NSDL(National Security Depository Limited), set up as the first depository company in the country, has been sponsored by the unit trust of India NSE, State Bank of India, HDFC Bank and City Bank; as a public limited Company, it is managed by the board of Direction. Its by-laws govern it, and business operations are regulated by its business rules.
National Security Depository Limited
NSDL(National Security Depository Limited) ponds are various, seemed to investors and other participants in the capital market. These can be categorized as:-
- Basic services
- Value added services
- Other activities
1. Basic services
These include basic facilities like account maintenance, dematerialization, rematerialization, trade settlement through market transfer, off-market transfer & enter-depository transfer, distribution of non-cash cooperate actions and nomination transmission.
A) Account Maintenance
The depository system links the issues of depository participations (PDS), NSDL and clearing corporation/clearing house of stock exchanges, facilities holding securities in dematerialized form and effect transfers using account transfers. This system facilitates scripter treading and offers various direct and indirect services to the market participant’s account maintenance.
- Beneficiary account
- Clearing member account
- Intermediary account
B) Dematerialization
Dematerialized is how a customer can get bodily certificates converted into electronic balances.
- An investor intending to dematerialize its securities desires an account with a DP.
- The consumer has to deface and surrender the certificates, resisted in its call to the DP.
- After initiating NSDL electronically, the DP sends the securities to the worried issuer/R&T agent.
- If the problem/R&T agent finds the certification in order, its registers NSDL as the holder of the securities and speaks to NSDL about the affirmation of request electronically.
- On receiving such affirmation, NSDL credits them securely in the depository account of the investor with the DP.
2. Rematerialization
It is the process by which a client can get her electronic holding converted into physical certificates.
3. Pledge/Hypothecation
Securities held in a depository account -can be pledged. Hypothecated to avoid loan facility pledge of securities in NSDL depository requires that each the borrower and the lender show have an account in NSDL depository.
4. Off-Market Transfer
A. Transmission
One of the lesser-known by widely experienced problems concerning share certificates is the transmission of shares. The company’s Act distinguishes the transmission of shares from the transfer of shares. At the same time, the transfer of shares relates to a voluntary act of the shareholder, transmission brought about by the operation of law. The word ‘transmission means devaluation by death, succession, inheritance, bank entry, marriage etc.
B. Value-Added Services
- Automatic Delivery Out Insertions
- Dividend Distribution
- Public Issues
- Dematerialization and Settlement of warehouse Receipts.