FAQ

A depository holds securities (like shares, debentures, bonds, Government Securities, units, etc.) of investors in electronic form. Besides holding securities, a depository also provides services related to transactions in securities.

A depository interfaces with the investors through its agents called Depository Participants (DPs). If an investor wants to avail the services offered by the depository, the investor has to open an account with a DP.

The benefits of participation in a depository are:

• Immediate transfer of securities;
• No stamp duty on transfer of securities;
• Elimination of risks associated with physical certificates such as bad delivery, fake securities, etc.;
• Reduction in paperwork involved in transfer of securities;
• Reduction in transaction cost;
• Nomination facility;
• Change in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately;
• Transmission of securities is done by DP eliminating correspondence with companies;
• Convenient method of consolidation of folios/accounts;
• Holding investments in equity, debt instruments and Government Securities in a single account;
• Automatic credit into Demat account, of shares, arises out of split/consolidation/merger, etc.

NSDL & CDSL offers following facilities: –

• Dematerialization i.e., converting physical certificates to electronic form;
• Rematerialisation i.e., conversion of securities in Demat form into physical certificates;
• Facilitating repurchase / redemption of units of mutual funds;
• Electronic settlement of trades in stock exchanges connected to NSDL & CDSL;
• Pledging/hypothecation of dematerialized securities against loan;
• Electronic credit of securities allotted in public issues, rights issue;
• Receipt of non-cash corporate benefits such as bonus, in electronic form;
• Freezing of Demat accounts, so that the debits from the account are not permitted;
• Nomination facility for Demat accounts;
• Services related to change of address;
• Effecting transmission of securities;
• Instructions to your DP over Internet through SPEED-e & Easi-est facility;
• Account monitoring facility over Internet for clearing members through SPEED & Easi facility;
• CDSL offers SMS alert facility for debit transaction
• Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.

NSDL & CDSL provides its services to investors through its agents called Depository Participants (DPs). These agents are appointed by NSDL with the approval of SEBI. According to SEBI regulations, amongst others, three categories of entities i.e. Banks, Financial Institutions and Members of Stock Exchanges [brokers] registered with SEBI can become DPs.

You can approach any DP of your choice and fill up an account opening form. At the time of opening an account, you have to sign an agreement with the DP in a NSDL prescribed standard agreement, which details your and your DP’s rights and duties. You have to submit the account opening form along with the documents as mentioned in the account opening form.

You must remember to take original documents to the DP for verification. Your DP will carry-out “in-person verification” of account holder(s) at the time of opening your account. You should remember to obtain a copy of the agreement and schedule of charges for your future reference.

Yes, You can open more than one Demat account in identical names. There is no restriction on the number of Demat accounts you can open with the same/other DPs.

Yes, a depository account can be opened in the names of four holders but the account can be operated only for dematerialization of shares held in the same combination. No shares can be credited by purchase or transferred from any other account. Hence the standing instruction for credits will be ‘N’ for such accounts

No. The Demat account must be opened in the same ownership pattern in which the securities are held in the physical form. e. g. if one share certificate is in your individual name and another certificate is jointly held in your and your wife’s name, two different accounts would have to be opened.

In this case you may open only one account with A and B as the account holders and lodge the security certificates with different order of names for dematerialization in the same account. You will fill-up an additional form called ” Transposition cum Demat” form. This would help you to effect change in the order of names as well as dematerialize the securities.

Yes. If you authorize any person to operate your account by executing a power of attorney and submit it to your DP, that person can operate the account on your behalf.

Yes. You can change your address and bank details in your Demat account, you must ensure that any subsequent change in address and bank detail is informed to your Depository Participant.

This is a instruction if opted for allows you to receive credits automatically in your Demat account.

No. Names of the accountholders for a depository account cannot be changed. If you want to change name or add / delete an accountholder, you need to open a new account in the desired holding pattern (names) and transfer the securities to the newly opened account. The old account may be closed.

The name of the corporate Demat account can be changed and the account can be continued.

No, it is not mandatory to give nomination but a declaration that the holder do not wish to make a nomination has to be provided.

The nomination form duly filled-in should be submitted either at the time of account opening or later. The account holder, nominee and two witnesses must sign this form and the name, address and photograph of the nominee must be submitted.

Only one person can be nominated irrespective of the fact whether the Demat account is held singly/jointly.

Non-individuals including societies, trusts, body corporates, partnership firms, Kartas of Hindu Undivided Family, minor, holders of power of attorney cannot avail of nomination.

Yes, NRI can nominate directly. But, the power of attorney holder cannot nominate on behalf of NRI.

Yes, a minor can be a nominee. In such a case, the guardian will sign on behalf of the nominee and in addition to the name and photograph of the nominee, the name, address and the photograph of the guardian must be submitted to the DP.

Yes, the nomination can be changed anytime by the account holder/s by simply filling up the nomination form once again and submitting it to the DP.

Dematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited in the investor’s account with its DP. In order to dematerialize certificates; an investor will have to first open an account with a DP and then request for the dematerialization of certificates by filling up a dematerialization request form [DRF], which is available with the DP and submitting the same along with the physical certificates. The investor has to ensure that before the certificates are handed over to the DP for Demat, they are defaced by marking “Surrendered for Dematerialization” on the face of the certificates.

You can dematerialize only those certificates that are already registered in your
name and are in the list of securities admitted for dematerialization at NSDL.
All the scrips included in S&P, CNX, NIFTY and BSE SENSEX have already joined NSDL. This list has more than 7,000 companies and is steadily growing. You can get an updated list of these companies from your DP or from NSDL website at www.nsdl.co.in.

Yes, pending demat requests (more than 60 days) can be cancelled by filling Annexure – A

Before defacing the share certificate, you must ensure that it is available for
dematerialization. You must therefore check with your Depository Participant
(DP) whether the ISIN (code number for the security in a depository system) has been activated and made available for dematerialization by the depository. If yes, then you may deface the share certificate. The certificates are defaced by marking “Surrendered for Dematerialization” on the face of the certificate.

Dematerialization will normally take about 15 to 30 days.

Yes. If you wish to get back your securities in physical form, all you have to do is to request your DP for Rematerialisation of the same. ‘Rematerialisation’ is the term used for converting electronic holdings back into certificates. Your DP will forward your request to NSDL, after verifying that you have the necessary balance. NSDL in turn will intimate the registrar who will print the certificates and dispatch the same to you.

The concerned company obtains the details of beneficiary holders and their holdings from NSDL. The payment to the investors will be made by the company through the ECS (Electronic Clearing Service) facility or by issuing warrants on which your bank account details are printed. The bank account details will be those which you would have mentioned in your account opening form or changed thereafter.

The concerned company obtains the details of beneficiary holders and their holdings from NSDL. Your entitlement will be credited by the company directly in your NSDL depository account.

The procedure is as follows:

Both you (pledger) as well as the lender (pledgee) must have depository accounts;

You have to initiate the pledge by submitting to your DP the details of the securities to be pledged in a standard format;

The pledgee has to confirm the request through its DP. It is suggested that after creation of the pledge request, you may inform the pledgee and request him to confirm the request;

Once this is done, your securities are pledged All financial transactions between the pledger and the pledgee are handled as per usual practice outside the depository system.

After you have repaid your loan, you can request for a closure of pledge by instructing your DP in a prescribed format. The pledgee on receiving the repayment will instruct its DP accordingly for the closure of the pledge.

The pledger will receive the dividend and bonus shares if any declared on the pledged securities.

Your DP will give you a Transaction Statement periodically, which will detail your current balances and the various transactions you have done through the depository account. If you so desire, Transaction Statement can be obtained at intervals shorter than the stipulated ones, probably at a cost.

You will receive a Transaction Statement every month if you have done any transaction or once in a quarter if there is no transaction during the period.

In case of any discrepancy in the transaction statement, you can contact your DP. If the discrepancy cannot be resolved at the DP level, you should approach NSDL.

No transaction can be effected in your account without your written authorization. Further, if you are away for a long time, you have the facility of freezing your account wherein only credits into your account will be allowed and no debit will be possible.

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 rematerialize the securities.

The data carries a high importance in the NSDL depository system. NSDL has taken necessary steps to protect the transmission and storage of data. The data is protected from unauthorized access, manipulation and destruction. The following back up practices are adopted to protect the data:

• Local Back up
• Remote Back up

In addition to this, every DP is required to take daily back up, at the end of day’s operation.

NSDL system provides the facility to freeze the depository accounts for any debits or for both, debits and credits. In an account which is “freezed for debits”, no debits will be permitted from the account, till the time it is unfreezed.

Apart from transaction statement, NSDL has launched SMS Alert facility for demat account holders whereby investors can receive alerts for debits (transfers) to their demat accounts, credits for IPO and offer for sale allotment, sub-division and bonus.

CDSL’s internet based facility easiest (electronic access to securities information and execution of secured transactions) , permits CMs of BOs to submit off-market,on-market, inter-depository and early pay-in debit instructions from their demat account. Moreover, all the facilities and benefits of easi are automatically made available to a subscriber of easiest.

There are two types of account transfers available on easiest:

Trusted account – Transfers : permits transfer of securities from a BO account to the settlement accounts of any 4 CMs in CDSL, which have been pre-notified by the BO.

Account of choice – Transfers : permits transfer of securities from a BO account to any other demat account including the CM settlement accounts. All the on-market, off-market, early-payin and interdepository transactions are authenticated by means of a digital signature, which is provided by CDSL at an additional cost. CMs would be able to register for the account of choice option only for submitting transactions on easiest.

Easiest , not only provides all the benefits of easi, but also gives a BO/CM the convenience of executing debit/credit instructions from their demat account, over the internet, anytime anywhere.

No. A BO/CM who submits instruction(s) through easiest need not give any instruction slip(s) to their DP.

Yes, you can by selecting the option ‘Upgrade BO ID to easiest’, in your easi account login. However you may have to check with your DP if they have subscribed for the easiest facility.

Yes. The easiest upload facility enables a CM/BO to submit multiple transactions in a single file.

All BOs or CMs who have opted for the account of choice login only, in easiest can avail of this facility. A BO or CM would have to approach their DP to have their upload rights activated.

Yes, you can monitor corporate announcements for the securities held in your demat account through your easiest login. You can also add ISINs not held in your demat account, but wish to monitor corporate announcements for such ISINs.

• There are two types of account transfers available on easiest:
• Login to CDSL’s website www.cdslindia.com and click on the link “Register Online” from the homepage.
• Select the facility (easi/easiest) you wish to register for.
• Enter your details like Login–Id, Email-Id, etc.
• Print the registration form.
• Submit the registration form to your DP duly signed by all the account holders.
• You will receive the password at your email-Id.

You can commence using easi/easiest by entering your ‘User name’ and ‘Password’ at the homepage of CDSL’s site www.cdslindia.com. Register now for easiest at www.cdslindia.com and experience the convenience of demat at your fingertips.

Yes. Delivery instructions can be given over internet through SPEED-e. The account holder has to first register for the Speed-e facility.

You can submit delivery instructions electronically, on the SPEED-e & Easi-est website https://www.speed-e.nsdl.com & , after your DP has authorized you to operate your account through the SPEED-e facility. You can monitor the status of such delivery instructions to ensure that the instructions have been executed.

The benefit offered by SPEED-e to a Demat account holder / Clearing Member is the convenience of conducting Demat account transactions using an Internet
connection from anywhere at anytime eliminating paperwork. Time and efforts for
obtaining delivery instruction forms from your DP and submitting them to the DP
every time you sell securities is saved.

For using the SPEED-e facility it is essential that your DP must be registered with NSDL for this facility. There are two types of users for this facility, one is password based user who logs in with his password and can transfer securities only to three pre-specified broker accounts of his choice. The second is the smart-card based user who is issued a smart card for logging on to the site and can transfer the securities to any account. A password user can visit the SPEED-e website, fill-up the registration form available on the website. The website would allot a registration number an lient would authorize him for using the facility upon submission of a request with the registration number.

A smart card user can download the form from the website, fill it and submit the same to its DP. The DP will process the form and enable the client for using the facility. The smart card user will also be issued a smart card reader and a smart card.

Smart card based access to SPEED-e is more secure as your identification is based both on “What you have i.e. smart card” and “what you know i.e. PIN code” and provides a digital signature to identify you. In the case of password based access , you should handle your password carefully. In view of this security difference, the password based users have been permitted to transfer securities through SPEED-e facility to only three pre-specified broker accounts. Thesethree accounts can be changed by the user.

Following are the additional benefits of smart card option in SPEED-e facility :

• smart card user can transfer securities to any account unlike password users where transfer of securities is permitted only to three pre-notified broker accounts;
• single smart card can be used to access all your Demat accounts, opened with the same DP;
• facility of multiple authorization;

You can freeze your Demat account or any particular ISIN or specific quantity within an ISIN yourself, through SPEED-e. The account freezed using SPEED-e can be unfreezed only by you.

Thereby you can deliver instructions and transfer securities when you wish, lock the account and unlock it only when you need, i.e. complete control of your account in your hands.

For password based operation, only one user can operate the account. Joint holders will have to give a power of attorney to one joint holder among themselves. For smart card based operation, in addition to what is stated above, all the joint holders can operate the account independently or jointly using multiple authorization facility

If you are Client using SPEED-e/IDEAS, log-on to SPEED-e website, submit your User-Id, click on ‘Forgot Password’ and fill-up an online ‘ Password Reset Request’ form by supplying the new Password, Client Id & other personal details. A print-out of this form has to be given to your DP which will then authorize the Password Reset Request.

If you are a Clearing Member using IDEAS, log-on to SPEED-e website, submit your User-Id, click on ‘Forgot Password’ and fill-up an online ‘ Password Reset Request’ form by supplying the new Password & CM BP Id. A print-out of this form has to be given to NSDL which will then authorize the Password Reset Request.

The procedure for selling dematerialized securities is very simple. After you have sold the securities, you would instruct your DP to debit your account with the number of securities sold by you and credit your broker’s clearing account. This delivery instruction has to be given to your DP using the delivery instruction slips given to you by your DP at the time of opening the account. Procedure for selling securities is given here below:

• You sell securities in any of the stock exchanges linked to NSDL through a broker;
• You give instruction to your DP to debit your account and credit the broker’s [clearing member pool] account;
• Before the pay-in day, your broker gives instruction to its DP for delivery to Clearing Corporation;
• Your broker receives payment from the stock exchange [clearing corporation];
• You receive payment from the broker for the sale of securities.

Any trade settled through a clearing corporation is termed as a ‘Market Trade’. These trades are done through stock brokers on a stock exchange. ‘Off Market Trade’ is one which is settled directly between two parties without the involvement of clearing corporation. The same delivery instruction slip can be used either for market trade or off-market trade by ticking one of the two options.

On every stock exchange, various settlements are effected every day such as daily settlement, auction settlement, etc. Each of these settlements is identified by combination of a market type and a settlement number. You are required to mention the appropriate settlement details on the delivery instruction slip while transferring the shares to your broker’s account. These settlement details are available on the contract note issued by the broker.

With effect from 1st April,2003 SEBI has mandated a T+2 settlement cycle i.e. a trade executed on the floor of the exchange on Day T will have to be settled on Day T+2.

Any transaction between two clients not having Demat accounts with the same depository (NSDL/CDSL) is termed as an ‘Inter Depository’ transaction.

The following precautions are to be taken: –

• Ensure and insist with your DP to issue DIS book; do not accept loose slips.
• Ensure that DIS numbers are pre-printed and DP takes acknowledgment from you for the DIS booklet issued to you.
• Ensure that your account number [client id] is pre-stamped.
• If your account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed.
• Avoid using loose slips
• Do not leave signed blank DIS with anyone viz. broker/sub-broker.
• Keep the DIS book under lock and key when not in use.
• If only one entry is made in the DIS , strike out remaining space to prevent misuse by any one.
• Please fill in target account -Id and all details in the DIS, yourself.

Execution date is the date on which securities will be actually debited from your account. The execution date written on the delivery instruction has to be entered by the DP, in the DPM system [computer]. DPM system will record the date and will debit your account only on that date. This facility is called future execution date facility.

By giving a future dated instruction the risk of non-execution of instruction due to lack of time or last minute rush is covered.

In case the securities bought by you are yet to be transferred into your account by your broker before the book closure / record date, you will not be entitled to receive corporate benefits such as dividend or bonus since your name will not figure in the list of beneficial owners. Hence, you must ensure that securities bought by you are transferred into your account before the book closure / record date announced by the company.