13b 13c 13d 13e

1 1 1 1 1 1 1 1 2 2 2 3 3 1 2 1 1 2 2 3 5 3

2 1 1 1 1 1 2 2 2 1 2 2 2 2 2 2 1 2 3 4 1

3 1 1 1 1 1 1 2 1 2 2 2 2 2 2 3 2 3 3 2 4 4

4 1 1 2 2 2 2 2 2 2 2 3 3 2 2 2 2 2 2 3 3

5 1 1 1 1 1 1 1 1 1 2 2 3 1 1 1 2 2 3 5 1

6 1 1 2 1 1 1 2 1 1 1 2 1 1 2 1 1 2 2 5 4

7 1 1 1 1 1 1 1 1 2 2 2 2 1 1 1 1 1 3 5 1

8 4 1 1 1 1 1 1 1 2 1 3 3 1 1 1 1 1 3 6

4

9 1 1 1 2 2 1 2 3 2 2 3 3 2 1 1 1 1 3 5 1

10 1 1 2 3 1 2 3 2 2 3 2 3 2 3 2 2 2 3 4 2 4 3

11 1 1 1 1 1 1 1 1 1 1 2 2 1 1 1 1 1 3 5

2

12 2 1 2 1 2 1 3 2 2 2 2 2 2 2 2 2 2 3 5 1

13 2 1 2 2 2 1 2 2 2 1 1 3 1 1 1 3 1 1 3 4 3

14 1 1 1 1 1 1 1 1 1 1 2 2 1 1 1 1 1 1 5 1

15 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 1 2 3 5 4

16 1 1 1 1 1 1 1 1 2 2 2 2 1 1 1 1 2 3 4 1

17 2 1 1 1 1 1 1 3 1 2 3 3 2 2 1 1 1 3 5 1

18 1 1 2 1 2 1 1 2 2 1 2 1 1 1 1 1 1 3 5 4

19 1 1 1 1 1 1 2 2 1 1 2 2 1 1 1 2 1 3 5 1

20 1 1 1 1 1 1 1 1 1 1 2 2 1 1 1 1 1 3 5 1

21 1 1 2 2 3 1 2 1 1 2 2 2 1 1 2 1 1 2 5 4

22 4 1 2 1 1 1 2 3 1 2 3 3 1 2 1 1 3 2 5

4

23 1 1 1 1 1 1 2 1 1 1 2 3 1 1 1 1 1 3 5 4

24 1 1 1 1 1 1 2 3 1 1 3 3 2 1 1 2 1 3 5 4

25 1 1 1 1 1 1 1 1 3 2 2 3 1 1 2 1 2 3 5 1



26 4 2 3 2 3 2 2 2 3 2 3 3 2 2 2 2 2 2 4 3

27 1 1 1 1 1 1 2 1 1 1 2 3 2 1 2 1 1 3 4 1

28 1 1 2 2 3 1 1 1 2 2 2 3 2 2 1 1 1 3 5 1

29 1 1 2 1 3 2 1 2 1 2 3 3 1 1 1 1 1 1 5 4

30 2 1 1 1 1 1 1 1 2 1 3 3 1 2 1 1 1 3 5 1

31 2 1 1 1 1 1 1 1 2 2 2 3 2 2 2 2 2 3 5 4

32 1 1 2 1 1 1 1 1 2 2 2 3 2 2 2 2 2 1 3 3 1

33 1 1 1 1 1 1 2 2 2 2 2 3 2 2 1 1 2 3 4 1

34 2 1 2 2 1 2 2 2 2 2 2 3 2 2 2 2 2 3 5 1

35 1 1 1 1 1 1 1 1 2 2 2 3 1 1 2 2 2 1 3 5 4

36 5 1 2 1 2 2 2 5 2 2 2 3 2 3 2 2 5 1 3 6 2 4 3

37 1 1 1 2 2 1 2 2 2 3 3 2 2 1 2 1 1 3 3 1

38 1 1 1 1 1 1 1 2 2 1 2 1 1 1 1 1 1 5 2 5 4

39 1 2 3 3 4 2 4 4 2 2 3 3 2 2 3 2 4 3 6 3 3

3

40 1 1 1 1 1 2 2 2 2 2 3 3 2 2 2 2 2 2 4 4

41 1 1 2 1 2 2 1 3 2 2 3 3 2 2 1 1 2 3 5 1

42 2 1 1 1 2 1 1 1 1 2 2 3 1 1 2 1 1 2 5 4

43 4 1 2 1 1 1 1 2 1 2 3 3 1 1 1 1 1 3 5 1

44 1 1 3 2 1 2 2 3 2 2 3 3 2 2 1 1 2 3 1 3 2

45 1 1 1 1 2 1 1 2 2 1 2 3 1 1 2 1 2 3 4 2

46 2 1 3 3 2 1 1 1 1 1 2 2 1 1 1 1 1 3 5 1

47 1 2 2 1 2 1 1 1 3 2 1 2 1 2 3 1 1 3 4 1

48 2 1 2 2 1 1 3 2 2 3 3 1 2 2 3 2 3 2 4 2

49 1 1 1 1 2 1 1 1 3 2 2 3 1 2 3 1 1 3 3 3

50 5 1 2 1 1 1 1 2 1 3 1 2 2 3 2 1 1 2 5 1

51 1 1 2 2 2 1 1 1 3 1 3 3 1 3 2 2 1 3 4 2

52 2 1 1 1 1 1 3 2 2 3 2 1 3 2 3 1 1 3 5 3

53 1 1 2 1 2 1 1 1 1 2 1 2 1 3 2 1 1 2 4 2

54 1 2 2 2 1 1 3 3 3 1 3 2 2 1 3 1 1 3 3 1

55 3 1 1 1 2 1 1 1 2 3 2 3 1 2 2 1 1 2 5

3

56 1 1 2 2 1 1 1 2 3 2 2 2 2 1 2 1 1 3 4 2

57 2 1 1 1 2 2 1 1 1 1 3 1 1 2 3 2 1 3 3 2

58 4 1 2 1 1 1 3 2 2 3 1 3 2 1 2 1 1 1 4 1

59 1 2 2 2 2 1 1 1 3 2 3 2 1 2 3 1 1 3 5 2

60 3 1 1 1 1 1 2 2 2 3 2 1 2 1 2 2 1 3 3 4

61 1 1 2 1 2 1 1 1 3 1 3 2 1 2 3 1 1 3 4 2

62 3 1 2 1 1 1 2 3 1 3 2 3 2 1 2 2 1 1 5 1

63 1 1 1 1 2 1 1 1 3 2 2 2 1 2 3 1 1 3 4 4



64 4 1 1 1 1 2 1 2 2 3 1 1 2 1 2 2 1 3 3 2

65 1 1 2 1 2 1 1 1 1 1 3 2 3 1 3 1 1 3 4 1

66 1 1 2 2 3 1 2 3 3 3 2 1 2 2 2 2 1 3 3 2

67 1 2 1 1 2 1 1 1 2 2 3 2 3 1 1 1 1 3 4 4

68 3 1 2 1 3 1 2 2 3 3 2 3 2 1 2 1 1 3 5 1

69 3 1 1 1 2 1 1 2 3 3 3 1 1 2 1 2 1 2 5 1

70 4 1 2 1 2 1 2 3 2 2 3 1 2 1 1 2 1 2 5 4

71 5 1 2 4 1 1 1 2 1 3 3 3 1 2 1 2 1 2 4 1

72 5 1 1 1 2 1 2 3 3 1 2 1 2 1 1 1 1 1 5 4

73 5 1 2 2 3 1 1 1 1 3 3 3 1 2 1 2 1 2 4 4

74 5 1 2 2 1 1 2 3 2 2 3 1 2 1 1 2 1 2 5 1

75 5 1 3 1 2 1 1 2 3 3 3 2 1 3 2 1 1 1 4 4

76 4 1 2 2 1 1 2 1 1 1 3 1 2 1 2 2 1 2 5 1

77 2 1 2 1 2 1 1 3 1 3 2 3 3 2 1 1 1 1 4 4

78 5 1 1 3 1 1 2 2 3 2 3 2 1 2 2 3 2 2 5 2

79 3 1 2 1 2 1 1 1 2 3 2 1 2 1 2 1 2 1 4 1

80 1 1 1 1 3 1 2 2 1 2 3 3 1 2 2 2 2 1 5 4

81 4 1 1 1 2 1 1 3 1 3 2 2 2 1 2 1 2 3 4 2

82 5 1 2 2 1 1 2 1 1 2 3 1 1 2 1 2 2 1 5 4

83 3 1 3 1 2 1 1 2 1 2 2 2 2 1 2 1 2 3 4 4

84 2 1 2 1 2 1 2 3 2 3 3 2 1 3 2 2 2 3 5 1

85 4 1 1 3 1 1 1 1 2 1 2 1 2 1 1 1 2 1 4 4

86 3 1 3 1 2 1 2 2 1 3 2 3 1 2 2 2 2 3 5 4

87 1 1 2 2 2 2 1 3 1 2 3 2 2 1 2 1 2 3 4 4

88 5 1 1 1 2 1 2 3 2 2 3 1 1 3 2 3 3 1 5 5

89 2 1 3 1 1 1 1 1 2 3 2 2 2 1 1 1 3 3 4 4

90 4 1 2 1 2 1 2 2 1 2 3 2 1 2 2 2 3 3 6 1

91 3 1 1 1 2 1 1 3 2 1 3 3 2 1 1 1 3 2 5 4

92 2 1 2 1 1 1 2 2 2 3 2 2 1 2 2 3 3 3 6 4

93 5 1 1 1 2 1 1 1 2 2 3 1 2 1 1 2 3 3 5 4

94 4 1 2 1 2 1 2 3 1 2 3 2 1 2 2 3 3 3 5 4

95 2 1 1 2 2 1 1 2 2 3 2 2 2 1 1 2 3 2 5 4

96 4 1 2 1 1 1 2 1 1 2 3 1 1 2 2 1 3 3 6 4

97 3 1 1 2 2 1 1 3 2 3 2 3 2 1 2 1 3 3 5 4

98 2 1 2 2 1 1 2 2 1 2 3 1 1 2 2 1 3 2 5 4

99 4 1 1 2 2 1 1 2 2 3 3 3 2 1 2 1 3 3 5 4

100 2 1 2 3 1 1 2 1 1 1 3 1 1 2 2 1 3 3 5 4



GLOSSARY

Account Freezing: The Depository Participant may freeze the account of a client

maintained with him on written instructions received by the Participant in that regard

from the client concerned in the form specified under the Business Rules.

Account Opening: Any person willing to avail the services offered by a Depository shall

open an account with a Depository Participant.

Beneficiary: A person who benefits from a trust set up on his / her behalf & anyone who

benefits from the proceeds of a will

A person who benefits from a contractual or fiduciary relationship

Beneficiary ID No: Each beneficiary is allotted an ID No. generated by DP by which a

beneficiary is identified. This is similar to your Bank A/c No. Or the Folio No.

BSE: Bombay Stock exchange is one of the oldest stock exchanges in Asia with over

6,000 stocks listed.

Beneficiary Account: An investor or a broker who wants to hold shares in

dematerialised (demat) form and undertake scrip less trading must have a depository

account called beneficiary account with Depository Participant of his choice.

CDSL: Central Depository Securities Ltd is an organization promoted by the stock

exchange Mumbai, (BSE) in association with Bank of India, Bank of Baroda, State Bank

of India and HDFC Bank to provide electronic depository facilities for securities traded



in the equity and the debt market. CDSL is the second depository in India. Karvy is one

of the Depository Participants of CDSL.

Client Id: Whenever any client opens an account with a Depository Participant he /she is

provided with an account number which is known as the beneficiary account number or

the Client Id. The combination of the Client Id and the Depository Participant Id is

unique.

Deface: The client (registered owner) shall submit a request to the DP in the DRF for

dematerialisation along with the certificates of securities to be dematerialised. Before

submission, the client has to deface or cancel the certificates by writing

"SURRENDERED FOR DEMATERIALISATION”.

Defreezing of an account: The client can request his depository participant to release the

suspension order and defreeze the account for regular operations. The Depository

participant shall defreeze the account only after receipt of the application for defreezing

signed by all the account holders

Delivery Instructions by client: In order to transfer securities from his account to

another a beneficial account owner must give an instruction to his / her Depository

Participant. A beneficial account owner must give instruction to his / her DP to transfer

DRN: When the securities are found in order with the details of the request as mentioned

in the form, the depository participant enters the details in the DPM (Depository

participant Module, provided by NSDL to the DP) a Dematerialization Request Number

(DRN) is generated by the system. The DRN so generated is entered in the space



provided for the purpose in the Dematerialization Request Form. The request is then

released to DM (Depository Module – Depository‟s software system). The DM forwards

the requests to the Issuer / R & T agent electronically. Once the DRN is confirmed or

accepted by the Issuer / R & T agent the DM electronically authorize the creation of

appropriate credit balances in the client‟s account. The DPM shall credit the client‟s

account automatically.

Electronic Public Offering (EPO): An initial public offering, or new issue of shares, in

which the process of applying for shares is handled electronically (via websites).

Freezing of an account: Any client can give instructions, in the prescribed form, to his

Depository Participant to freeze his account either for debit or for all operations. Only

after receipt of the application for freezing the account signed by all the account holders

the Depository Participant shall freeze the account till further notice received from the

client in this regard.

Fungible: Dematerialized shares do not have any distinctive numbers or certificate

numbers. These shares are fungible – which means that 100 shares of a security are the

same as any other 100 shares of that security.

Hypothecation: The pledging of securities as collateral. A client having a beneficiary

account with a DP can hypothecate securities in electronic form against loan / credit

facilities extended by a pledge, who has a beneficiary account with a DP. The creation of

pledge / hypothecation will be initiated by the pledgor through its DP and the pledgee

will instruct its DP to confirm the creation of the pledge. The pledge / hypothecation so



created can either be closed on repayment of loan or invoked on default. After the

pledgor repays the loan to the pledgee the pledgor will initiate the closure of pledge /

hypothecation. In case of default by the pledgor in repaying the loan to the pledgee, the

pledgee may initiate invocation of pledge / hypothecation, after taking such steps as may

be necessary as per the terms of the underlying agreement with the pledgor and the Bye

Laws and Business Rules of NSDL and SEBI Regulations. In case of hypothecation, the

pledgor will instruct its DP to confirm the invocation of the hypothecation.

Initial Public Offering (IPO) : The first offering of a company‟s shares to the public.

The shares offered may be existing ones held privately, or the company may issue new

shares to the public.

Inter Depository Instructions: Inter-Depository Transfer means transfer of securities

which are admitted for dematerialisation on both the depositories from an account held in

one depository to an account held in the other depository

ISIN: International Securities Identification Number (ISIN) is a code that uniquely

identifies a specific securities issue.

Market Trade: Trades which are settled through the Clearing Corporation / Clearing

House of an exchange are classified as " Market Trades ".

NSDL: The National Securities Depository Limited is an organisation promoted by the

Industrial Development Bank of India, the Unit Trust of India and the National Stock

Exchange of India Limited to provide electronic depository facilities for securities traded



in the equity and the debt market. NSDL commenced its operations in the year 1996 and

is the first depository in India.

NSE: National Stock Exchange is one of the leading stock exchanges in India. The NSE

has been set up by leading institutions to provide a modern, fully automated screen –

based trading system with national reach.

Off Market Trade: Trades which are not settled through the Clearing Corporation /

Clearing House of an exchange are classified as " Off Market Trades ". Negotiated trades

which are not cleared and settled through the Clearing Corporation / Clearing House are

off-market trades.

Pledge: To deposit personal property as security for a personal loan of money. If the loan

is not repaid when due, the personal property pledged shall be forfeit to the lender. A

client (pledgor) having a beneficiary account with a Depository Participant can pledge

securities in electronic form against loan / credit facilities extended by a pledgee, who

too has a beneficiary account with a Depository Participant.

Rematerialisation: It is the process by which a client can get his electronic holdings

converted into physical certificates. The client has to submit the rematerialisation request

to the DP with whom he has an account. The DP enters the request in its system, which

blocks the client‟s holdings to that extent automatically. The Issuer / R& T agent then

prints the certificates, dispatches the same to the client and simultaneously electronically

confirms the acceptance of the request to NSDL. Thereafter, the client‟s blocked

balances are debited.



Registrar and Transfer Agent (RTA) : A transfer agent and registrar for a publicly held

company keeps record of every outstanding share certificate and the name of the person

to whom it is registered. When the share changes hands, the transfer agent transfers the

ownership of the stock from the seller‟s name to the buyer‟s name. The registrar

reconciles all transfer records and makes sure that the number of shares debited is equal

to the number of shares credited.

Settlement: It is the process by which investors pay for shares they have bought and

receive payment for shares they have sold. It is also the process by which the investor

delivers the shares he has sold to the clearing house and receives the shares which he has

purchased from the clearing house of a recognized stock exchange.

Settlement Day: The day on which purchased securities are due for delivery to the buyer

and payment is due to be made to the seller.

Statement of Holding: A statement of holding details out the current balance in a

depository account. At least once every fortnight the Depository participant sends a

statement of Holdings to its clients.

Statement of transaction: A statement of transaction details out the various transactions

done through that depository account. At least once in every fortnight the Depository

Participant sends a statement of transaction to its clients. Karvy‟s Online Demat services

enable its clients to view their statement of transactions on the net.

Transferability of Shares: Shares in a company are freely transferable, subject to certain

conditions, such that no shareholder is permanently or necessarily wedded to a company.



When a member transfers his shares to another person, the transferee steps into the shoes

of the transferor and acquires all rights of the transferor in respect of those shares. For

dematerialised shares the depository participant debits and credits the account of the

client with an authorisation from such client.

Transmission: Transmission of shares denotes a process by which ownership of share is

transferred on legal heir or to some other person by operation of law. In case of

transmission no transfer deed and no stamp duty is required. Transmission of shares

generally takes place in case of death, insolvency or mental illness or purchase in case of

shares by court or in case of amalgamation, where the amalgamating company holds

shares in various companies.



BIBLIOGRAPHY

Web sites

www.karvy.com

www.indiainfoline.com

www.sharekhan.com

[email protected]

Books

Company books & Brochures

NSDL Books