depository model 3 india cdsl
DESCRIPTION
Depository Model 3 India CDSLTRANSCRIPT
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Welcome!!
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Sr. No. Name of shareholders % terms to total equity
1 Bombay Stock Exchange Limited
36.60
2 State Bank Of India 9.57
3 Bank Of Baroda 9.57
4 Bank Of India 9.57
5 HDFC Bank Limited 14.36
6 Standard Chartered Bank 7.18
7 Other Leading Banks 13.15
TOTAL 100.00
CDSL’s Major StakeholdersCDSL’s Major Stakeholders
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BO accounts 5.67 mn
DPs registered 475
Issuer Companies admitted 6,255
Securities under custody
•Volume 70.08 bn
•Value USD 137.02 bn
CDSL TodayCDSL Today
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Depository StructureDepository Structure
Depository ClearingCorporation
Issuer /Registrar
Clearing Members
DP
B e n e f i c i a l O w n e r s
DP DP DP DP DP DP DP
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Depository Role
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What a depository doesWhat a depository does
Records ownership of securities in electronic form
Records transfer of securities
Facilitates Pledge/Lock-in/Freezing of securities
Updates records when fresh securities are issued or
existing securities are extinguished in case of buy-back
Makes available up-to-date list of Investors (BOs) for
corporate actions
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Legal Framework
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The Depositories Act, 1996 Investor has the option to hold securities in Paper mode
or Electronic mode Depository will be the “Registered Owner” of the
securities in the ROM Rights, Liabilities and Benefits are with Shareholders
( who will be the beneficial owners of the securities )
Legal frameworkLegal framework
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Legal FrameworkLegal Framework
Depository to have net worth of Rs. 1 bn.
Investor holdings in the depository cannot be attached
except for orders from competent authorities
Mandatory indemnification against negligence
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SEBI (Depository & Participant) Regulations
Criteria for setting up of a Depository and for becoming a Depository Participant
Depository’s Bye-Laws Every depository to frame detailed Bye-Laws and
procedures for its operations All participants will enter into agreement to follow the
rules and regulations
Legal FrameworkLegal Framework
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Type of DPs
• Public Financial Institution• Bank under RBI act.• Foreign Bank with RBI approval• State Financial Corporation• Custodian• Clearing Corporation or Clearing House of Stock
Exchange• Stock Broker (CM)• Non Banking Finance Company (NBFC)• Registrar & Transfer Agent
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Securities admitted
• Equity shares
• Preference shares
• Debentures and bonds
• Commercial papers
• Certificates of deposits
• Government securities
• Exchange traded funds
• Pass – through certificates
• Warehouse receipts (Commodities)
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Type of accounts
• Individual
• Clearing Member
• Corporate
• FII
• Bank
• Mutual Fund
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Background of structure
• India is a vast country with large number of investors
• Accounts are opened and maintained by DPs
• Provide impetus to dematerialisation• BO level holdings are maintained as
compared to nominee level holding• Physical structure is replicated in demat
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Background of structure
• Switchover from physical trading to demat trades – phase wise
• Demat initially made mandatory for institutional investors
• Subsequently, made mandatory for retail investors
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Merits of structure
• Vast distribution network of DPs utilised effectively
• Competition amongst DPs– Ensures availability of depository services all across
the country
– Benefits of depository availed by all types of investors
– Ensures superior service quality
– Cost benefits
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Benefits to Investors
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Security-related benefits to Investors in the Security-related benefits to Investors in the depository systemdepository system
Offers safety and convenience compared to holding securities
in physical form
Enhances liquidity by instantaneous transfers
Operational risk minimised
Settlement cycle reduced from weekly settlement to T+2
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Other benefits to Investors in the depository systemOther benefits to Investors in the depository system Change of name, address, Power of Attorney, deletion of
deceased’s name - can be done across companies by one single
instruction to DP
Each share is a market lot for the purpose of transaction - so no
odd lot problem
Any number of securities can be transferred/delivered with one
delivery order. Therefore, paperwork and signing of multiple
transfer forms is done away with
No stamp duty on transfer of securities
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Risk Mitigation Measures
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• Internet based services – easi and easiest
• SMS Alerts (SMART)
• Dormant account monitoring
• Concurrent and Internal audit of DP operations
• Stringent networth requirements for DPs
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Statement of Holding of Securities in CDSL Demat
Account
Last 7 days transactions report for any ISIN
Know rate and valuation of holdings
Balances are updated after every 15 minutes from
main system
Information about DPs, Issuers & RTAs
Printing and downloading of Statement of Holding
easi (electronic access to securities information)
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Issue of
On-Market
Early Pay-in
Off-Market
Inter-Depository
instructions through internet
easiest (electronic access to securities information &
execution of secure transactions)
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Some recent innovations
SMART – SMS Alerts to registered accountholders for all debits and for credits arising from corporate actions and IPOs
Information about corporate announcements to registered users of easi
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Thank You!!
