Professional Documents
Culture Documents
Sai Surya Teja Maddikonda
Sai Surya Teja Maddikonda
What is a Depository?
Necessity of a Depository
Services offered by Depository
Depository Participant
Depository System: How it works
Benefits of Depository System
What are the costs involved?
A depository can be defined as an institution where the investors can
keep their financial assets such as equities, bonds, mutual fund units
etc in the dematerialised form and transactions could be effected on
it.
Examples:
Bad deliveries
Fake certificates
Loss of certificates in transit
Mutilation of certificates
Delays in transfer
Long settlement cycles
Mismatch of signatures
Delay in refund and remission of dividend etc
Through a system of paperless securities, depositories have made
the going easier to other institutions as well such as Stock
Exchanges and its clearing houses, stock broking firms, equity
issuing companies, share transfer agents etc.
Examples:
Payment or receipt of shares towards his transactions via Stock
Exchanges,.
Receipt of bonus or right shares from the corporates in which
he/she is a share holder.
Registering of share transfer.
Dematerialisation etc.
A depository system carries out its activities through various
associates that include depository participants (DP), issuing
companies and their share transfer agents, clearing corporation of
Stock Exchanges etc.
The Depository charges the Depository participant only for the debit
transactions.