3 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET ABSTRACT Depository system is concerned with conversion from physieal 10 eleetronie form, settlement of trades in electronic segment, transfer of ownership and cle tonic custody Depository Lid. (NSDL) is the country’s first depository which provides electronic depository facilities for securities traded in the equity and debt markets. NSDL has established strict system and procedures and data level and machine level backups to ensure safety of investor hokding NSDL and its of security, National Secur business partner use hardware, software and communication systems, which conform to industry standard, After that Central Depository Services (India) Limited (CDSL) is established in 1999 which ficilitates book entry transfer of securities, The Depository Act, 1996 defines depository as, an organization where the securities ofa shareholder are held in the form of electronic accounts in the same way as a bank holds money. There are many benefits of trading and settlement under depository, The Investors and as well as Companies gets certain benefits for Depository System. There are certain time and cost benefit which accrues to the investors in depository mode, In depository proper procedures are established to open client account with the help of depository participants’ .Demateria lisa tion and rematerialisation o faecount plays important role in depository by which the accounts which are in physical mode ean be converted to eketronis mode and vise-verse, Trading and settlements corporate actions, demat stocks are also made in depository system. By establishment of this system the problems like Bad deliveries Fake certificates, Loss of certificates in transit, Mutilation of certificates, Delays in transfer, Long settlement cycles, Mismatch of signatures, Dely inrefiund and remission of dividend ete are solved. Depository plays vita role in Stock market through depository investorean casily sabe his share and the mutual funds, Commercial papers, certificate of depositories etc also can be dealt in dematerialised fore,4 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET The century old India capital market has been ficing a lot of trouble in traditional paper based settlement of tade. The depository system inconcetned with conversion of securities from physical to electronic form, settlement of trades in electronic segment, trans er ofownership and electronic custody of securities. In the depositary system, the ownership ard transfer of securities. takes phe by electronic book entries, 1, Meaning of Depository Adepository i an organization which holds securities in eleetronic book entries at the request of the shareholder through the medium of a depository participant.' It assists in the allotment and transfer of securities and securities lending under the terms of depository agreement. To utilize the services offered by a depository, the investor is required to open an account called ‘Demat Account* with the depository. The objective isto allow for the faster, convenient and easy mode of afitcting the transfer of securities, The depository Act, 1996 defines it is an organization where the securities ofa shareholder are held in an electronic form of accounts in the same way as a bank holds money. 1.1 Bank and Depository ~ Comparison A depository can be compared to bank but both operate for deferent puposes. There are ceriain differences between Bank and Depository. * Account- Bank holds fund in an account but Depository holds securities in an ‘account, © Transfer- Bank transfers funds between accounts on the instruction of the account hokler whereas: Depository transfers securities between accounts on the instruction of the account holder. © Handling- Bank facilitates transfers without having to handle money whereas; Depository ficilitates transfers without having to handle securities. ‘+ Safekeeping- Bank ficilitates safekeeping of money but Depository facilitates salekeeping of secures. + Customer Contract In bank contracts are made direetly with bank but in depository contracts are mace through depository participant. 2. Who are the Depository Players? + NSDLUCDSL © Issuer Conpanies/Registrars © Depository Participants © Investors © Brokers ‘© BrokervCkaring Members ‘Dr. Guruswami, Capital Market, Chapter-21,Page: 487,(2" Edition 2003) Sanjeev Agarvial Guideto Indian Capital Market, Chapter-1a, Page-432 14" Edition 2000)5 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET + Charing Corporation 3. Types of Depository ‘There are two types of deposi India. They are National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), ry ry Limited (NSDL) NSDL is the first depository established in India, registered by SEBI in 1996, Which ensures trading and settlement of securities in electronic form. It was promoted by Industrial Development Bank of India (IDBI), Unit Trust of India (UTD), the largest Mutual Fund in India and National Stock Exchange (NSE). 3.1.1 Role and Advantage of NSDL + Advantage of good delivery: When investors convent their physical shares into demuterialized form (Process of conversion of securities held in physical form into ekeetronic form), be also communicates with depository environment. NSDL has provided a facility of providing good delivery. There are no questions arising out of unsuccessful delivery. + Does not charge Stamp Duty: NSDL does not charge stamp duty in any kind of securities, which falls under the depository or are listed in stock exchange. ‘The equity shares, units of Mutual Funds and Debe instruments are all included in securities of depositories, ‘+ Elimination of risks associated with physical certificates: Investor has to take help of NSDL.to ¢liminate problems like mutilation of certificates, thet of stocks, and loss of certificates. + Reduce Paperwork and Direct costs of record keeping: The depositories are proven beneficial in reducing the paperwork of investors and direct casts of physical handling, record keeping and movement or salekeeping of certificates ‘+ Portfolio Monitoring: NSDL provies an opportunity to easily inspect or monitor the portfolio about the consolidated position of investments in all instruments. © Status reports: NSDL has provided a periodic status reports about the ho ings of transactions to their investors, It feads to better control on any fraudulent ‘occurrences. * Faster Settlements: The NSDL completes their settlements ina short period of time, it provides an opportunity of faster settlements andl provide more liquidity to their investors, + Elimination of problems related to address alteration, transmission ete: When an investor wants to alter their address or transmission in their secwrit then he has to go and inform to NSDL , where he is registered their securities,6 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET With all important documents instead of changing address in according to the different procedure with each company or regisrar, 3.2 Central Depository Serviees (India) Limited (CDSL) CDSL isthe second largest depository in India, registered by SEBI in 1999 which ficilitated book entry transfer of securities. CDSL was promoted by The Stock Exchange, Mumbai (BSE) jointly with leading banks such as State Bank of India, Bank of Barods, HDFC Bank, Standard Chartered Bank, and Union Bank of India and Centurion Bank. Objective of CDSL is providing convenient, dependable and secure depository services at affordable cost to all market. 3.2.1 Role and Advantage of CDSL. Wide DP Network: CDSL has over 200 DPs spread around 114 cities/towns ‘cross the country, offering convenience for an investors to seleet a DP based on his Ibeation, + On Line DP Services: The branches of DP can also be direetly connected to CDSL thereby providing on-line and efficient Depository service to investors, + Wide Spectrum of Securities Available for Demat; An investor can hold almost all his securities in one account with CDSL such as bends, debentures, ‘commercial paper, government securities, and certificates of deposits. CDSL has kept its tariff very competitive to provide affordable Depository services to investors. * Dependability: CDSL" tem is based on centralized database architecture; DPscan thus provide on-line depository services with to the minute status ofthe investor's aecount. The entire database of investors s stored centrally at CDSL. Ifthere is any system-related issues at DPs end, the investor is not affected, as the entire data is availible at CDSL. 4, Stock Exchange Connected to Depository At present 10 Stock Exchanges are connected to the Depositories which are Nationa! Stack exchange, The Stock Exehange Mumbai, Delhi Stock Exchange, Ludhiana Stock Exchange, Bangalore Stock Exchange, over the counter exchange of India, Madras Stock Exchange, Inter connected Stock Exchange, Ahmadabad Stock Exchange, 5, Issuer Companies/Registrars + A Company joins a depos cither directly by investin with NSDUCDSL, establishing connectivity with NSDUCDSL andware and software, It signs an agreement7 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET + Akermatively, it may establish connectivity with NSDLICDSL through a Registrar who has mide the necessary investment in the hardware and software, © When a company joins NSDL/CDSL through a registrar, it signs a tripartite agreement with the registrar and NSDL/CDSL as per the format specified by NSDLCDSL. © A company may appoint a Registrar only for electronic connectivity and maintain share department for transfer in house. 5.1 Advantages of a Depositary to the Company '* It reduces the risk of loss of securities and, at the same time, reduces the fraudulent activities; Itavoids the checking ofshares, deeds and various papers, No share certificate is issued as the securities are divisible: Itreduces the various costs which require secretarial help; Itsupplies better communication facil Easy availability of data and information (ic. sue 0 fbonus share, right share, dividend declaration, etc.) are available which helps the shareholder to take decisions, 6. Depository Participant (DP) * It's not possible for Depository to provide services directly to the investors. DP is an agent of the depository and functions as the interacting medium between the depository and the investor. + A DP should be registered with the SEBI, which is based on the recommendation from NSDL and SEBI's own independent evaliation, + DP Must possess requisite qualifications prescribed by the concerned depository of which he is a participant + It isresponsible for muintaining the investors’ securities a/c with the depository and handles them as per the investors written instructions + He is inked to a broker who trades on behalf of investors + Toavail their servicesan account similar to a bank a/c has to be opened with the pp + As per SEBI Regulations , financial institutions, banks, custodians, stock brokers ete can become DP"s + However investors may choose DP’s of their choice and also deals with 1 or more DP's at a time. + One shoul! visit DPs, If any diserepaney in transaction statement. DP will reetify that issue. IF DPS doesn’t rectify problem, one can complain to Depository (NSDUCDSL) + DP takes one time charge for opening of aecount unler Depository participant. Depository charges the DP who in tum charges investors8 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET 6.1 Services Offered by Depository Participant The services offered. by DP’s are as under: Conversion of holdings fom physical 1 eketronie form{refered wo as demuterislisation of securities) Conversion of holding ffom electronic to book entry form(refemed to as rematerialisation of securities) Maintenance of holding in electronic form Settkment of market trades in electronic or book entry segment Settkment of off-market trades Facilitating pkdge of securities Eketronic credit o fnew share allotments such as rights, bonus, public issue. ete. 1. Why should an Investor join a depository? The present system oftrading revolves around movement of paper at all stages, be it purchases, sales or transfer and sales with the normal risks lke delays, loss in transit and bad deliveries at every stage. The only solution to these problems is trading by the advent of the depository. Three things basically considered by Investor while joining Depository which are Cost, Comfort, Convenience. 7.1 Advantages Enjoyed by Investors: Faster Transfer of transaction « Transaction take place much faster in electronic form trading compared to a 30-60 days settlement cycle that usually takes pice in the case of physical transfer of securities, Elimination of Bad Deliveries and all risks associated with physical certificate such as boss, thefl, mutikuion, forgery etc. Easy and Enhanced Liquidity No Stamp Duty on transfer No Postage/Courier Charge: Faster Disbursement of corporate benefit like rights, bonus, ete. Facilities of Creating Charges on dematerialized shares for granting loans and advances against shares, No Deby in Transfer of Securities Lower Interest on Loans Against Demat Shares Nomination Facilities at The Time of Account Opening Much Faster Payment on Sale of Shares Minimum Handling of Paper No Scope for Forgery/Damage of Share Certificate Investors are not required fo open multiple accounts just because they have spelled their names differently in different companies so long as signature is consistent, Y Sanjeew Agarwal Guldeto indian Capital Marker, Chapter-14, Page-486,447(1* Edition 2000)9 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET roker/Clearing Members All rades in the book entry segment are settled through the depository. The broker has to open ekaring account with a DP for sett kement of trades one in the book airy segment of the NSE/other stock exchange. 8.1 Advantages to a Clearing Member + Enhanced liquidity, safety and tumover on stock mirket + Opportunity for development of retail brokerage business + Ability to arrange pledges without movement of physical scrip and further increase overall evel of trading activity Bquidity and profits, + Improved protection of shareholder's rights resulting fiom more timely communications from the Ssuer. + Reduced transactions costs through greater efficiency. + Elimination of forgery and counterfeit with attendant reduction in settlement risk from bad deliveris. + Provide automation to post trade processing, + Standardisation of procedures. + Bringing efficiency to the market place. + Improved cash flow learing Corporation The clearing coporationsettles the trades done on the book entry segment ofthe stock exchange as in the physical segment, All deliveries due from the brokers fora settlement is given by NSDL to the clearing corporation and all deliveries receivable for a settlement are received by NSDL fiom the clearing corporation. 10, Demat (Beneficiary) Account Beneficiary a/e is an account opened by the investor ora broker with a DP of his choice to hold shares in Demats form and undertakes serip less triding, For opening Demat ale, the following procedure is required:* > DP will make available the Account Opening Form and a Copy of the agreement in duplicate to be signed with the client. This is the agreement between the DP and the individual seeking to open an account with the Depository Participant. A Specimen Signature card will also be provided. The details that the prospective individual with have to fill in the Application Form are : Name of the beneficiary ‘Sanjeev Agarwal Guide to indinn Capital Market, Chapter-14,Page-439,440{1"' Edition 2000)DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET Date of bith(in case of minor) Occupation of Beneficiary: Local Address, Telephone No., Fax No. Status Code, Sub-Status Code Bank account particulars such as name of the bank and its branch, Curent secoun’Saving Account number, PAN/GIR Number, Signature of authorized signatories, In case of NRI, Foreign address and RBI Ref No. and approval date. Nomince’s Name and address Signature of Beneficiary. In specimen signature-Card, signature of beneficiary and passport size photograph. tree terest ® ‘The prospective individual will furnish the account opening form duly filled along with the account opening, charges. ¥ The prospective individual along with the application form will also be required to submit the agreement signed. in duplicate. Verification of document if not found in order, the same shall be returned for rectification, stating reason thereof * [fdocument are found in order, DP will accept the form and provide the client With an acknowledgment sip duly signed and stamped. > On completing above, DP will proceed to open the account, A elient Account Number will be granted and recorded in the account opening form, The individual will be informed of the same. > DP will also tecord the specimen signature-Card for the purpose of checking authorized in the fare Once a demat aie is opened investor must sign an agreement with the DP and the investor will be allotted an account no, called as client entity. No minimum balance is required. The investor is provided witha transaction statement by his DP at regular intervals based on which the investor will know his security balances. Partnership Firms, HUF, Minors cannot be the legal entity of Demat ave but the Partners, Karta of HUF, Guardian of Minor can be the legal entity 11, Dematerialisation It means conversion of the physical certificates into Dematerialised holdings at the request of the investor. The physical certificates are taken back by the registrar and destroyed and an equivalent number of securities are credited in the electronic boklings ofthat investor this is done at the request of investor, Only shares registered in the name: ofthe ae hokler are accepted for Dematerialisation at the depository. 0aw DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET 11.1 Time limit for Dematerialisation The time limit permitted to the registrar by SEBI for Dematerialisation is 30 days from the date ofreceipt of the physical request fromthe DP. The time limit of30 days is reckoned ffom the date of receipt of physical request by the registrar from the DP. 11.2 Process of Dematerialisation In order to dematerialise physical securities one has to fill in a DRF (Demat Request Form) which is available with the DP and submit the same along with physical certificates that are to be Dematerialised. Separate DRF has to be filled for each ISIN * ‘The complete process of Demterialisation is outlined below? © Surender certificates for Demateriatisation to your DP. © DPintinates: to the Depository regarding the request through the system, ‘© DP submits the certificates to the regitrar of the Issuer Company. + Registrar confirms the Dematerialisation request tiom depository. ‘+ Aficr Dematerialising the cenificates, Registrar updates accounts and informs depository regarding completion of Dematerialisation © Depository updates its accounts and informs the DP. DP updates the Dermat account of the investor. 11.3 Dematerialisation of other instruments ‘There are number of instruments which can be issued and can be held as denmterialized form, Other than equity shares the instruments like debenture, bonds,PCDs,NCDs.CPs,CDs can be issued and hek! in demat form . Mutual Funds can be held as dematerialized form also. The mutual fund unit which are in the physical form can be demuterinlized to the dent account ‘The process is called Remuterialisation. [fone wishes to get back his securities in the physical form he has to fill in the RRF (Remat Request Form) and request his DP for Rematcrialisation of the balances in his securities account, The process of Rematerialisation is outlined below.” © Makea request for Remateriatisation, SISIN (International Scourities identification Number) a unique 12g alpha-mumerie Klentiication number alloted for a security (Eg-INE383COLOI8) See: Securities Exchange Board of India, Eccquently asked question on Dematerialisation,no, 29, htn:#/wwiesebi gov in/fag/faadematitm! Securities Exehange Board of India, Frequently asked question on Dematerialisation, Q No. 28 jhupi/fuww.sebi gov inffan/landemat him » Securities Exchange Board of india, Erequently asked question op Dematerilisation, O No.3? . ‘hito//vsww seb pov n/iag/tandema LhtmtDEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET + Depository participant ji system. © Depository confirms Remateriaisation request to the registrar © Registrar updates accounts and prints certificates. tes depository regarding the request through the Depository updates accounts and downloads detail to depository participant. Registrar dispatches certificates to investor. 13. Trading in Demat Stocks The biggest benefit to the investor who sells dematerialized shares will be that the brokers have no fear of bad delivery onselling deneterialized shares. An Investor ean ako receive his bonus and rights directly in his depository account as a direct eredit, thus, eliminating risk of loss in transit. He can abso expect lower interest charges for loans taken against demat shares compared to the interest for loan against physical shares. 1. Facilities offered by Depository System Opening of depository system offers certain ficilities like opening of Demat Account, Dematerialisation, Rematerialisation, settlement of trades in demateria ized securities, dealing in government securities, Stock lending and borrowing, redemption etc, But along with that there are certain facilities which are also provided by Depository which are: Transmission- The claimant will have to fill a transmission request form (TRF), supported by documents like death certificate, suecession certificate, ete, The major advantage in transmission of dematerialized holdings is that the transmission formalities far all securities held with DP can be completed in a single stage, ‘Transposition-Share sent for transposition can be dematerialized. The investorcan get te securities dematerialized in the same account if the names appearing on the certificates match with the names in which the Demat account has been opened are in a different order, by submitting the security certificates along with the transposition form au the denuterialized request form to the DP Nomination ~ Shares held in electronic form also can be nominated, Nomination can be made only by individuals holding beneficiary accounts on their own behalf either singly or jointly: The investor must fill in and submit by the account holder by filing up the revised nomination form and submitting the same fo the DP. The account bolder, nominee and two witnesses must sign this formand the name, address and photograph ofthe nominee must also be submitted. Account freezing — An investor ean freeze/lock his account for any given perind of time if he so desires. It is possible fora client to issue instructions requesting for the will then be allowed to the account ta be fiozen until any firther instructions. Single Window Services- The DP enjoys the bene fits ofa broker-cum-DP wherein the client gets the benefit of single window services. The broker-DP interlace offers clients 23B DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET the benefit of operating the depository account at the broker end thus eliminating multiple agencies and contaet points. Pledging — Pledging dematerialized compared to pledging physical see uri depository account. scurities is casier and more advantageous as For that both Borrower and Lender have J. Kinds of Problem Solved After Introduction of Depository System + Bad deliveries ake certificates Loss of cettifeates it transit Mutilation of certifeates Delays in transfer Long settlement. eyekes Mismatch of signatures, + Delay in refimd and remission of dividend ete. ‘Trading and Settlement ‘The procedure for buying and selling dematerialised sec uri procedure for buying and selling physical securities. The difference lies in the process of delivery (in case of sale) and receipt (in case of purchase) of securities, In ease of purchase: ‘+ The broker will receive the securities. in his account on the payout day. * The broker will give instruction to its DP to debit his aecount and eredit BO's account. = BO will “Receipt Instruction’ to DP for receiving credit by’ filling appropriate form, However BO can give standing instruction for credit to his account that will obviate the need of giving Receipt Instruction every time. In case of sale= BO will gi ry instruction through Delivery Instruction Slip (DIS) to DP to debit his aceount and credit the broker's account. Such instruction should reach the DP’s office at east 24 hours before the payin, failing which; DP will accept the instruction only at the BO'S risk, PO It is possible to get securities allotted to in Public Offerings directly in the ekectronic form, Inthe public ssue application form, there is a provision to indicate the manner in which an investor wants the securities to be allotted, He has to mention the BO ID, name and DP 1D on the application form. Any allotment made will be eredited into the BO account4 DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET 17. Law Relating Depository System The depository is the registered owner. It is only havi purpose of being a registered owner in the eyes of kw for t system & governed by certain acts which are: the custody For the uer.A depository > ‘The SEBK(Depositories and Participants) Regulations, 1996 > Business mules of depository ® Depository Act,1996 Depository Act, 1996 “Depository “means a company formed and registered under the Companies Act, 1956, and which has been grinted a certificate of registration under sub-section (1A) of section 12 of the SEBI Act, 1992.* ‘+ “Participant “means @ person registered as such under sub-section(1A) of section 12 of SEBI act,1992° “Beneficial Owner” means a person whose name is recorded as such with a depository.” © This act also deals with Rights and Obligation of DP, Issuers, Beneficial Owners!! Enquiry and Inspections(Powers of Board and Penalties in Det)? SEB (Depositories and Participants) Regulations, 1996 ‘+ This Regulation gave a perfect shape to Depository system in India + NSDL and CSDL are established uncer the SEBI guidelines + Tt ako defines about Rights and Obligations of Depositories, Participants, Issuers, Manner of Surrender of Certificate of Security and Creation of Pledge ‘or Hypothecation.!? + Registration of Depository and Depository Participant is dealt by such reguktion.** + The Procedure, Terms, Limitations, Renewal, Withdrawal, issue, Transfer, Record of payments, Steps when defiult is made all is regulated by this regulation. + SEBI(Depositories and participants)Regulation is amended several times, Last amendment was made in 2014 in which acting as participant in more than one depository was introduced!’ se A tKe) Depository Ac 9See 2(1\.} Depositary Act "*See{ 1a) Depository Acts 1 Chapter Ill, See 4-17, Depository Act, 1996 % Chapter IV, Sec 18-19 J, Depository Act,1996 13 Chapter V , Sec 26-58 8, SEBI(Depositories and Paticipants) Regulations, 19% 4 Chapter IV, Sec 16-25, EB(Depositories and Participants) Regulations, 1996 4 Section 2048 of SEBi(Depositories and Panicipants|Amendment) Regulation 2014DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET 18. Conclusion The Depository System is a well organized and properly planned systems by which the speedy functioning and transparent transactions are getting possible. Like other Asian countries India is growing economy and such depository system is helping in the objective of Nation, Depository is not only protecting the investors and companies Under SEBI regulation but ako fistening huge amount of functioning of finance in a proper way, The Investors and Companies are getting so many benefits from depositories. But some disadvaniages were about the depository system were known beforehand. But since the advantages outweighed the shortcomings of dematerialization, the depository system was given the go-ahead, The disadvantages are like Lack of control, Compkexity ofthe system, Trading in securities may become uncontrolled in ease of dematerialized securities. Multiple regultory flameworks have to be confirmed to, including the Depositories Act, Regulations ancl the variows Bye Laws of various depositories. Additionally, agreements are entered at various levels in the process of dematerialization, These may cause anxiety to the investor desirous of simplicity in terms of transactions in dematerialized securities. In-my opinion Depository needs a greater supervision because it is incumbent upon the capital market regulator to keep a close watch on the trading in demateria ized securities and see to it that trading does not act as a detriment to investors. The rok of key market players in case of dematerialized securities, suchas stock brokers, needs to be supervised as they have the capability of manipulating the market. The Depository Systemis not free from sags. Some of them are, Number of ffuds may be inereased as there is no physical checking, practically, to set up a single depository is not possible, MDS (Multiple Depository System) invites the problems of coordination, though the Depository System is not free from snags, even then it is a boom to the worl of capital market, It, no doubt, proves an efficient trans fer system andl helps the investors and the company in various forms. It overcomes the problems from bad delivery, counterfeit certificates, ete, It ako reduces various cost and expenses (i. Registration cost) 15DEPOSITORY SYSTEM AND ITS ROLE IN STOCK MARKET REFERENCES Bibliography © Dr. S. Guraswamy: , Capital Market , 2! Edition(2009) © Sanjiv Agarwal , Guide to Indian Capital Market, 1* Edition(2000) Internet Sources wu. youtube.com, _htips://vww. youtube. com/watehv=C-29kivwaS4 itps:/www. youtube. com/watch?y=uLikLWGEK ml © wuveslideshare new, © www wikipediia.ore Acts Fallowed © Depository Act, 1996 © SEBI (Depositories and Participants) Regulations, 1996 © SEBM(Depositories and Participants Amendment) Regulations,2014. 16