CDSL India

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• Welcome!!

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• CDSL India
• Yogesh Kundnani (yogeshk_at_cdslindia.com)
• Amit Krishnan (amitk_at_cdslindia.com)

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CDSLs Major Stakeholders
Sr. No. Name of shareholders terms to total equity
1 Bombay Stock Exchange Limited 36.60
2 State Bank Of India 9.57
3 Bank Of Baroda 9.57
4 Bank Of India 9.57
5 HDFC Bank Limited 14.36
6 Standard Chartered Bank 7.18
7 Other Leading Banks 13.15
 TOTAL 100.00
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CDSL Today

• BO accounts 5.67 mn
• DPs registered 475
• Issuer Companies admitted 6,255
• Securities under custody
• Volume 70.08 bn
• Value USD 137.02 bn

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Depository Structure
Clearing Corporation
Issuer / Registrar
Depository
Clearing Members
DP
DP
DP
DP
DP
DP
DP
DP
B e n e f i c i a l O w n e r s
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Depository Role
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• What a depository does
• Records ownership of securities in electronic
  form
• Records transfer of securities
• Facilitates Pledge/Lock-in/Freezing of securities
  
• Updates records when fresh securities are issued
  or existing securities are extinguished in case
  of buy-back
• Makes available up-to-date list of Investors
  (BOs) for corporate actions

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Legal Framework
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Legal framework

• The Depositories Act, 1996
• Investor has the option to hold securities in
  Paper mode or Electronic mode
• Depository will be the Registered Owner of the
  securities in the ROM
• Rights, Liabilities and Benefits are with
  Shareholders ( who will be the beneficial
  owners of the securities )

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Legal Framework

• Depository to have net worth of Rs. 1 bn.
• Investor holdings in the depository cannot be
  attached except for orders from competent
  authorities
• Mandatory indemnification against negligence

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Legal Framework

• SEBI (Depository Participant) Regulations
• Criteria for setting up of a Depository and for
  becoming a Depository Participant
• Depositorys Bye-Laws
• Every depository to frame detailed Bye-Laws and
  procedures for its operations
• All participants will enter into agreement to
  follow the rules and regulations

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Type of DPs

• Public Financial Institution
• Bank under RBI act.
• Foreign Bank with RBI approval
• State Financial Corporation
• Custodian
• Clearing Corporation or Clearing House of Stock
  Exchange
• Stock Broker (CM)
• Non Banking Finance Company (NBFC)
• Registrar Transfer Agent

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Securities admitted

• Equity shares
• Preference shares
• Debentures and bonds
• Commercial papers
• Certificates of deposits
• Government securities
• Exchange traded funds
• Pass through certificates
• Warehouse receipts (Commodities)

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Type of accounts

• Individual
• Clearing Member
• Corporate
• FII
• Bank
• Mutual Fund

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Background of structure

• India is a vast country with large number of
  investors
• Accounts are opened and maintained by DPs
• Provide impetus to dematerialisation
• BO level holdings are maintained as compared to
  nominee level holding
• Physical structure is replicated in demat

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Background of structure

• Switchover from physical trading to demat trades
  phase wise
• Demat initially made mandatory for institutional
  investors
• Subsequently, made mandatory for retail investors

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Merits of structure

• Vast distribution network of DPs utilised
  effectively
• Competition amongst DPs
• Ensures availability of depository services all
  across the country
• Benefits of depository availed by all types of
  investors
• Ensures superior service quality
• Cost benefits

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Benefits to Investors
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• Security-related benefits to Investors in the
  depository system
• Offers safety and convenience compared to holding
  securities in physical form
• Enhances liquidity by instantaneous transfers
• Operational risk minimised
• Settlement cycle reduced from weekly settlement
  to T2

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• Other benefits to Investors in the depository
  system
• Change of name, address, Power of Attorney,
  deletion of deceaseds name - can be done across
  companies by one single instruction to DP
• Each share is a market lot for the purpose of
  transaction - so no odd lot problem
• Any number of securities can be
  transferred/delivered with one delivery order.
  Therefore, paperwork and signing of multiple
  transfer forms is done away with
• No stamp duty on transfer of securities

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Risk Mitigation Measures
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• Internet based services easi and easiest
• SMS Alerts (SMART)
• Dormant account monitoring
• Concurrent and Internal audit of DP operations
• Stringent networth requirements for DPs

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easi (electronic access to securities
information)

• Statement of Holding of Securities in CDSL Demat
  Account
• Last 7 days transactions report for any ISIN
• Know rate and valuation of holdings
• Balances are updated after every 15 minutes from
  main system
• Information about DPs, Issuers RTAs
• Printing and downloading of Statement of Holding

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easiest (electronic access to securities
information execution of secure transactions)

• Issue of
• On-Market
• Early Pay-in
• Off-Market
• Inter-Depository
• instructions through internet

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• Some recent innovations
• SMART SMS Alerts to registered accountholders
  for all debits and for credits arising from
  corporate actions and IPOs
• Information about corporate announcements to
  registered users of easi

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• Thank You!!

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