final report on cdsl


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Page 1: Final Report on Cdsl



(With special reference to Central Depository Securities Limited)



UNDER SUPERVISION OF:Mr.Bhupendra singhJaipur Stock Exchange LimitedJAIPUR SUBMITTED BY: Keerti jain (7514)


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This project was not just a research work but was a memorable journey. I wish to acknowledgement the assistance of all those people who have contributed to this project I extend my sincere gratitude to Alok nigam(Depty general manager, JSEL securities ltd.,Jaipur) Who Sincerely put her whole effort in giving me the necessary guidance throughout the study period without which the project would not have been successful.

And without whose support this journey could not have been completed successfully. It is a matter of immense pleasure for me to acknowledge the valuable guidance and support given by Mr. Harsh Purohit to me throughout the course curriculum. I extend my sincere gratitude to my internal project guide, our dean Siddharth Shastri, who assiduously put his whole effort in giving me the necessary guidance throughout the project period. I have a great pleasure in placing on record my deep sense and gratitude to my corporate project guide for giving me the opportunity to take up this project in his organization and giving me constant encouragement throughout the project tenure. I also own my sincere gratitude to Mr. Bhupendra for imparting valuable information and guidance. Finally I would like to thank all the employees of the organization for providing needed information and support in completion of my project.

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Executive summary Introduction Contributions Research methodology Findings Questionnaires Analysis Recommendation Conclusion Bibliography

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The report commences with a brief description about stock exchanges in India, their objects and functions. Then the emphasis is shifted on to the detailed analysis of the working mechanism followed in JSEL. After brief information about the historical background of JSEL, the strength of the listed companies (786 companies are listed in JSEL) and investor service cell, the managerial structure and dimensions of their power are given. The stock exchange is managed by a governing board and it has powers which extend from election of office bearers, admission and expulsion of members to management of the properties and finances of the exchange. All these powers are exercised in the best interest of the investors, members and the general public.

Then a detailed description about the various functions and services performed by JSEL is given. It includes liquidity and marketability of securities, safety of funds, supply of long term funds etc.

A description about JSEL Securities, a wholly owned subsidiary of Jaipur Stock Exchange, is also given. It includes the various objects and functions performed by JSEL which mainly revolves around the interests of investors and members of JSEL. Then the information about the various softwares used and their applications are given. There are two back-office softwares and one front office software. Then an explanation about Depository and Registrar & Transfer Agent ( RTA ) along with their functions are given in the ending portion. The first part of report concludes with the information about future plans of JSEL such as organizing awareness and educational programmes and courses etc.

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The market for long term securities like bonds, equity stock and preferred stock is divided into primary market and secondary market. The primary market deals with the new issues of securities. Outstanding securities are traded in the secondary market, which is commonly known as Stock market or Stock Exchange. In the secondary market the investor can sell and buy securities. Stock market predominantly deals in the equity shares. Debt instruments like bonds and debentures are also traded in the stock market.

History Of Stock Exchange In India:

The origin of the Stock Exchanges in India can be traced back to the later half of 19 th

century. After the American Civil War (1860-61) due to the share mania of the public, the number of brokers dealing in shares increased. The brokers organized an informal association in Mumbai named “The Native Stock and Share Broker association” in 1875. The growth of stock exchange is suffered a set back after the end of World War. Worldwide depression affected them. Most of the Stock Exchange in the early stages had a speculative nature of working with technical strength. Securities and Contract Regulation Act, 1956 gave powers to the central government to regulate the Stock Exchanges. At present we have 23 Stock Exchange and 21 of them had hardware and software compliant to solve Y2K problem.

Functions Of Stock Exchange In India:

Maintains Active Trading:

Shares are traded on the stock Exchanges, enabling the investors to buy and sell securities. The prices may vary from transaction to transaction. A continuous trading increase the liquidity or marketability of the shares traded on the Stock Exchanges.

Fixation Of Prices:

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Price is determined by the transactions that flow from investors demand and suppliers’ preferences. Usually the traded prices are made known to the public. This helps the investors to make better decisions.

Ensure Safe And fair Dealing:

The rules, regulations and by-laws of the stock exchanges provide a measure of safety to the investors. Transactions are conducted under competitive conditions enabling the investor to get a fair deal.

Aids In Financing The Industry:

A continuous market for shares provided a favorable climate for raising capital. The negotiability and transferability of the securities helps the companies to raise long-term funds. When it is easy to trade the securities investors are subscribe to the initial public offerings. This stimulates the capital formation.

Dissemination of Information:

Stock Exchanges provide information through their various publications. They publish the share price traded on daily basis along with the volume traded. Directory of corporate information is useful for the investors’ assessment regarding the corporate. Handouts, handbooks and pamphlets provide information regarding the functioning of the stock exchanges.

Performance Induces:

The prices of stocks reflect the performance of the traded companies. This makes the corporate more concerned with its public image and tries to maintain good performance.

Self Regulating Organization:

The stock Exchanges monitor the integrity of the members, brokers, listed companies and clients. Continuous internal audit safeguards the investors against unfair trade practices. It settles the disputes between member brokers, investors and brokers.

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Benefits of Stock Exchange:

1. Flow of capital to profitable ventures:

The profitability and popularity of companies are reflected in stock prices. The prices quoted indicate the relative profitability and performance of companies. Funds tend to be attracted towards securities of profitable companies and this facilitates the flow of capital into profitable channels. In the world of Husband and Dockery “Stock Exchange function like a traffic signal, indicating a green light when certain fields offer the necessary inducement to attract capital and blazing a red light when the outlook for new investment is not attractive”

2. Motivation For Improve Performance:

The performance of a company is reflected on the price quoted in the Stock Market. These prices are more visible in the eyes of the public. Stock Market provides room for the price quotation fir those securities listed by it. This Public exposure makes a company conscious of its status in the market and it acts as a motivation to improve its performance further.

3. Promotion of investment:

Stock Exchange mobilizes the saving of the public and promotes investment through capital formation. But for these Stock Exchanges, surplus funds available with individuals and institution would not have gone for productive and remunerative ventures.

4. Reflection of Business Cycle:

Changing Business conditions in the economy are immediately reflected on the Stock Exchange. Book and depressions can be identified through the dealings of the Stock Exchange and the government can take suitable monetary and fiscal policies. Thus a Stock Market port rays the prevailing economic situation instantly to all concerned so that suitable action can be taken.

5. Marketing of new issues:

If the new issue is listed, they are readily actable to the public, since listing presupposes their evaluation by concerned Stock Exchange authorities. Costs of underwriting such issue should be less. Public response to such new issue would be relatively high. Thus Jaipur Stock Exchange helps in the marketing of new issue also.

6. Miscellaneous Services:

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Stock Exchange supplies securities of different kinds with different maturities and yields. It enables the investors to diversify their risk by wider portfolio of investment. It also inculcates saving habits among the community and paves the way for capital formation. It guides the investors in choosing securities by supply the daily quotation of listed securities and by disclosing the trends of dealing of the Stock Exchange. It enables companies and the government to raise resources by providing a ready market for their securities.


A. Brief History of Jaipur Stock Exchange:

Jaipur stock exchange limited was incorporated as a company limited by guarantee under the Companies Act 1956, on 28th December 1983. However Government of India recognized it as the 16th stock exchange on 9th January 1989. Jaipur stock exchange is assigned with the authority to run the trading activities from 21st August 1989. JSEL, earlier a company Limited by guarantee has been changed into a company limited by shares from 15.09.2005 vide SEBI notification No., S.Q.1315 (E) dated 15.09.2005.Accordingely, and the capital clause has been changed by the registrar of the companies, Rajasthan, Jaipur. 299 member have contributed to the share capital of the stock exchange by paying Rs.10,000/- each@Rs. 1/- per share and the share have already been allotted to them. The sanctioned of member of Jaipur stock exchange ltd. is 600. JSEL is ranking in 3 rd

position in Indian stock market map as far as membership strength is concerned. At present JSEL have 494 members. After demutaulisation of the stock exchange ltd. Trading membership and ownership has been segregated. These 494 members are trading member of the exchange and the 299 contributory members to the capital of the exchange are the shareholders of the exchange.

Listed Companies:

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786 companies are listed with Jaipur stock exchange ltd. as on 22.06.2006 with a paid up capital of Rs.6626.45 crores.

Investor Service Cell: The investor’s service cell of the exchange is functioning smoothly; this cell has been providing quick and expeditious redressal of grievances of the investors against companies and members.

B. Management of Jaipur Stock Exchange:

The Jaipur stock exchange is managed by “Governing Board”. The Governing board consist of elected member Directors from Stock Broker member, Public Representative and Government nominees nominated by the SEBI. The Jaipur Stock Exchange is managed by the Executive Director.

The Governing Board has wide power such as:

1. Election of the office bearers and setting up of committee like Listing Committee, Arbitration Committee, Defaulter’s Committee etc.

2. Admission and expulsion of members.3. Management of the properties and finance of Exchange.4. Framing and interpretation of rules, Bye-Laws etc. for the regulation of Stock

Exchange.5. Adjudication of disputes member and outsiders.6. Management of the affairs of the Exchange in the best interest of the investors

and public interest.

C. Functions/ Services of Jaipur Stock Exchange:

The Stock Market occupies a pivotal position in the financial system. It performs several economics functions and renders invaluable services to the investors companies, and to the economy as a whole. They may be summaries as follows:

1. Liquidity and Marketability of Securities:

Stock Exchange provides liquidity to securities since securities can be converted into cash at any time according to the discretion of the investors by selling them at the listed prices. They facilitate buying and selling of securities at listed prices by providing continuous marketability to the investors in respect of securities they hold or intend to hold . Thus they create outlet for dealing in securities.

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2. Safety of Funds:

Stock Exchange ensure safety of funds invested because they have to function under strict rules and regulation and Bye-Laws are meant to ensure safety of invest able funds over trading, illegitimate speculation etc., are prevented through carefully designed set of rules. This would strengthen the investors confidence and promote larger investment.

3. Supply of Long Term Funds:

The Securities traded in the Stock Market are negotiable and transferable in character and as such they can transfer with minimum formalities from one hand to another so when a security is transacted, one investor is substituted by another, but the company is assured of long term availability of funds.


(A wholly owned subsidiary company of Jaipur Stock Exchange )

Jaipur Stock Exchange Limited has its wholly owned subsidiary i.e. JSEL Securities Ltd. Out of the trading members,129 persons were opted to become sub-broker of JSEL Securities Ltd. (a wholly owned subsidiary of JSEL). Out of them 85 sub- broker are active and doing business in BSE through the subsidiary company. There are 250 terminals in JSEL securities ltd. having turnover of Rs.40 crores to Rs. 50 crores per day. JSEL Securities Ltd. is also the Depositary Participation of Central Depositary Services (India) Ltd. (CDSL).


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A. The main objects of company is to persuaded by the company on its corporation:

1. To apply for and acquire membership of any recognized stock exchange in India or abroad subject to compliance of rules and regulation or guide lines of SEBI, Ministry of finance, Ministry of law, justice and company affairs, Reserve bank of India or any other regulatory body anywhere in India or broad as may be required for the purpose of purchase, sell, deal, and transact all kind of securities with a view to provide trading facilities and platform to member of JSEL provide that company shall not undertaken any dealing in securities in on its own account

2. To carry on the business of purchasing, underwriting, acquiring, holding, trading, buying, selling, brooking, transferring, hypothecation, disposing of or dealing in all kind of securities, to act as full fledged depository participant or clearing house depository participants or in such other capacity may be permitted by relevant law from time to time to act as a managers , advisors and registrars to the issues, transfer agents ,merchants, or investment broker, portfolio managers ,guarantors, advisors, and to act as discount house and clearing house for securities , custodians issuers stock lender market makers etc.

3. To invest the surplus amount for the furtherance of objective of spread of equity cult, investors education and dissemination to the general public.


1. To receive, hold in trust as trustee, agent or nominee or sell, transfer, exchange assign, or deal with manage and turn to account and real and personal property of all kinds and in particular shares, debentures, securities of all kinds, and to collect and receive all dividends, interest and other money payable or receivable of any property and securities to hold.

2. To act as financial consultants, advisors and managers and to invest in, buy, underwrite, acquire in any manner, hold, sell or dispose of either of in the same of the company or as a nominee of any person or persons, company, corporation, government state etc. shares, stocks, debentures, stock, bonds, obligation, securities and to deal with and turn to account the same provide always that no investment imposing liability of the company shall re- made.

3. Subject to the provisions of various applicable acts, rules and regulation, to invest, acquire, hold in all kinds of shares, stocks, debentures stocks, bonds, issued, or guaranteed by any company, co-operative society or public enterprise

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in India or elsewhere or by any government state, either by original subscription, tender purchase, exchange or otherwise and to underwrite and guarantee the subscription there of.

4. To receive money securities and valuable of all kinds on deposit with or other securities or obligation and to undertake or execute any other trusts and also to undertake the office of or exercise the power of executor, administrator, receiver and tryst corporation.

5. To act as trustees of any deeds consisting or securing debentures, stock or other securities or obligation and to undertake or execute any other trusts and also undertake the office of or exercise the power of any executor, administrator, receiver, custodian and corporation.

6. To carry on the business of management consultants and for the purpose to take part in the formation management, supervision or control of the business or operation of any company or undertake and to act as a administrator, manager or accountants


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By Preeti Verma:

Q-1.Does one need to keep any minimum balance of securities in his account with his DP? Ans-No, the depository has not prescribed any minimum balance. You can have zero Balance in your account.

Q-2.How can one convert physical holding into electronic holding i.e. how can one Dematerialize securities?Ans-In order to dematerialize physical securities one has to fill in a demat request form(DRF)which is available with the DP and submit the same along with physical certificates one wishes to dematerialize. Separate DRF has to be filled for each ISIN number.

By Sonam Midha :Returns from both the channels are almost similar as per t-test.Returns in gold ETF is more than gold by 100 basis point.

If you are a long term investor and liquidity problem won’t bother you much Quantum Gold ETF is a good bet, otherwise Gold BeEs ETF is the best one. SBI Gold ETF are less volatile than other Gold ETFs.

By J.N.SINGH:During the last 12 months, the number of BO accounts with CDSL has increased by 96% from 11.16 lakhs on June 30, 2005 to 21.91 lakhs on June 30, 2006

By Rahul:

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1) Construction industry is one of the world’s largest industrial employer.2) Despite economic slow down, the industry registered double digit growth rate.3) Indian construction industry is growing at 24.7%.4) Availability of huge skilled and unskilled labor.


1) Lack of modern and scientific techniques such as PERT, CPM, Project Engineering.

2) Low Profit margins despite massive investment.3) Lack of incentive based contractual system.4) Cash flow indiscipline.


1) Increased focus on Bhart Nirman, GQ(Golden quadrilateral) and NSEW corridor and increased allocation for NHDP will benefit all construction companies.

2) New metro rail project will be beneficial for companies which has a strong expertise in this area, namely ITD Cementation and SIMPLEX Infrastructure.

3) DBFO model should be positive for companies who have prior experience in building express ways.


1) Increased participation from the foreign players has created cut throat competition.

2) Increases in MAT (minimum alternate tax) will have a negative impact on earnings of the companies.

By Shruti:

Page 15: Final Report on Cdsl

Licensed Anti virus software named Quick Heal is loaded on all PCs which are connected through LAN from February, 2006 till date.

It is observed that date definitions and virus signatures are up date.

Suggestion: Formal guideline should be given for regularity of such updating.

It is that Anti Virus software configured to check virus form floppy CD Rom/ e-mail automatically.

Suggestion: This practice should be continued. It is explained to us that CDs of application are adequately secured and time to time physical verification done by officer of the company.


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Sampling method-Convenient sampling

Data universe-60 lakh approx.(Jaipur city)

Sample size-67

Primary data-Questionnaires

Secondary data-Websites and magazines



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The software use in the organization can be sub divided into two parts

1) Back office software: (a) Mangalam (b) Synergy

The Mangalam Software is related to brokers and its application is confined to processing and storing of data related to brokers. It includes information about membership fees, margin requirements etc.

The Synergy’s “E- Stock” Software basically deals with processing and storing of data related to pay- in and pay-out of funds.

The Synergy’s “E- Volve” software basically deals in:

Finance: Accounts info :

Group/ledger master Cost center master Opening balances Define voucher type Define standard narration Define transaction limit Define expenses head Define voucher verification type Define parameter Bank master

Transactions : Daily voucher entry Post plan voucher Voucher verification Bank provisional entry Creditor cheque generation

Enquiry : Day books Statement of accounts Ageing analysis Ageing with maximum minimum balances Trial balance Profit and loss account Balance sheet

Bank reco : Bank reco(manual) Bank import Auto bank reco Bank reco enquiry

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Payment gateway Payment vouchers Payment verification Cheque issued Cheque cancellation Cancelled cheque

MIS reports : Client account analysis Cheque received enquiry Debtor analysis Online voucher printing Fund transfer Inter segment fund transfer

Masters: Customer profile Group/family/branch/franchisee definition Brokerage slabs Monthly brokerage

Cash segment:


Import Trades import Closing price import




The stock exchange, mumbai

A-Auction(BSE short)B-Auction(Internal)C-Auction(BZ)R-RollingX-Auction tradesZ-T2T

1213105 050612 to 060612

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Query manager Trades confirmation

Options: Trades matching manual Trades entry Utilities

Premium updation Brokerage re-calculation Rebilling Exercise billing Unmark daily settlement

Dividend Administrative Audit trail Passward Exit

2) Front office software:


The front office software in use is C-DAS. It is directly connected with CDSL. It performs function such as keeping records about holding, trading (transactions performed) and client’s information and furnishes the required information, as and when necessary. It has also its role to play in the financial calculations relating to dealing, holding, transactions related with Beneficial Owner (B.O.’s)


A Depository is an origination where the securities of the investors are held in electronic form, at the request of the investor through the medium of a D.P. It is a

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company formed and registered under The Companies Act, 1956 and which has been granted a certificate of registration under the relevant section of the SEBI Act, 1992.


A Depository participant is an agent of the depository and is authorized to offer depository services to the investors. According to SEBI guidelines, financial institutions, banks, custodians, stock- brokers etc. can become D.P. of a depository.


1. Beneficial Owner Accounting System:

This module allows DP to set-up accounts for various categories of investors. Various name like name and address of BO, additional details of the BO, signature and power of attorney can be stored in the system. This module also provides facility for closing an account.

2. Dematerialisation:

This module allows DP to set-up, modify or delete demat requests and monitor their static.


This module allows DP to set-up, modify or delete demat requests and monitor their static.

4. Transfer and Transmission:

This module is used only in the event of death of an A/C holder. The balance can be moved in two ways.

a) One to many (ISIN wise)b) One to one (All ISINs)

5. Off Market:

Off market trades result when securities are transferred between two accounts maintains in CDSL DPs.

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6. Interdepository Transfers:

This module is used to transfer/receive the securities from an account in CDSL to/from any other account of the other depository.

7. Settlement:

Through this module, the DP can enter on-market instructions for delivering the securities for respective settlement, for which the BO/CM has traded on the exchange. Facility for early pay-in is also provided in this module.

8. BO Upload:

The DP can capture the details of the intending BOs in his back office software and then upload the files through this option for settings up BO accounts in CDSL.

9. Upload:

Similar to BO upload, this module allows a DP to upload files for transactions such as Demat, off market, inter depository, Settlements, Early pay-in etc.

10. Pledge And Unpledge:

The DP can set-up, modifies, delete, accept or reject the pledge request for his BO. Unpledge or invocation of the same can also be done through this module.

11.Corporate Action:

This module facilitates DPs to inquire the details of corporate actions set up by Issuer/RTA.

12. Initial Public Offer (IPO):

This module facilitates DPs to inquire the details of initial public offers set up by issuer/RTA.


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It means a registrar to an issue of any securities and/or a transfer agent in respect of any securities appointed by the issuer on its behalf who has been granted the certificate of registration by the Securities and Exchange board of India under Sub- Section(1) of Section 12 of the Securities and Exchange Board of India Act, 1992.

Function for Issuer/ RTA:

1. BO A/C Maintenance System:The Issuer/RTA is providing with only inquiry of those BO accounts, which hold balances of ISINs serviced by that issuer/RTA.

2. Demat-RTA:This module allows issuer/RTA to process demat request set-up by a DP for his BO.

3. Corporate Action:This module is used by the issuer/RTA to set-up, modify or delete various corporate actions and submit the allotment file if applicable.

4. Initial Public Offer:The issuer/RTA can set-up, modify, delete IPO request for his ISIN & submit the allotment file through this module.

5. Rematerialisation:This option allows Issuer/RTA to process remat request set-up by DP for his BO.

6. Interdepository Transfer:This module provides information on the inter depository transfer for the ISINs serviced by the issuer/RTA for reconciliation of the Register of Member (ROM).

7. Reconcilation:This is an important module for the issuer/RTA to reconcile his books with the records maintained by CDSL on daily basis.

8. RTA-BO ISIN Inquiry: This module is used to inquire balances of BO holding ISINs serviced by them. It provides transaction details also.


JSEL-Institute of financial Services and Research (JIFSR):

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JSEL will soon start an institute of financial services and research at its own premises. The institute, The first of its kind in the state, in its first phase will run both distance and regular education programmed to diploma and certificate courses in financial derivatives, commodity, capital market and depository system. it will also start various diploma and certificate courses in money market , debt markets, foreign exchange markets, banking and insurance, risk management and research assistance for financial services projects. It will have expert facilities from regulatory authorities like securities and exchange board of India (SEBI), stock exchanges, forward markets commission(FMC), commodity exchanges and leading professional bodies.


The Depository Participant (DP) is the link between the shareholder, the company and CDSL and provides the following services:


To utilize the services offered by a depository, any person having investment in any security or intending to invest in securities needs to have a demat account with a CDSL-DP. This holder of such demat account is called as "Beneficial Owner (BO)". A BO can maintain a demat account with zero balance in such account. A BO can open more than one account with the same or multiple DPs, in the same name/s and order, if he/she desires so. The investor can approach any DP/s of his/her choice to open a demat account.

Process for Account Opening:

a) The process of opening a demat account through a DP of CDSL is very easy and simple. It is similar to the opening of a bank account.

b) Investor has to choose a DP from the list of CDSL DPs published in CDSL info line or accessible through the CDSL website

c) Besides submitting an application in the prescribed form, the investor has to provide a proof of his identity and address, such as PAN card, passport, ration card, etc. to the DP.

d) Before demat account is opened, the investor will have to execute an agreement on a stamp paper to be provided by the DP, which defines the rights and obligations of both, the investors and the DP.

e) On opening an account, a unique BO ID (beneficial owner identification) number is allotted, which should be quoted in all future transactions.

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Investors, both individuals and non-individual, have a choice to open a demat account with any CDSL DP. Individual investors could be Indian residents or NRIs non-individual BOs include corporate, FIs, FIIS, Mutual Funds, Trusts etc. Also under the scheme of two way fungibility of ADR/GDR, non residents can open a demat account with a CDSL DP.

BO should consider fee structure, locational convenience and the track record of the DP before selecting a DP for opening his demat account.

More than one demat account can be opened in identical names with the same or different DPs with the same depository and /or with both the depositories.

A demat account can be maintained even with ‘nil’ balance, as there is no requirement of holding any minimum-security balance in a demat account.

If securities are already held in joint names, the demat account should be opened in the order of names in which the securities are held. If the securities are held by an individual jointly with different persons, separate demat accounts will have to be opened for each of such combinations. However, if the same persons hold securities in different order of their names, one single demat account in names of all these persons (not exceeding 3 persons) would be sufficient, provided the facility of transposition-cum-demat is used.

At the time of opening a demat account or anything thereafter, individuals having a demat account in a single or joint name/s can make a nomination. In the unfortunate event of demise of one of the joint holders, the securities can be transmitted in the names of the surviving holder/s. but, in the event of demise of the sole holder or all the joint holders, the securities can be transmitted in the name of the nominee.

A resident Indian can nominate an NRI or another resident Indian and similarly an NRI can nominate a resident Indian or another NRI. Non-Individual including societies, trusts, body corporate, Kartas of HUF, holders of power of attorney, cannot make nomination.

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a) An application in the prescribed form duly completed.b) Certified copy of an election-id card / passport /ration card/PAN card or driving


c) A certified copy of birth certificate and guardian’s name, in case of a minor.

d) A passport size photograph of each of the applicants with his/their signature/s put across the photograph/s.

e) In case of any attestation by a magistrate / notary public/ special executive magistrate, the name, address and telephone number of the magistrate /notary public/special executive magistrate.

f) A copy of the power of attorney, if required.

g) Agreement in the prescribed form duly executed.


a) An application in the prescribed form duly completed.b) A certified copy of the memorandum and articles of association of the company.

c) A certified true copy of the board resolution authorizing opening of demat account and listing out the names of the officials authorized by the board to act as authorized signatory (ies).

d) Names of the authorized signatories, their designations with specimen signatures.

e) A copy of power of attorney duly executed.

f) In case of attestation by any magistrate/notary, public/special executive magistrate, his name, address and telephone number.

g) Agreement in the prescribed form duly executed.

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Additional Requirements for Some Categories of Investors:

BO category Additional requirement

Non resident Indian nationals or persons of Indian origin(NRI)

In case of an NRI opening Boa/c singly or jointly with another NRI and /or

resident Indian, a declaration by the first or sole NRI applicant who is eligible to invest on repatriable basis in terms of FEMA notification no.20/2000-RB

dated 03/05/2002 together with a proof of residence outside India.

HUF Name of the ‘KARTA’, if the account is opened in the name of a HUF.

Trust A certified copy of the trust deed along with the list of authorized signatories

with specimen signatures

Partnership firm The account has to be opened in the names of the partners and application

should be submitted with the requirements as early as mentioned.

Proprietorship firm The account should opened in the name of the sole proprietor and application

should be submitted with the requirements as earlier mentioned

Clearing members A certified copy of SEBI registration along with a conduct certificate from

each of the exchange where the CM is a

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Foreign institutional investor(FII) and overseas corporate bodies(OCB)

A certified copy of SEBI/RBI registration.

Some Basic Facts For The Demat Accounts:

Number of accounts:

More than one demat accounts can be opened in the similar / identical name and order with the same DP or different DPs.

Minimum account balance:

There is no requirement of holding minimum-security balance in a demat account; you can maintain zero balance in your account. Ready availability of account enhances your transaction making ability.


Individuals holding beneficial accounts on their own behalf either singly or jointly have the facility of making nomination. (Non-individuals including societies, trusts, body corporate, partnership firms, karats of HUF, holders of power of attorney however, cannot nominate). In the event of the death of one of the joint holders, the securities will be transmitted in the names of the surviving holders. If the sole or all the joint holders are deceased, the shares will be transmitted in the name of the nominee.

Statement of account:

A periodical statement of holdings and transactions is provided by DP. This can also be asked for from the DP.

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Credit confirmation:

In order to receive all the credits coming to demat account automatically, a one time standing instruction can be given to the DP at the time of opening your account.

Change of address:

For any change of address, if any, communication to your DP in writing is sufficient. The DP will ensure that the change is incorporated for all securities held in your demat account. You need not write to all the companies separately.


According to the depository act, 1996, an investor has the option to hold share either in physical or electronic form. However SEBI has notified that settlement of trades in almost all listed securities should take place only in demat mode. Although, trades up to 500 shares can be settled in physical form, physical settlement is virtually not taking place for the apprehension of bad delivery on account of mismatch of signatures, forgery of signatures, fake certificates. Dematerialization is a process by which physical certificates (of shares / debentures / other securities) are converted into electronic balances. A BO has to submit the request for dematerialization by submitting the demat request form (DRF) duly completed along with the concerned physical certificates, to his/her DP.

Benefits of holding securities in the Dematerialized from:

a) Elimination of all risks associated with physical certificates: There is no risk of loss, mutilation or theft of certificates.

b) Elimination of bad deliveries: In the depository environment, securities cannot be returned “under objection” for any reason and hence the question of bad delivery does not arise nor does the investor face any uncertainty on the genuinely of securities purchased by him.

c) Effects immediate transfer and registration of securities: After the payout, once securities are credited to the investor’s demat account maintained with a DP, the investor becomes the owner of the securities, as there is no further need to seek registration from the company or its registrar.

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d) Faster settlement cycles: All stock exchanges currently follow T+3 rolling settlement cycle i.e. settlement of trades is done on the 3rd working day from the trade day. This has become possible because of demat, which enables faster turnover of securities and enhances liquidity.

e) Faster receipt of securities in case of bonus/ split/ merger etc: Direct credit of securities issued as bonus or on allotment of IPO/ rights, split and merger ensures faster receipt of securities and avoids risk of loss of certificates in transit.

f) Waiver of stamp duty: No stamp duty is payable by investors for transfer of any kind of securities in demat form.

g) Facilitates recording of change of address, transmission, etc.- for all investments held in the a/c, instead of advising each company separately about the change in address, bank account particulars, nomination, one single advice to the DP takes care of all such changes.

h) Ease of portfolio monitoring: The statement of account periodically sent by the DP provides the investor the consolidated position of all his investments in the demat account. This makes it convenient for an investor to compare and monitor his portfolio.

Procedure for Dematerialization:

To dematerialize any physical security, one will have to open a demat account with a DP of one’s choice. Thereafter, all one has to do is to fill in a DRF (Demat Request Form) and submit the same with the shares/ securities certificate/s to the DP for dematerialization. DP defaces and sends these certificates to the issuer/ registrar who credits an equivalent number of securities in the demat account maintained with CDSL. For each scrip, a separate DRF has to be used.


BO accounts also have a facility for nomination in favor of any person. Individual applying for / holding shares / debt securities on their own behalf singly or jointly with one or two persons can make nominations. If the shares are held jointly, all the joint holders are required to sign nomination form. Non-individual including societies, trusts, body corporate, partnership firm, kartas of Hindu undivided family, holders of power of attorney cannot make nomination.

A holder of shares / debentures can nominate a minor, represented by one of the parents or guardian.

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Trusts, societies, body corporate, partnership firms, Kartas of Hindu undivided family or power of attorney holder cannot be appointed as nominee.

Residents, Indian as well as NRIs can nominate an NRI. Similarly, an NRI can nominate a resident Indian or another NRI.

Irrespective of the fact whether securities are held singly or jointly, only one person can be nominated. In the event of the death of the sole BO or all the joint BOs, all rights in the securities held in the demat account will vest with the nominee.


CDSL offers a facility for transmission of balances held in BO account/s (to other BO account/s) if so required due to death, lunacy, bankruptcy, insolvency or required due to operation of any law.Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. Process of transmission in case of dematerialized holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting necessary documents to the DP, whereas in case of physical securities the legal heirs / nominee / surviving joint holder has to independently correspond with each company in which securities are held. The claimant should submit to the concerned DP an application in transmission request form (TRF) along with the following supporting documents:

1. A notarized copy of the death certificate, In case of death of the sole holder where the sole holder has appointed a nominee.

2. In case of death of the sole holder, where the sole holder, where the sole holder has not appointed a nominee:

a) A notarized copy of the death certificate, and b) Any one of the below mentioned documents

(i) Succession certificate (ii) A certified copy of the will and the probate (iii)A certified copy of the letter of administration

3. The DP, after ensuring that the application is genuine, will transfer securities to the account of the claimant.

4. The major advantage in case of dematerialized holdings is that the transmission formalities for all securities held in a demat account can be completed just by interaction with the DP alone, unlike in the case of physical securities, where the claimant has to interact with each issuer or its registrar separately.

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5. TRANSPOSITION: “When a BO wants to change the order of names in which certificates are issued is termed as transposition”

Significance of Transposition in demat:

Sometimes, a title holder of securities holds them jointly with one/two/three persons in different order of names for variety of reasons. Since dematerialization can take place through a demat account only in the identical order of names, such investors would have to open multiple demat accounts as per the order of names. To avoid such a situation, the investor could consider using the transposition-cum-demat facility offered by CDSL.


Transposition-cum-demat facility enables an investor to transpose names of the jointly holders in desired order along with the process of dematerialization of certificates. Transposition-cum-demat facilitates dematerialization of certificates held in different order of names through one demat account. Provided securities to be transposed are held to the order of the same titleholder. Illustratively if ‘A’ owns a security which he holds in the joint names of ABC, ACB, etc. he can first transpose them in the name of say ABC in which order demat account might have been opened. No new name can be added through transposition process. Similarly, existing names can not be deleted.

The BO should submit his application in transposition request form (TRF) along with the demat request form (DRF) and share/ securities certificates.

Separate TRPF should be filled for each ISIN. Different combination of names can be listed in separate boxes in section (C) of

the TRF. If the space provided in the TRPF is not found sufficient form or an annexure may be used.

(a) The application for transposition should contain only those names in which the BO account has been opened.(b) Signatures of all the holders affixed on TRPF should tally with the DP’s record.

CDSL does not collect any fee from DPs for processing transposition-cum-dematerialization.

The application for transposition cannot be used along with dematerialization request.


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“If the BO decides to pledge any securities in his BO account, he can avail of the same by submitting the pledge creation form duly completed, to his DP.”

Some basic facts for pledging:

Not only that demat securities can be pledged, in demat form the BO may be able to get higher loan amounts, with reduced margins & lower rate of interest. In respect of pledged securities, banks can give advance to the extent of Rs.20 lacs at a reduced margin of 25% as against the amount up to Rs.10 lacs with 50% margin that can be advanced in case of physical holdings. Some banks even charge lower interest rate for advances against demated securities. Moreover, procedure for pledging securities in demat form is more convenient both for the pledgor and the pledgee.

All securities other than Government Securities can be pledged.

CDSL permits locked in securities to be pledged. However, it is the option of the pledgee whether locked in securities are to be accepted in pledge.

The pledgor continues to remain the beneficial owner of the pledged securities and will therefore receive the corporate benefits during the period of pledge.

The pledged securities can be dematerialized with the prior permission of pledgee bank.

Procedure for pledging and unpledging:

The pledgor and the pledgee must have Beneficial Owner accounts with CDSL. These accounts can be with the same DP or with different DPs.

The pledgor has to fill up the "Pledge Request Form" (PRF) in duplicate. The pledgee may countersign the PRF. One copy of PRF should be given to the DP for setting up the pledge and second copy shall be sent to the pledgee.

On receipt of the PRF, the pledgor's DP verifies that the securities to be pledged are unencumbered and there is a free balance. The DP then sets up a pledge in the depository system and a unique Pledge Sequence No. will be generated.

Second copy of the PRF (with the PSN) should be sent to the pledgee.the pledgee will then countersign the PRF for acceptance or rejection and then submit it to his DP.

The pledgee’s DP can access the request on line. Based on the pledgee's copy of PRF received from the pledgor, the pledgee's DP either accepts or rejects the request using the accept/reject flag.

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Procedure for pledging and unpledging:

The pledgor through his DP makes a request for unpledging the pledged securities by submitting the "Unpledge Request Form" (URF). The DP sets up an unpledge request in the depository system.

The pledgor should provide a copy of "URF" to pledgee.

The pledgee will instruct his DP to accept the unpledge request by submitting the copy of "Unpledge Request Form". The pledgee's DP can access the 'Unpledge Setup' online.

On acceptance/rejection of the unpledge request, the status is changed from 'Unpledge Setup' to 'Unpledge Accepted' or 'Unpledge Rejected'.

The securities can also be unpledging by giving a duly filled DRF to the DP. This facility is called “Auto Unpledge”, where no instruction is required to the given by the pledgor.


On Market

“Any transaction for sale and purchase of securities through a broker on the stock exchange to be settled through Clearing Corporation /Clearing House is generally termed as 'On Market' transaction.”

Off Market

“Off Market Transaction is one which is settled directly between two BOs with or without using the broker and where no Clearing Corporation /Clearing House is involved”

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In CDSL system, inter depository transactions can be executed through the same instruction slips as used for on market and off market transactions. However, the other depository has currently prescribed a separate instruction slip for inter depository transactions, which can be obtained from DPs.

Transaction Charges

Demat transaction charges including the fees (if any) levied by CDSL are collected by DPs. DPs after adding their mark up if any, give a composite charge which is intimated by them to their clients.

What is Settlement Number

Settlement number has 7 digits, the first 4 digits represent the year and the remaining 3 digits represent the settlement number of the exchange on which the transactions has been executed.

Different market types for settlements through CDSL

Market type description Character codesRolling market

Normal rolling (NSE)Auction rolling

Normal auction (NSE)Company objection

Company objection auctionTrade to trade


Inter Depository Transaction

“Any transaction between two parties not having demat accounts with the same depository is termed as an 'Inter Depository' transaction.”

Shares can be bought and sold only through a stock broker. DP facilitates delivery of securities against a sell transaction or receipt of securities for a buy transaction.

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Procedure for delivery of securities in demat form in case of sale of securities

The procedure for selling dematerialised securities through any stock exchange is similar to the procedure for selling physical shares. However, the procedure for delivery of securities is much simpler when compared to the sale of securities in physical segment. In case of sale of demat security, immediately on receipt of intimation of execution of trade from broker, the seller should issue instructions to the DP with whom he maintains his demat account, for delivery of security either directly to the Clearing Corporation/Clearing House or to the broker's clearing account, as advised by his broker.

Procedure for receipt of securities in demat form in case of purchase of securities

Purchaser of securities can give one-time standing instruction to his DP for receiving securities in his account. This standing instruction can be given at the time of opening of account or later. Alternatively, an investor may choose to issue separate receipt instruction every time he makes any purchase of securities.

Client Level Pay-in:

Facility to deliver securities to clearing corporation/ clearing house directly from the demat Account of investor is termed as Client Level Pay-in CDSL provides the facility of client level 'normal' and 'early pay-in' for BSE settlements and client level 'early pay-in' for NSE settlements.

In the present market environment of T+3 pay-in settlement cycle, faster settlement of securities can be facilitated through client level pay-in.

Client level pay-in avoids issuance of multiple instructions i.e. first from client to CM and then from CM to Clearing Corporation/Clearing House. Last minute pay-in is possible through the client level pay-in.

Client level pay-in avoids counter party risk associated with the delivery of securities through an intermediary


BOs should take following precautions with respect to instruction slips:-

Ensure that the DP issues instruction slip book. Ensure that instruction slip numbers are pre-printed and DP takes

acknowledgment for the instruction slip booklet issued. Ensure that the demat account number is pre-stamped. If only one entry is made in the instructions slip, strike out remaining space to

prevent misuse by any one.

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All details like target account -id, quantity. ISIN, etc. in the instruction slip should be filled in by BO himself.

Should use separate instruction slips for confirming On - Market / Off - Market / Inter depository obligations / transfers and also separate slips for Delivery and Receipt Instructions.

In case of a Joint Account, all the account holders must sign the instruction slip.

Submit the instruction slip in duplicate and obtain the DP's acknowledgement / receipt stamp on the copy of the instruction slip and retain the same in safe custody.

Keep the instruction slips in proper custody under lock and key when not in use. In case of any loss / misplacement, the same should be intimated to the DP immediately.

Should never sign and keep a blank instruction slip. All the holders must confirm any alteration, correction or cancellation made

on the instruction slip with their signatures.


“If any person required to deliver a security in the market does not readily have that security, he can borrow the same from another person who is willing to lend as per the Securities Lending and Borrowing Scheme permissible under the current regulations.”

Lending and borrowing has to be done through an 'Approved Intermediary' registered with SEBI.

For lending and borrowing of securities the investor should get in touch with approved intermediaries like Stock Holding Corporation of India Ltd. (SHCIL), Deutsche Bank, Reliance Capital Markets Ltd., etc.

CDSL system is being enabled to undertake lending and borrowing of securities through demat account opened with it.


Corporate action:

“Distribution of dividend/interest, issue of rights/bonus, consolidation of holdings or issue of another security on account of merger /demerger, calling of money for partly paid securities, buyback/ open offer, etc. is normally the purposes for which issuer sets up corporate action to reckon benefits/entitlements of holder.”

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Initial public offer:

“When a company issues shares to the public through a prospectus it is popularly known as an IPO. Credit of shares allotted in IPO’s can be effected in the investors demat accounts in demat form directly.”

Some facts:

It is possible to get securities allotted in Public Offerings directly in the electronic form. In fact, in the public issue application form itself, there is a provision to indicate the manner in which an investor desires the securities allotted. All that is to be done is to mention the BO ID and name and ID of the DP on the application form. Any allotment made will be credited into the BO's account directly and the BO will get intimation to that effect from the company.

There is a choice of receiving the non-cash corporate benefits either in electronic or in physical mode. Issuers send intimation directly to investors for ascertaining their choice in this regard.

In case of any discrepancy in non-cash corporate benefits investor should approach his DP, who in turn will contact the Issuer / Registrar to obtain clarifications regarding allotment of securities. In case of any discrepancy in cash corporate benefit, the investor should contact the Issuer / Registrar directly.

If shares are held in physical form, the BO can choose to receive the rights/ bonus allotment in the dematerialized form by credit to demat account with a CDSL DP. The BO will have to inform his intent to receive the rights/bonus in dematerialized form to the Issuer/RTA.

The option to receive the rights/ bonus allotment through any account lies with the investor. The issuer/ RTA will credit the allotment to the account, details of which are given in the form sent by Issuer/ RTA for ascertaining the investor's choice of the manner in which allotment of bonus/ rights is to be received.

As in the physical segment, the Issuer / Registrar mails the rights form directly to all investors including those in the demat segment. CDSL would not be mailing the same.

If an investor requests for credit of rights / bonus allotment in dematerialized form without having a demat account, in such a case the rights/bonus allotment would have to be issued in physical form

The basis of allotment of securities is independent of the form (physical / dematerialized) in which they are applied for. Thus, in such cases there will be no preference given for any allotment. Such applications are treated on par with requests for allotment in physical form.

In case of electronic form, investor get his securities credited to demat account on the effective day indicated by the Issuer/ RTA as against time of 15 - 20 days taken for receiving securities in physical form, because in such cases certificates have to be prepared and dispatched.

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Means to identify partly and fully paid up securities:

A separate ISIN is issued by depositories to identify partly paid up securities.

These are also traded separately at the stock exchanges.

The company issues call notices to the beneficial holders of partly paid up securities in the electronic form.

The details of such beneficial holders will be provided to the Issuer / Registrar by CDSL.

After the call money realization, Issuer / Registrar will electronically convert the partly paid up shares to fully paid up shares.

If the holdings are in dematerialized form, the bonuses / rights against them be issued in the following form:

The Issuer/RTA regularly obtains holdings report on ISIN balances from CDSL. On the basis of holdings report, the Issuer/RTA issues advice for credit of bonus/rights shares in the demat accounts. However, an investor has an option to receive bonus/rights shares in physical form.

The Issuer/RTA may, if the benefits are given in the form of securities, distribute such benefits to the investor through CDSL by electronically crediting the BO account provided that:

1. The newly created security is an eligible security and has been admitted into CDSL

2. The investor has consented to receive the newly created securities through the CDSL account in dematerialized form

Where allotment is made in demat form, the Issuer or its RTA sends allotment advice to the BO.

Securities directly credited to the BO account will be reflected in the statement issued by DPs.

In case securities are not admitted with CDSL system, the Issuer/ RTA will distribute the corporate benefits in the physical form directly to the investors.

Disbursements of the corporate benefits arising in respect of demat holdings; say a bonus or rights or dividend:

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When any corporate benefits such as rights or bonus or dividend is announced for a particular scrip, CDSL provides to the concerned issuer / RTA details of the investors, their electronic holdings as on record / book closure date for reckoning the entitlement of corporate benefit.

The Issuer / Registrar then calculate the corporate benefits due to all shareholders.

The disbursement of cash benefits such as dividend is made by the Issuer / Registrar directly to the investors.

Credit of non-cash (bonus, rights) entitlements in the BO's demat account is done by CDSL based on the information provided by the Issuer / Registrar.


All types of debt instruments viz. bonds, debentures, commercial papers, certificates of deposits, etc. irrespective of whether these instruments are listed / unlisted / privately placed can be dematerialized with CDSL, if they had been admitted with CDSL. Debt instruments, mutual fund units, government securities can also be dematerialized in the same demat account where equities are held.


“CDSL has introduced an "Account Freezing" facility for demat account holders, which allows a demat account holder to freeze all the securities held in a demat account. I.e. no transaction will be executed from the account. A demat account holder has an option to either freeze the entire demat account or to freeze only a specified ISIN in the demat account.”


Some of the features of Account Freezing facility are as follows:

A demat account holder can utilize the Account Freezing facility as a safekeeping measure, as it temporarily "immobilize" the demat account

The Freeze facility gives an option to the account holder to either freeze all the ISINs held in a demat account can or to freeze only specific ISINs.

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A demat account holder can utilize the Account Freezing facility by giving the instructions to his/her DP through 'Freeze/Unfreeze Request Form'.

A demat account holder can use the freeze facility for blocking: Only Debits i.e. only credit of securities is allowed Only Credits i.e. only debit of securities is allowed. Both Debits as well as Credits in the account.

The duration of the Freeze can also be specified by a investor as: Temporary i.e. for a specified period by specifying "Expiry" date. Permanent i.e. Freeze expiry date is not specified. Activated immediately or at a future date, by specifying the

Activation Date.


Corporate / Companies which issue any kind of security are known as 'Issuer' in the depository system. Only those securities, which are admitted into the CDSL system are available for dematerialization to the holders of such securities or can be allotted in electronic record form by the issuer. Securities include shares, debentures, bonds, commercial paper (C.P.), and certificate of deposits (C.D.), pass through certificates (PTCs), government securities and mutual fund units. Both listed and unlisted securities can be admitted into the CDSL system. CDSL functions as the central accounting and record keeping office in respect of the securities admitted by issuer companies.

It is mandatory for all listed companies to have their securities admitted for dematerialization with both the depositories viz CDSL & NSDL. It is however desirable that all securities are admitted on both the depositories so that investors having account with any of the depositories can acquire that security.

Before the admission of any security into the CDSL system, it is necessary for the issuer to establish an electronic connectivity with CDSL either directly or through a registrar and transfer agent (RTA), who has already established connectivity with CDSL. All leading RTAs have already established electronic connectivity with CDSL. The procedure and CDSL charges to obtain direct connectivity by an issuer are similar to that as for a RTA. It may please be noted that SEBI, vide its circular dated 27-12-2002, has advised issuers that "all the work related to share registry in terms of both physical and electronic should be maintained at a single point i.e. either in-house by the company or by a SEBI registered R & T Agent".

At CDSL, data is centrally stored with state-of-the-art systems and having a 'Disaster Recovery Site' facility as back up. The centralized database architecture of CDSL

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places it in a unique position to provide issuers up-to-the-moment details of holdings of the security.


Dematerialization of securities with CDSL offers numerous benefits to the issuer of securities. Some of the benefits are:

In the demat form transfer of securities takes place at CDSL and if the entire issue of a security is held in demat form, the issuer can save considerable time and money being incurred on its share department.

Dematted securities are not subject to loss, theft, mutilation or misuse by faking or forging certificates, thereby saving companies from lengthy correspondence, litigation and complaint handling. It will therefore eliminate instances of bad delivery.

All non-cash corporate actions such as rights, bonus, mergers, consolidations, subdivision of holdings, conversion of securities, issuing securities on mergers/amalgamations and in initial public offerings (IPO) can be handled in demat form without any hassles in the shortest possible time and at very low cost.

With the CDSL's centralized database, the issuer can get up to-the-moment information on any changes in its holding pattern of a security. Thus, the company effectively monitors the change in holding and is alert to any undue threat.


In order to admit its securities into CDSL a company should first establish electronic connectivity with CDSL. The company can establish a direct in house electronic connectivity with CDSL or by utilising the services of a registrar and transfer agent, connected to CDSL


Procedure for admission of equity shares into CDSL

1. The company should forward certified true copies of the following documents to CDSL along with the master creation form and a demand draft favouring “Central Depository Services (India) Limited” towards annual charges through their RTA :

Annual Report for the last 3 years Board Resolution for admission of securities into CDSL

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Memorandum & Articles of Association Draft Offer Document, in case of IPO Background/Profile of the Company in brief Management / Promoter profile Date of Incorporation / IPO / Rights Issue Secretarial Audit Report Capital confirmation/listing/in-principle approvals for listing from all the

Stock Exchanges where the security is listed/proposed to be listed Court order along with the scheme for Merger / de-merger /

Amalgamation (if any) Dividend history for the last 3 years (including the current year) Name of Registrar (for electronic & physical connectivity) Name of the Group Companies (if any) Brief write up about the Group Companies

In case of admission of equity shares of an unlisted company (indemnity-cum-undertaking on Rs.200/- non judicial stamp paper) / private limited company (indemnity-cum-undertaking on Rs.200/- non judicial stamp paper) in the prescribed format

1. Once the company submits all the documents, the details of the company are evaluated internally at CDSL and referred to a Securities Committee for consideration.

2. The committee admits or rejects the admission of the securities of the Company into CDSL.

3. If approved, the tri-partite or bi-partite agreement is executed4. The securities of the company are thereafter made live in CDSL.


Procedure for admission of debt instruments into CDSL1. If the company's equity is already admitted with CDSL the issuer should

Forward the Master Creation Form for debentures/bonds duly completed and letter of extension/offer letter on Rs.100/- non judicial stamp paper.

On receipt of the offer letter, the ISIN number will be allotted and the debentures/bonds will be made live on the CDSL system.

2. If the company's equity is not admitted with CDSL Forward the documents as mentioned for admission of equity shares Appoint a Registrar (RTA) connected to CDSL The Master Creation Form (MCF) for debentures/bonds duly completed

by the company should be forwarded to CDSL.

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Once all the documents are submitted by the company, the details of the company are evaluated internally at CDSL and referred to a Securities Committee for consideration.

The committee admits or rejects the admission of the securities of the Company into CDSL.

On approval, the tri-partite or bi-partite agreement is executed The debentures/bonds of the company are thereafter made live in CDSL.


Procedure for admission of Commercial Paper (C.P) / Certificate of Deposit (C.D)/ Pass through Certificate (PTC) into CDSL

1. If the company's equity is already admitted with CDSL Forward the Master Creation Form for Commercial Paper / Certificate of

Deposit / Pass through Certificate duly completed and letter of extension /offer letter on Rs.100/- non judicial stamp paper. In case of PTCs certified copy of board resolution indicating allotment of PTCs or Trust Deed is also to be submitted.

On receipt of the offer letter, the ISIN number will be allotted and the CP/CD/PTC will be made live on the CDSL system.

2. If the company's equity is not admitted with CDSL

Forward the documents as mentioned for admission of equity shares Appoint a Registrar (RTA) connected to CDSL. The Master Creation Form (MCF) for CP/CD/PTC duly completed by the

company should be forwarded to CDSL. Once all the documents are submitted by the company, the details of the

company are evaluated internally at CDSL and the tri-partite or bi-partite agreement is executed

The security is thereafter made live in CDSL.

3. Clearing Members:

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Clearing Members (CMs) are the members of the Clearing Houses/Clearing Corporations who facilitate settlement of trades done on stock exchanges. They could be a broker or custodian registered with SEBI as such is an important intermediary in the capital market and an essential link in the depository system. The various categories of CMs are:

Trading Members Custodians Subsidiary companies formed by regional stock exchanges to facilitate their

members to trade on BSE/NSE.

While beneficial owners may have their demat accounts on any of both the depositories it is mandatory on the part of CM to have a demat CM account with both the depositories in terms of SEBI press release ref. no. PR 153/99 dated July9, 1999.CM's main activity is to facilitate pay-in/pay-out of securities to/from Stock Exchanges/Clearing House/Clearing Corporations either on their own behalf or on behalf of their clients. The securities which are due for delivery can be delivered directly from client's account (depending on whether exchange provides this facility) or through CMs to the Stock Exchanges/Clearing House/Clearing Corporations Account. Similarly, pay-out of securities can be delivered directly to client's account on the basis of information given to Clearing House by the CMs or to CMs A/c.Compulsory settlement of trades in demat, introduction of 'T+2' rolling settlement, higher volume of securities traded daily requires monitoring of CMs demat account on continuous basis. In order to facilitate smooth functioning for CMs CDSL has introduced a special Depository Participant Type i.e. CM DP. Members of the Stock Exchange, Mumbai and Calcutta Stock Exchange who have participated in the equity of CDSL can register as CM DP at concessional rate of deposit.

A CDSL CM DP can derive the following benefits:

He can continuously monitor the deliveries received for pay-in or from pay-out, their movement and subsequent reconciliation of trade settlements very easily.Can subsequently reduce cost of his operations for himself as well as for his clients.

By offering one stop services to clients both in respect of trading and depository services, not only he increases his business but can effectively monitor client a/c position and insulate from failure in settlement.


Client Level Pay-inCDSL system provides a facility wherein pay-in of securities can be done directly from the client's account. This facilitates faster settlement of trades as well as quick reconciliation.

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Minimal Instruction

At CDSL, a CM is not required to give Inter Settlement Instructions. This facilitates settlement of trades with minimal instructions. There is also no need for a member to arrange for various instructions for transfer of securities from one settlement to another. This reduces the transaction cost, time and efforts of the CM.

Lower Transaction Cost

CDSL settlement fee for its DPs being very competitive saves on transaction cost when a CM settles all his transactions through CDSL system.

No custody Fee

CDSL does not collect any custody fees from depository participant for holding the securities in the electronic form. Thus, further reduces the cost of DP operations.



For Settlement of securities for BSE trades a CM has to open following accounts with any DP of CDSL.

CM Principal Account (Pay-in Account) CM Unified Settlement Account (Pay-out Account)

Pay-in:Procedure for BSE Pay-in is as follows Arrange for transfer of securities from Client Account to CM Principal Account

before the scheduled pay-in time. Alternatively Pay-in can be done from client account directly through On

Market Instruction. If a CM has opted for Auto Pay-in the securities available in the CM Principal

A/C would be considered for Pay-in. A member need not give any inter settlement/delivery out instruction.

If a CM has not opted for Auto Pay-in the securities have to be transferred from CM Principal A/c through On Market Instruction.

At the scheduled pay-in time the securities transferred through Auto Pay-in/On Market Instructions from CM Principal A/c/ On market Instruction from Client A/c would be earmarked for Pay-in.

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Auto Pay-in

In order to avail Auto Pay-in facility a CM has to provide instruction to the CH in format specified by the CH. Members who have opted for Auto Pay-in need not give On Market Instructions from CM Principal A/c for any settlement.

Early Pay-in:

The procedure for early pay-in is as follows:

The BO and/or the CM who wishes to do early pay-in, shall fill in the Early Pay-in Instruction slip and deliver the same to his DP

The securities for early pay-in can be delivered from the CM Clearing a/c, CM Principal a/c and the BO a/c only.

It is mandatory for CMs/BOs to mention settlement number in the Early Pay-in Instruction Slip. Thus through Early Pay-in Facility CMs can perform Settlement wise pay-in.

The BO or the CM can do early pay-in from the day of trading upto one day prior to the pay-in day.

As of now, the early-in facility is permitted for A/c Period/weekly and Rolling type of settlements only. In case the early pay-in facility is used for other type of settlements, the benefits of early pay-in will not be made available to the CM's. However the securities delivered to the designated early pay-in a/c will be picked up by the CH/CC for pay-in.

The securities already delivered as early pay-in would be first utilised for satisfying the net obligations of the CM and thereafter the pay-in of securities would be carried out.

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Name……………………. age……………………Occupation……………………………Address…………

1. Do you know JSEL SECURITIES?Completely unaware have heard about them aware

2. Where would you like to invest?Fixed deposits share market propertyJewellery insurance

3. Which company of the share market are you aware of?JSEL Securities religare indiabulls Anand rathi others

4. Do you invest in share market?Yes no

5. In which brokerage house you have your demat account?JSEL Securities religare indiabullsAnand rathi others

6. How often do you trade?

Daily Weekly monthlySometimes

7. What is the brokerage charged (intraday) by your company?

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.10-.25 >.25 >.50>.75

8. Which of these products apart from equity your company is providing?

Insurance investment advisory mutual fundP.M.S Trading all of above

9. Are your company provide online back office facility?

Yes no

10. Does your company provide online trading?Yes no

11. Are there any charges for this facility?

Yes no

12. What ranks would you give to these companies as per their services?

JSEL Securities……………..Religare……….Indiabulls……………Anandbulls…………..Others………………

13. What do you expect from JSEL Securities?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

14. Any suggestions?……………………………………………………………………………………………………………………………………..

15. Any references?a)…………..b)……………….

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Q1.Do you know about JSEL Securities?

Completely unaware 14%Have heard about them 36%Aware 50%

Q2.Where would you live?

Fixed deposits 21Share market 44Property 11Jewellery 12Insurance 18

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Financial services

Q3.Which company of the share market are you aware of?

JSEL Securities 38Religare 30Indiabulls 27Anand rathi 28Others 31

Q4.Do you invest in share market?

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Yes 51.77%No 15.23%

Q5.In which brokerage house you have your demat account?

Angel broking 24%Religare 21%Indiabulls 17%Anand rathi 17%Others 21%

Q6.How often do you trade?

Daily 33%Weekly 25%Monthly 8%Sometimes 34%

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Q7.What is the brokerage charged (Intraday) by your company?

.10-.25 40.75%>.25 17%>.50 6%>.75 2%

Q8.Which of these products apart from equity your company is providing?

Insurance 10Investment advisory 15Mutual fund 17P.M.S 3Trading 17All of above 32

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Q9.Does your company provides online trading?

Yes 89%No 11%

Q10.Are there any charges for online trading facility?

Yes 41%No 59%

Q11.What ranks would you give to these companies as per their services?

Angel broking 14Religare 11Indiabulls 10Anand rathi 12Others 12

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1. The regional stock exchanges other than the big two, NSE and BSE have not adjusted to profound changes in the environment. Like the once visible brokers and intermediaries their fate is scaled. Indian in news for two reasons both have to do with the paucity of business.

2. Apart from BSE and NSE, the regional stock exchanges are getting marginalized by the day due to global developments. But what really aggravated the problem had been the extension of terminals of the two exchanges in any part with a sustained competitive advantage.

3. The analysis indicates attractive destination for equity investors. New Government reforms and aggressive foreign investment activities have minimized the uncertainty and nervousness over the scale.

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1. To train the manpower adequately and efficiently to raise and generate the De-mats accounts.

2. It also recommended opening few more branches in and at outskirts to jaipur and in different locations in Rajasthan for fetching out more business.

3. It is strongly recommended to adhere to best quality service to be avail to its customers for more accessing to productive and lucrative opportunities.

4. To trap the wide market of India, the firm needs to develop an awareness program to educate the people at large about the hassle free investment in securities.

5. The stock exchange should establish department of research and analysis in order to determine the price movements of Sensex and also able to monitor the operations of the sub members.

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1. Significantly I found that JSEL Securities is a company where an investor or client can put his/her money with safe and without or little risk. People are more reluctant to make investment in securities and shares as this is a highly speculative game to be dealt and played with utmost safety. This all handled with care by JSEL which made it a leading financial services provider.

2. The overall analysis signals strong superlative strong superlative Bull Run. The reasons could be investment by foreign investor in Indian economy, speedy reform process, and emergence of global markets.The markets are likely to be volatile over the short run because of rise in crude oil prices and selling’s by foreign investors to book profits. Since stock markets operate in macro economic environment it is therefore essential that the environment must be enabling to realize its full potential.

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Annual report of JAIPUR STOCK EXCHANKGE LIMITED Reports and magazines Times of India Newspaper

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