Depository Account (DEMAT)

(Source: CDSLWebsite-www.cdslindia.com)

Central Depository Services (India) Limited (CDSL) is a depository managed by

professionals. It has been promoted by the Bombay Stock Exchange (BSE) Limited
along with a cross section of several leading Indian and foreign banks. CDSL's objective
is to provide convenient, dependable and secure depository services at an affordable
cost to investors.

Presently, it is compulsory to settle all trades done on any stock exchange in demat
mode only. Although investors have an alternative to settle trades upto 500 shares in
physical form, in practice almost all trades on stock exchanges are now being settled in
demat mode only.

Dematerialisation or demat is the process of converting the securities held in physical

form into an electronic record form or to directly allot securities in electronic record form.
These electronic records of securities are shown as "electronic balances" in the demat
accounts of investors. Any investor can open a demat account through a Depository
Participant (DP). The DP is an agent of the depository and provides a link between the
account holder or Beneficial Owner (BO), the Issuing Company, CDSL, the BOs broker
and the Stock Exchange. CDSL publishes from time to time an updated list of DPs
registered with it. The list is also available on CDSL's website www.cdslindia.com.

Benefits of holding securities in the Dematerialised Form

a. Elimination of all risks associated with physical certificates: There is no risk
of loss, mutilation or theft of certificates.
b. Elimination of bad deliveries: In the depository environment, securities
cannot be returned "under objection" for any reason and hence the question of
bad delivery does not arise nor does the investor face any uncertainty on
the genuinity of securities purchased by him.
c. Immediate transfer and registration of securities: After the payout, once
securities are credited to the investor's demat account, the investor becomes
the owner of the securities, as there is no need to seek registration from the
company or its registrar.
d. Faster settlement cycles: All stock exchanges currently follow the T+2 rolling
settlement cycle, i.e., settlement of trades is done on the 2 nd working day from
the trade day. This has become possible because of demat, which enables
faster transfer of securities and enhances liquidity.
e. Faster receipt of securities in case of bonus/split/merger etc.: Direct credit of
securities issued as bonus or on allotment of IPO/rights, split and merger
ensures faster receipt of securities and eliminate the risk of loss of certificates in
transit.
f. Waiver of stamp duty: No stamp duty is payable by the investors for transfer
of any kind of securities in demat form.
g. Facilitates ease in recording change of address, transmission, etc.:
For all investments held in the BO's a/c, instead of informing each company
separately about the change in address, bank account details, nomination, one
single instruction to the DP takes care of all such changes.
 h. Ease of portfolio monitoring: The statement of account periodically sent by
the DP provides the investor the consolidated position of all his investments in
the demat account. This makes it convenient for an investor to monitor his
portfolio.

Why should an investor open a Demat Account with CDSL?

CDSL's system incorporates a number of distinct features which provide BOs

convenient, dependable and secure depository services at an affordable cost.

CONVENIENCES

a. Wide DP network: CDSL has a wide network of DPs offering demat services
across the country, and thus providing investors an opportunity to select a DP of
their choice depending on the location and other conveniences.
b. On-line DP services: CDSL's centralized database provides on-line depository
services across the country. All DPs are electronically connected to CDSL,
thereby making the depository services available at the door-step of the investor.
c. Availability of wide spectrum of securities: The equity shares of almost all A, B1 &
B2 group companies are available for dematerialisation on CDSL. CDSL extends
demat facilities practically for all categories of securities which include equity,
bonds, commercial papers, government securities, Certificate of deposits and units
of Mutual Funds. A BO can also hold warehouse receipts pertaining to commodities,
in a demat account. However, a separate account should be opened for holding
warehouse receipts.
d. Competitive fee structure: CDSL's fees are very reasonable and competitive,
which makes it possible for DPs to offer demat services to investors at an affordable
cost.
e. Easi and easiest a) Through CDSL’s unique internet facility Electronic Access to
Securities Information-easi; BOs can view and print a statement of their demat
account. BOs can also get the status if the last 7 days transactions in easi. BOs also
get a daily valuation of the securities held in their demat account, as of the previous
day’s account, as of the previous day’s closing price on BSE. BOs can also monitor
corporate announcements of the securities held in their account, thus enabling them
to take informed investment decisions. b) easiest is an internet based facility which
permits BOs/CMs to submit debit/credit transaction instructions, which can be off-
market, on-market, inter-depository and early pay-in transactions. Easiest also has a
facility for upload of transactions, which enables a BO/CM to enter the instructions
offline and thereafter upload the same. Moreover, all the facilities and benefits of easi
are available to BOs registered for easiest.
f. SMS Alerts related to transactions-SMART: CDSL’s SMS alert facility- SMART,
enables BOs to monitor their account for all debits (upto 4 ISINs) or for credits in their
account, received due to Initial Public Offers(IPOs) or other Corporate Actions.

DEPENDABILITY
a) On-line information to users: With the CDSL's centralised database
architecture, on-line depository services are available to BOs with the latest
status of their demat accounts.
 b) Safety of data: In case any system-related problem develops at the DPs end, it
does not effect the BO’s interest in any way as the CDSL database is
maintained centrally.

c) Audit and inspection: CDSL conducts regular audit of its DPs to ensure
compliance of the stringent operational and regulatory requirements.

d) Helpdesk: CDSL's prompt and courteous helpline facility is available to DPs

and investors to obtain any clarification and guidance.

e) Always meeting users requirements: Continuous updation ofnprocedures

and processes in tune with the evolving market practices is another hallmark
of CDSL's system.

f) Dormat Account Monitoring: CDSL has in place a mechanism for monitoring

dormant accounts.

SECURITY
a. System Access: only a person at the DPs end who has been
preauthorized by CDSL can access the CDSL system.
b. Unique BO account number: Each BO in CDSL is allocated a unique
account number. This avoids wrong transfer of securities in the event the
transferee’s account number is Keyed in wrongly.
c. Insurance cover: CDSL has obtained adequate insurance cover for any
unlikely loss occurring to a BO due to the negligence of CDSL and/or the
DP.

Opening a Demat Account

a) Individual and non-individual investors have a choice to open a demat account
with any CDSL DP. Individual investors could be Indian residents or NRIs. Non-
individual investors include Corporates, FIs, FIIs, Mutual Funds, Trusts etc.
Also under the scheme of two-way fungibility of ADR/GDR, non-residents
can open a demat account with a CDSL DP.
b) An investor should consider the fee structure, locational convenience and the
track record of the DP before selecting one for opening their demat account.
c) A demat account can be maintained even with 'nil' balance, as there is
no requirement of holding any minimum security balance in a demat account.
d) If securities are already held in joint names, the demat account should be
opened in the order of names in which the securities are held. If the securities
are held by an individual jointly with different persons, separate demat
accounts will have to be opened for each such combination. However, if the
same persons hold securities in different order of their names, one single
demat account in names of all these persons (not exceeding 3 persons)
would be sufficient, provided the facility of transposition-cum-demat is used.
e) At the time of opening the demat account or anytime thereafter, individuals
having a demat account in a single or joint name/s can make, a nomination. In
 the unfortunate event of demise of one of the joint holders, the securities can
be transmitted in the names of the surviving holder(s). But, in the event of
demise of the sole holder or all the joint holders, the securities can be
transmitted in the name of the nominee. A resident Indian can nominate an
NRI or another resident Indian and similarly an NRI can nominate a resident
Indian or another NRI. Non-individuals including societies, trusts, body
corporates, kartas of HUF and holders of power of attorney, cannot make a
nomination.

Documents required to be submitted at the time of opening a CDSL Demat

Account

INDIVIDUAL INVESTORS

a) An application in the prescribed form

b) Copy of PAN CARD (Mandatory)
c) Copy of election-ID card / passport / ration card or driving license or any
other address proof
d) Copy of the birth certificate and guardian's name, in case of a minor
e) A passport size photograph of the applicant(s) with their signature(s) put across
the photograph(s)
f) In case of any attestation by a Magistrate / Notary Public / Special
Executive Magistrate, the name, address and telephone number of the
Magistrate / Notary Public / Special Executive Magistrate.
g) A copy of the power of attorney, if required
h) Agreement in the prescribed form duly executed
(b & c are mandatory for 1st holder & joint holder/s, if any)

CORPORATE INVESTORS
a) An application in the prescribed form
b) Copy of PAN CARD (Mandatory)
c) A certified copy of the Memorandum and Articles of Association of the
company
d) A certified true copy of the Board Resolution authorising opening of demat
account and listing out the name(s) of the official(s) authorized by the
Board to act as authorised signatory/ies
e) Name(s) of the authorised signatory/ies and their designation(s) with
specimen signature(s)
f) A copy of power of attorney executed
g) In case of attestation by any Magistrate/Notary, Public/Special Executiven
Magistrate, his name, address and telephone number
h) Agreement executed in the prescribed form

Additional requirements for some categories of investors

BO Category Additional Requirement

Non Resident Indian (NRI) Proof of foreign address and Indian
Address and of nationals or persons
preferably a copy of the passport of
 Indian origin. All proofs should be
attested by the Indian Embassy /
Consulate General / Notary Public / Any
Court / Magistrate / Judge / Local Banker
in the country where the NRI resides.
Registered Trust Certified copy of the trust deed, list of
authorized signatories with their
specimen signatures and a copy of the
certificate of registration of the trust.
Unregistered Trust Certified copy of the trust deed along
with the list of authorised signatories
with specimen signatures and proof of
address and identity documents of the
trustees.

Partnership firm The account has to be opened in the

names of the partners and the PAN
proof of the partners, the partnership firm
and a copy of the partnership deed have
to be submitted.
Proprietorship firm The account should be opened in the
name of the sole proprietor and the PAN
of the proprietor and the firm has to be
submitted.
Clearing Member (CM) A certified copy of the SEBI registration
certificate.
Foreign Institutional Investor (FII) A certified copy of the SEBI/RBI
and Overseas Corporate Bodies registration.
(OCB)

BOs should receive from their DP:

a) A copy of the signed agreement.
b) Beneficial Owner Identification Number (BOID) or Demat Account number.
This BO ID should be quoted in all correspondence with the DP, Issuer
Companies, Registrar & Transfer agents and CDSL.
c) Pre-printed instruction slips for effecting various types of transactions,
form for dematerialising physical certificates, etc. CDSL has one single debit
instruction slip both for 'on-market' and 'off-market' transactions.
BOs should note:
a) BOs may consider issuing a one time instruction to their DPs for getting
securities automatically credited to their demat account. Purchased securities
can be credited to the demat account after payout of the securities by the
clearing house/corporation of the stock exchange. Securities purchased on
any of the stock exchanges connected to CDSL can be credited directly in the
demat account.
b) While accepting the Delivery Instruction Slip (DIS) book issued by the DP, the
BOs should ensure that their BO ID is prestamped on all the pages along with
the serial number. The DIS book should be kept safely. BOs should not issue
 anyone blank DIS slips duly signed. BOs should also strike out the empty
spaces, if any, in the DIS, before submitting to DP.
c) For sale of securities in demat form, after the broker confirms the trade, the
BO should immediately issue debit instruction to his DP using a debit instruction
slip.
d) For maintaining the cut-off time for submitting delivery instructions for trades
done on the stock exchange (on-market trades) as per SEBI requirement, a BO
should issue delivery instructions to his DP latest by 4:00 p.m. on T+1 day. Any
delay in issuing instructions to the DP might result in the non-delivery of
shares/securities leading to auctioning of such securities and a consequent
loss to the investor. This is more so in T+2 settlement cycle.
e) Any change in address and / or bank account details should be intimated to
DP together with supporting documents as evidence.

SETTLEMENT FEES
CDSL does not charge any fee directly to the BO but collects the depository fees for
debit and pledge transactions in any BO account from the concerned DP. The charges
indicated by DPs are generally inclusive of CDSL fee, if any.

REDRESSAL OF INVESTOR GRIEVANCES

In case of any unresolved grievance with your DP, please contact the Investor
Grievances Cell.

The Investor Relations Office

Central Depository Services (India) Limited

16th-17th Floors, Phiroze Jeejeebhoy Towers
Dalal Street, Mumbai-400 001.
Tel: (022) 22723333 Fax: (022) 22723199
Email: investors@cdslindia.com
Website : www.cdslindia.com

Disclaimer - This investors guide contains information, which is subject to change and
cannot be the basis for any claims or demand or cause of action by anyone against
CDSL or its DPs. For latest information, BO's are requested to contact their DP's / CDSL

FAQs:

I. General

1. What is a depository?
A "Depository" is a provider of facility for holding and/or transacting securities in
the book entry form. Physical securities can be converted in to the book entry
form, i.e., electronic form by way of immobilization or dematerialization. (so that
they exist only as electronic records). India has chosen the dematerialization
route. A depository function somewhat similar to a commercial bank. To avail of
the services offered by a depository, the investor has to open a demat account
with a registered Depository Participant( DP).
2. What is dematerialization (Demat)?
"Dematerialization" is a process by which physical certificates are converted into
electronic form.

3. What is Rematerialisation (Remat)?

Rematerialisation is the process of converting securities held in a demat account

in electronic form back in physical certificate form.

4. Who is registered owner of Securities?

When securities of a company are held in physical form by an investor, the name
of the investor is recorded in the books of the company as a 'Registered Owner of
the Securities. Each certificate is identified by a Folio number, certificate number
and distinctive range numbers. When physical securities are converted into
electronic form, the depository becomes ‘Registered owner” in the books of the
company and investors name is removed from books of the company. Since
depository is holding such shares as a custodian or a guardian it cannot claim any
benefit or it is not liable for any loss as a result of the holdings.

5. Who is a Beneficial Owner (BO) of the securities?

The investor whose securities are held in electronic form in a demat account
opened with a depository through a Depository Participant is called ‘Beneficial
Owner’ (BO). All the benefits as a result of the holding the securities are given to
such beneficial owner.

6. Who is a DP?
A DP is an agent of the depository who is authorized to offer depository services
to investors and is registered as a DP with SEBI. Financial institutions, banks,
custodians, stockbrokers and other types of intermediaries specified under SEBI
(Depositories and Participants) Regulations, 1996, complying with the
requirements prescribed by SEBI/ Depositories can be registered as DP. Further
information on DPs can be accessed from CDSL’s website, www.cdslindia.com.
An investor will always interact with a DP for the services and cannot directly
approach the depository for any services except for Redressal of Grievances.

7. Who is an Issuer?
"Issuer" means any entity such as corporate/State or Central Government
organizations issuing securities which can be held in depository in the electronic
form.

8. Who is an RTA?.
An RTA, i.e., Registrar and Transfer Agent is an agent of the issuer. RTA act as
an intermediary between the issuer and depository for providing services, such as
Dematerialization, Rematerialisation, Initial Public Offers and Corporate actions.

9. What is an ISIN (International Securities Identification Number)?

"ISIN" is a unique 12 digit alphanumeric code given to security, shares,
Debentures, Bonds, etc., when the security is admitted in the depository system.
 First two digits of the ISIN code indicate country of registration for the security. All
securities registered on depository in India have first two digits of the ISIN code
'IN'.

10. Whether different securities issued by the same Issuer will have same ISIN?
No, different securities issued by the same issuer will have different ISIN code.

11. What are the services provided by a Depository?

Depository provides following services to the investors through a DP:

a. Opening a demat account
b. Dematerialization, i.e., converting physical securities into electronic form
c. Rematerialisation, i.e., converting electronic securities balances held in a BO
account into physical form
d. To maintain record of holdings in the electronic form
e. Facilitate settlement of trades by exchanges / Clearing corporations by
delivering / receiving underlying securities from / in BO accounts
f. Facilitate transfer of securities between BOs
g. Receiving electronic credit in respect of securities allotted by issuers under
IPO or otherwise
h. Receiving non cash corporate benefits, such as, allotment of bonus and rights
shares or any other non cash corporate benefits given by the issuers in
electronic form
i. Facilitate Pledging of dematerialized securities
j. Freezing of the demat account for debits, credits, or both
k. Internet facilities "easi" and "easiest".
l. Subscription/ Redemption of mutual fund units in demat form

12. What is the legal framework governing the depository functions in India?

Following are the acts and regulations under which a depository functions:
1. The Depositories Act, 1996
2. SEBI (Depositories and Participant) Regulations,1996
3. CDSL Bye-laws and Operating Instructions which are framed under the
above two documents
4. Prevention of Money Laundering Act (PMLA), 2002

13. What is Destatementization?

Destatementization is conversion of mutual units held in physical form, i.e., from a
statement form into an electronic, i.e., Demat form.

14. What is Restatementization?

Restatementization is exactly opposite of Destatementization, i.e., Conversion of
mutual fund units held in demat, i.e., electronic form back into physical form.

15. What are the benefits of depository to the investor and other entities associated
with capital market?
 1. Reduction in paperwork
2. Reduction in risks associated with holding securities in paper form such as
theft, damage due to fire, bad delivery in settlement process and fake and
Forged securities.
3. Faster mode of transferring securities from one account to other account.
4. Elimination of stamp duty on transfer of securities which was applicable in
paper form.
5. Reduction in transaction cost.
6. Change in details of the demat account to be submitted only to DP and
subsequently get registered electronically with all companies in which
investor holds securities
7. Faster mode of Transmission of securities to the nominee or surveying
holder in case of death of an account holder
8. Holding all type of capital market instruments, such as equity, debt, mutual
fund units and G-SEC in a single account
9. Automatic credits of securities into demat account arising out of corporate
actions, such as Bonus, split/consolidation/merger/ demerger.

II. DEMAT ACCOUNT OPENING

1. What are the benefits of opening a demat account for investors?

A demat account has become a necessity for all categories of investors because
of the following reasons:
a. SEBI has made it compulsory for trades in all listed scrips to be settled in
demat mode. Although, trades upto 500 shares can be settled in physical
form, physical settlement is virtually not taking place for the apprehension of
bad delivery on account of mismatch of signatures, forgery of signatures, fake
certificates, etc.
b. It is a safe and convenient way to hold securities compared to holding
securities in physical form.
c. No stamp duty is levied on transfer of securities held in demat form.
d. Instantaneous transfer of securities enhances liquidity.
e. It eliminates delays, thefts, interceptions and subsequent misuse of
certificates.
f. Change of address and registration of Power of Attorney can be effected
across companies by one single instruction to the DP.
g. Market lot of one share for the purpose of transactions - so no odd lot
problem.
h. Any number of securities can be transferred / delivered with one delivery
instruction. Therefore, paperwork and signing of multiple transfer forms is
done away with.
i. It facilitates taking loans / advances against securities,
j. Immediate credits in case of any allotment in Non cash corporate actions,
such as bonus, rights issues and IPOs.

2. What are the benefits of opening a demat account with CDSL?

Advantages of opening a demat-account with CDSL are given below

 a. Unique centralized database of CDSL enables DPs to debit/credit securities
instantaneously to the BO's account.
b. CDSL allots a unique demat account number to each demat account, which
ensures debit/credit of securities only to the intended account. Thus, if an
account number is keyed-in incorrectly, CDSL system will not effect the
transaction.
c. CDSL offers a settlement facility to its BO's under which securities sold or
purchased by them through any broker on BSE/NSE. It can be directly
debited/credited in their BO account without routing it through the broker's
pool account.
d. The cost for settlement of securities through CDSL is lower in most cases.
Thus, BOs can expect a lower charge in respect of securities held in CDSL
accounts.
e. Investors can monitor and access their holding and the status of their
transactions in their accounts through CDSL's internet based facility 'easi'.
Further, using CDSL's internet based facility 'easiest' BOs can also submit
settlement instructions through the internet.

3. Can a demat account be opened directly with CDSL?

A demat account can not be opened directly with CDSL. The demat account has
to be opened only through a DP of CDSL.

4. Can an investor, already having a demat account, open another account with
any other CDSL DP?
Yes. The investor has a choice to open another demat account with any CDSL DP
and can also refer to FAQs on BSDA category demat accounts.

5. Can a DP collect account opening charges?

SEBI has directed that no investor should pay account opening charges, besides
the statutory charges.

6. Can all securities be dematerialized through a single demat account?

Yes. Any number of securities admitted with CDSL can be dematerialized and
held in one demat account.

7. What should an investor do to open an account with a DP?

The process of opening a demat account through a DP of CDSL is very simple
and easy. It is similar to the opening of a bank account.

  Investor has to first choose a DP based on his convenience and the

DP's charges.
 The investor has to fill up the KYC form and attach the documents with
it as per SEBI guidelines specified in SEBI circular
MIRSD/SE/Cir/21/2011 dated October 5, 2011, and circulars issued by
KRA agencies from time to time.
 The investor also has to submit a completely filled, signed ‘Additional
KYC form for opening a Demat Account’ as prescribed by CDSL, along
with the proof of correspondence address.
  Before opening the demat account, the investor will have to submit the
duly signed Rights and Obligations of beneficial owner and the
Depository Participants
 On opening a demat account, a unique BO ID (Beneficial Owner
Identification) Number is allotted to the demat account, which has to be
quoted in all future transactions.

8. Is it mandatory to submit PAN card details?
Yes. SEBI has made it mandatory for all existing and new account holders to
submit a copy of their PAN card, along with the original for verification.

9. Why bank details are required while opening a demat account?

This requirement is a security measure. The Dividend / interest warrants issued by

the companies will have BOs name printed on it, so that the warrants can not be
misused by other person. Further, SEBI has, vide is circular no.
CIR/HRD/DP/10/2013 dated March21, 2013, made it mandatory for listed
companies to use electronic payment system for distribution of dividend/interest
and other can benefits to investors.

10. Is it necessary for an investor to open an account with the same DP as that
of his broker for settling the trades done through the broker?

No. There is absolutely no compulsions on any investor to open his demat account
with the same DP as that of his broker. Investor can open account with the DP of
his/her choice and can carry on his trading activity through a broker of his choice.

11. Can a demat account be opened in the name of Joint Holders?

Yes. A demat account can be a single holder account or a joint holder account. A
demat account can have maximum three account holders, i.e., one main holder
and two joint holders.

DEMAT ACCOUNTS FOR MINOR

12 Can a Demat account be opened for a minor?

Demat account can be opened in the name of a minor. The account will be
operated by a guardian till the minor becomes major, Guardian has to be the
father or in his absence mother. In absence of both, father or mother, the guardian
can be appointed by court.

13. Can minor be a joint holder in another demat account?

No. Minor cannot be a joint holder in a demat account.

14. What happens to a minor account when the minor becomes major?
When a minor attains majority, two options are possible.

 The existing account can be closed and new account can be opened, in the
name of the minor turned major and all securities in the minor’s account are
transferred to the new account.
  Existing account can still be used. Minor turned major has to sign ‘the
Rights and Obligations of the Beneficial owner of depository participant’
with the DP, and complete all formalities required for opening a new demat
account. Guardian details entered earlier have to be deleted.

DEMAT ACCOUNT FOR TRUST

15. Can a demat account be opened in the name of a trust?

Yes. If the trust is registered under the Public Trust act 1860 / Societies
Registration act / Bombay Public Trust act / public trust act in force in the state, a
demat account can be opened in the name of a trust.
If the trust is a private or unregistered trust, a demat account shall be opened in
the name of trusties as an individual account. If the trust has more than three
trusties, they will have to decide in whose name the demat account will be
opened.

ACCOUNT MODIFICATION
16. Can any information submitted at the time of opening a demat account be
modified at a later date?
Yes. Except names of the account holder(s) and type of the account, all other
information, such as address, bank details and date of birth can be modified. As
per recent SEBI guideline change in name of account holders, due to any of the
following reasons is permitted;

 Change in name on account of marriage

 Change in name on account of reasons other than marriage
 Change in father’s name
In all cases given above appropriate documentation has to be provided by the
account holder.

17. What procedure should be followed for account modification?

An account modification form duly signed by the account holder(s), along with the
required documents as proof for the modification, has to be submitted to the DP,
who will verify the request and carry out the modifications in the depository
system.

18. In case of a joint demat account can a joint holder independently ask for
account modification?
No. For a joint demat account, account modification form has to be signed by all
the joint holders.

19. If one of the joint holders expires, Can name of the deceased account holder
be deleted from the account?
No. If one of the joint holder expires, new demat account should be opened in the
name of surviving joint holders and securities from the previous account should be
transferred to the new account.

20. Can joint holder names be added / deleted from a demat account?
 No. Once a demat account is opened addition / modification / deletion of account
holder names is not permitted.

21. Can securities of different companies be held in one demat account?

Yes. Securities of different companies can be held in same demat account.

22. Does a BO have to keep any minimum balance of securities in his demat
account?
A demat account can be opened and maintained even with nil balance.

23. Can holdings in a single holder account be transferred to a joint holder

account?
Yes. Securities can be transferred from a single holder account to a joint account
or vice-a-versa.

24. How does a BO get information that his account has been updated after
each transaction?

a. DP sends to BO a statement of transactions and balances at least once every

month, even where a single transaction has taken place during the month.
The statement can be sent more frequently, if so desired by BO.
b. A BO can find out up-to-the-moment status of his account anytime, any-where
by using CDSL’s internet based facility 'easi' . The BO has to register for easi
through his DP. The transaction details are updated immediately.
c. A BO can also get details of debits, as well as IPO/ corporare action credits to
the demat account and any changes effected in POA holder, signature,
nomination address, mobile number directly from CDSL by registering to
'SMART’, the SMS alert facility of CDSL.

25. What happens if a BO loses his statement of holdings?

The BO should inform the DP about the loss of the statement of holdings and
request for the issue of a duplicate statement.

26. Do all DPs have access to account details of all CDSL BOs?
No. A DP cannot access the BO accounts of any other DP. It can have access
only to those demat accounts which are serviced by it.

HUF ACCOUNTS

27. What do you mean by HUF account?

HUF stands for Hindu Undivided Family. It is a demat account opened for
managing securities of a family. The account is managed by a 'Karta' who is a
male member of the family and other members of the family are termed as 'Co-
parceners'. Karta manages the HUF account on behalf of the Co-parceners.

28. In whose name HUF account is opened?

A HUF account can be opened in the name of the
 HUF entity as it appears on the HUF PAN card, such as A B C & SONS
HUF
  Existing Karta
 Deceased Karta

29. Whether the HUF account can be opened with joint holder(s)?
No. HUF accounts cannot be opened with joint holder(s).

30. Whether nomination can be recorded for a HUF account?

No. HUF accounts cannot appoint a nominee.

31. Who will sign the account-opening form of HUF?

The Karta should sign the account-opening form under the HUF stamp.

32. Whether HUF account can appoint a POA?

Yes. POA can be appointed for an HUF account.

33. Who will sign the POA in case of HUF?

The Power of Attorney (POA) document should be signed by the Karta of the HUF
and all the co- parceners.

34. Can a Power of Attorney holder open an HUF account?

A Power of Attorney holder cannot open a HUF account.

35. Whether we have to open the new demat account in the event of death of
Karta?

HUF is an entity and it does not come to an end in the event of death of the Karta.
In such a case, the members of the HUF will appoint the new Karta.

36. What is procedure can be taken to appoint a new Karta in the event of death
of the existing Karta?

Following is the procedure to be followed in the event of death of karta:

 HUF, being a Hindu Undivided Family, the property of the family is

managed by the Karta,
 The new Karta shall submit the new list of co-parceners and a no objection
signed by the surviving members of the HUF for him to act as Karta of the
HUF.
 The new Karta will submit an account modification form to the DP and
record change in signature of the new Karta to operate the account.
 The previous account need not be closed and the same account can
continue.

NRI ACCOUNTS

40. Who is a Non-Resident Indian [NRI]?

 A Non-Resident Indian [NRI] means a person who resides outside India, who is a
citizen of India or is a 'person of Indian origin'.

41. Who is a 'person of Indian origin' (PIO)?

'Person of Indian Origin' (PIO) means a citizen of any country other than
Bangladesh or Pakistan, if
a. at any time he had held Indian passport; or
b. either of his parents or any of his grandparents was a citizen of India by virtue
of the Constitution of India or the Citizenship Act, 1955; or
c. the person is a spouse of an Indian citizen or a person referred to in sub-
clause [a] or [b]. Investment by PIO in Indian Securities is treated the same
as the investment by non-resident Indians and requires same approvals and
enjoys the same exemptions.

42. Where can an NRI/PIO open a demat account?

NRI/PIO can open a demat account with any Depository Participant [DP] of CDSL.
The NRI/PIO needs to mention the type [‘NRI' as compared to 'Resident’] and the
sub-type [‘Repatriable' or 'Non-Repatriable’] in the account opening form collected
from the DP.

43. Does an NRI need any RBI permission to open a demat account?
No permission is required from RBI to open a demat account. However, credits
and debits from demat account may require general or specific permissions as the
case may be, from designated authorized dealers.

44. If NRI/PIO desires to make investments under different schemes, can he

hold all such securities in a single demat account?
No. Securities received against investments under 'Foreign Direct Investment
scheme (FDI)', 'Portfolio Investment scheme (PIS)' and 'Scheme for Investment'
on non - repatriation basis have to be credited into separate demat accounts.
Investment under PIS could be on repatriation or non - repatriation basis.
Investment under FDI scheme is on repatriation basis.

45. Does an NRI require RBI permission for dematerialization / rematerialization

his securities?
No special permission is required for it. Holding securities in demat only
constitutes change in form and does not need any special permission. However,
only those physical securities which already have the status as NR - Repatriable /
NR - Non-Repatriable can be dematerialized in the corresponding demat
accounts.

46. Can securities purchased under repatriable and non-repatriable category be

held in a single demat account?
No. An NRI must open separate demat accounts for holding 'repatriable' and 'non-
repatriable' securities.

47. In case a non-resident Indian becomes a resident in India will he be required

to change the status of his holding from Non-Resident to Resident?
Yes. It is the responsibility of the NRI to inform the change of status to the
 designated authorized dealer branch, through which the investor had made the
investments in Portfolio Investment Scheme and the DP with whom he/she has
opened the demat account. Subsequently, a new demat account in the resident
status will have to be opened, securities should be transferred from the NRI demat
account to resident account, and then the NRI demat account should be closed.

III. NOMINATION FACILITY

1. Is Nomination facility available for Demat Accounts?

The nomination facility is available for demat accounts. It is advisable for all
individual BOs to avail this facility. SEBI has mandated that if an individual BO
decides not to nominate, then the account holder(s) should give a written and
signed declaration to that effect.

2. Who can appoint a Nominee?

All individuals including NRIs and Foreign Nationals having/opening demat
accounts can either singly or jointly appoint a nominee. If the account is held
jointly, all the joint holders are required to sign the nomination form.

3. Who can be appointed as a nominee?

Only an individual can be appointed as a nominee. Non-individuals entities, such
as trust, corporate, HUF, AOPs, etc. can not be appointed as a nominee.

4. How many nominees can be appointed for a demat account?

Only one individual can be appointed as a nominee for a demat account.

5. Can the nomination given once be changed / deleted?

Yes. Nomination once given can be changed / deleted as and when required by
submitting the prescribed form duly signed by all account holders to the
Depository Participant (DP).

6. What is the procedure to appoint a nominee?

The Account holder(s) is (are) required to fill a standard nomination form available
with the DP. The nomination form has to be signed by two witnesses. If the
account is a joint account, the nomination form should be signed by all account
holders. A witness cannot be appointed as nominee.

7 Can a minor be appointed as a nominee?

Yes. A minor represented by a guardian can be appointed as a nominee.

8. Can nomination be given for a Joint account?

Yes. Nomination can be given for a joint demat account also. But only one
nominee can be appointed for all the account holders of the demat account. Each
of the joint holders can not appoint separate nominee.

9. Who cannot nominate?

Non-individuals, such as societies, trusts, body corporate, Kartas of Hindu
Undivided Family and holders of power of attorney cannot make a nomination.
10. Can an NRI be appointed as nominee?
Yes. An NRI can be appointed as a nominee.

IV. POWER OF ATTORNEY

1. What is Power of Attorney (POA) in demat scenario?

Power of Attorney is the authority given by a demat account holder to some other
entity to operate his demat account.

2 Is POA mandatory to open a demat account?

No. POA is not mandatory to open a demat account.

3. Who can be a POA holder?

POA holder can be an individual or a corporate entity also.

4. What are types of POA?

The POA can be
 General purpose POA, i.e., the POA holder can perform all activities on
behalf of the original holder(s)
 Specific purpose POA, i.e., the POA holder can perform only certain
operations as specified in the POA.

5. Is there any specific format for execution of POA?

The format of POA depends upon the intention of the powers being given to the
POA holder.

6. Can Power of Attorney (POA) be given for a joint demat account?

Yes. POA be given by holders of a joint demat account. All the holders may give
POA to a single entity, or each holder may give POA to a separate entity.

7. Should the Power of Attorney (POA) be notarized?

Notarization of POA is at the discretion of the DP.

8. Can the BO submit a copy of POA?

Yes. A copy of the POA document submitted should be certified as a "TRUE
COPY" by the BO(s).

9. Can Multiple POAs be given by the same holder?

Yes, the same holder can give Multiple POAs.

10. Can BO himself give instructions when POA exists?

Yes.

11. Can POA close a demat account?

No. POA holder cannot close the account.

12. Can POA holder give nomination instruction to the DP?

 No. POA cannot give nomination instruction.

V. DEMATERIALIZATION OF SECURITIES

1. Is dematerialization of securities compulsory?

According to the Depositories Act, 1996, an investor has the option to hold
securities either in physical or electronic form. A part of holding can be in physical
form and another part in demat form. However, SEBI has notified that settlement
of market trades in listed securities should take place only in the demat mode.

2. What type of instruments are available for demat at CDSL?

All types of equity/debt instruments viz. Equity shares, Preference Shares, Partly
paid shares, Bonds, Debentures, Commercial Papers, Certificates of Deposit,
Government Securities (G-SEC) etc. irrespective of whether these instruments are
listed / unlisted / privately placed can be dematerialized with CDSL, in case they
have been admitted with CDSL.

3. What is the procedure for dematerialization?

Following steps have to be followed by a BO to dematerialize physical securities:

 A BO who wishes to dematerialize securities held by him in physical form

has to submit duly filled and signed demat request form (DRF) to his DP.

 A separate DRF should be filled up for free securities and lock-in

securities.

 DP will verify the details and setup demat request in the system. The DP
will then deface and mutilate the certificate and send the same along with
the DRF to Issuer/ RTA. On confirmation by the Issuer/ RTA, the BO’s
account will be credited with the number of securities dematerialized.

4. What happens to the physical certificates after they are dematerialized?

After dematerialization, physical certificates may be retained / destroyed by the
Issuer / RTA.

5. After submitting DRF form and certificates to the DP, within how many days
the dematerialization take place?
As per regulations in force presently, the dematerialization process should be the
completed within 15 days of receipt of physical certificates by the Issuer/RTA.

6. If the demat request is not processed within the stipulated time, what do I
do?
Contact your DP to look in the delay. A BO can also inform the Investor
Grievances department of the Depository to look in the delay.

7. Is it compulsory to mention the ISIN of the security while filling up the DRF
(Demat Request Form)?
Yes, the ISIN of the security should be mentioned in the DRF to ensure that the
correct security is dematerialized. If, however, the investor does not know the
 ISIN, the same can be obtained from the DP or from CDSL's website,
www.cdslindia.com.

8. Is transfer deed required for dematerializing physical certificates?

No. There is no need to fill in a transfer deed. The physical certificates have to be
accompanied by a DRF, which can be obtained from the DP.

9. Can a BO hold his securities partially in physical and partially in demat

form?
Yes, part of the BO's holdings can be held in physical form as per the choice of
the investor. Though it is advisable to have the entire holdings held in demat mode
so that the holdings have liquidity, as and when available. it should be noted that
part dematerialization of holdings in a single physical certificate is not allowed.

10. Can a sole holder of the share certificate, add any name as a joint holder at
the time of dematerializing the share certificate?
No. It is not possible to add any name while dematerialization of a share
certificate. If the shares held in single name are intended to be held in any joint
account, they have to be transferred to such names before they are
dematerialized. Alternatively, such shares can be dematerialized first in the demat
account in the single name and then transferred to the demat account in the joint
names, or vice-versa, through an off-market transaction.

11. If securities of a company are not admitted with CDSL, what should an
investor do to get his physical shares dematerialized?
In such a case, the investor should request the company to have that security
admitted with CDSL, and once that is done he can get his physical shares
dematerialized.

12. Can securities in odd lots be dematerialized?

Yes. In demat mode securities in odd lots can be dematerialized.

13. Do dematerialized securities have certificate number, distinctive range

number or certificate numbers?
No. Dematerialized securities do not have any distinctive or certificate numbers. In
demat all securities are fungible, which means that any share of an ISIN is similar
to any other share of that ISIN.

14. Can electronic holdings be converted back in physical certificate form?

Yes. It can be done through Rematerialisation, which is the process of converting
electronic holdings back into physical certificates. Refer FAQs on
Rematerialization for details of the process.

15. Is there any charge for dematerialization of physical certificates?

CDSL does not levy any charge for dematerialization of securities. However, DPs
may collect dematerialization charges towards postage / courier charges, etc., as
per their tariff sheet.

16. Can debt instruments and government securities be dematerialized in the

 same demat account?
Yes. Debt instruments, mutual fund units and government securities can also be
dematerialized in the same demat account where equities are held.

17. Can commodity warehouse receipts be dematerialized in the same demat

account?
No. A separate demat account has to be opened for holding warehouse receipts.

18. What is Transposition-cum-demat?

Transposition-cum-demat facility enables an investor to transpose names of the
joint holders in desired order along with the process of dematerialization of
certificates. Transposition-cum-dematerialization facilitates dematerialization of
certificates held in different order of names through one demat account, provided
the securities to be transposed are held in the same joint names, but in a different
order.
Illustratively, if A owns a security, which he holds in the joint names of ABC, ACB,
etc., he can first transpose them in the name of, say, ABC in which order demat
account might have been opened. No new name can be added through
transposition process. Similarly, existing names cannot be deleted.

19. What procedure should be followed by the BO for transposition-cum-

dematerialization request?
The BO should submit his application in Transposition Request Form (TRPF)
along with the Demat Request Form (DRF), and the share/securities certificates to
his DP. It should be noted that a separate TRPF would have to be filled for each
ISIN.

20. Whether a separate TRPF should be filled for each combination of names?
No. Different combination of names can be listed in separate boxes in section (c)
of the TRPF. If the space provided in the TRPF is not found sufficient, a separate
form or an annexure may be used.

21. What are the requirements for availing the transposition-cum-demat facility?
The application for transposition should contain only those names in which the BO
account has been opened. Signatures of all the holders affixed on TRPF should
tally with the DP's records.

22. Does CDSL collect any additional charge for entertaining transposition-cum-
demat requests?
No. CDSL does not collect any fee from DPs for processing transposition-cum-
demat requests.

23. What is transmission?

Transfer of electronic balances in a BOs account to successors / nominees in
case of sole holder account and to the account of surviving joint holders in case of
a joint account is called transmission.

24. What is the significance of transmission in demat?

Certificates held in joint names have to be dematerialized in a demat account in
 the name of joint holders only. If one (or more) of the joint holder(s) expires before
the certificates are dematerialized, the surviving holder(s) need not send the
certificates to the issuer to change the names on the share certificates. Such
certificates can still be dematerialized in the existing account. In such situation the
BO can use the transmission - cum - demat facility offered by CDSL.

25. What procedure should be followed by the BO for transmission-cum-

dematerialization request?
The BO should submit Original / or a copy of the death certificate of the deceased
holder(s) notarized/attested by a gazette official, and a Transmission Request
Form (TRF) along with the Demat Request Form (DRF) and the share/securities
certificates to his DP for each demat request.

VI. SETTLEMENT OF SECURITIES IN DEMAT MODE

1. What is settlement?

Investors buy / sale securities on stock exchange platform by placing buy / sale
orders through their brokers. This process is referred to as trading and is carried
out by stock exchanges within a specific period called as trading hours.

After the trading is activity is completed, the process of delivering securities by the
seller and delivery of money by the buyer is called payin-process. This activity also
has to be conducted within a specified time frame. After the pay-in is over, then
starts the process of payout wherein the buyer will get shares and seller will get
money.

The above activities of trading, pay-in, pay-out are collectively referred as

settlement. Each settlement is identified by a unique number called settlement ID.

2. What is the procedure for buying / selling securities through stock exchange
in demat form?
The procedure for buying / selling securities in demat form through a stock
exchange is similar to that of the procedure for buying / selling physical shares.

3. What is the procedure for the delivery of securities in demat mode in case of
sale of securities?
The procedure for deliveries of securities in demat form is much simpler as
compared to the delivery of securities in physical form. In case of sale of
securities, immediately on receipt of intimation of execution of trade from broker,
the seller should issue debit instructions to the DP with whom he maintains his
demat account. Securities can be transferred either directly to the Clearing
Corporation/Clearing House or to the broker's clearing account, as advised by his
broker.

4 What is the procedure for receipt of securities in demat mode in case of

purchase of securities?
A purchaser of securities can give one-time standing instruction to his DP for
receiving the credit of securities in his account. This standing instruction can be
 given at the time of opening of the account or later. Alternatively, a BO may
choose to issue separate receipt instruction to his DP everytime he makes any
purchase of securities.
The securities which the BO has purchased will be first delivered in his broker’s
demat account by the Clearing Corporation / Clearing house. The broker will
subsequently transfer the securities in the BOs demat account. The broker may
give request to the Clearing Corporation / Clearing house to deliver the securities
directly in the BO account.

5. What is an On-Market Transaction?

The On-Market transaction function is used to settle the obligations arising out of
trades executed by the BO on a Stock Exchange, the pay-in of securities is done
through CM pool account (CM Principal Account (For BSE) or CM Clearing
Account (For other exchanges). The available balances in the account are
considered for pay-in.

6. What is an Off-Market transaction?

The off-market transaction function is used to transfer securities between two BO
accounts of CDSL, i.e., Transfer between two BO accounts.

7. What is an Inter Depository transfer?

Any transaction involving receipt or transfer of securities from a BO account in one
depository to a BO account with other depository is termed as an "Inter
Depository” transfer.

8. What is the procedure of giving instructions to the DP for carrying any of the
above transfers?
The BO can execute such transactions by filling up a slip referred ‘Instruction Slip'
and handing over the same to his DP. Since Depository has a facility whereby the
BO can give a 'One time Credit Instruction', also referred to as purchase waiver, a
BO needs to give instructions only for debits to his account, hence the instruction
slip is also referred as 'Debit Instruction Slip' or 'DIS'.
The BOs registered for the CDSL’s online easiest (electronic access to securities
information and execution of secured transactions) facility can use set up / upload
option for transferring their securities from their account using their easiest login.

9. Which type of transaction can be executed through the DIS?

The DIS can be used to give instructions to execute on market transactions, off
market transactions as well as inter depository transfers. Even for credit
instructions (wherever ‘standing instructions’ is ‘no’) also the BO has to give the
DIS Separate DIS has to be used for each type of transaction.

10. Can securities be bought and sold through Depository Participant?

No. Securities can be bought and sold only through a stockbroker. DP facilitates
delivery of securities against a sell transaction or receipt of securities for a buy
transaction.

11. What are the transaction charges in respect of transfer of demat securities?
Transaction charges for each debit in a BO account is levied by the CDSL and
 collected by the DPs. The DPs after adding their mark up, if any, fix a composite
charge which is intimated by them to their clients. As per SEBI guidelines all DPs
are required to publish their tariff structure on the CDSL web site
www.cdslindia.com. Investors can check the tariffs displayed on the web site and
take a decision before opening their demat account.

12. For on market transaction what are the details to be entered on the
instruction slip?
The BO has to enter his Demat account number, ISIN, Quantity to be delivered,
Settlement number and a unique number of their broker called as 'CM ID' on the
DIS. The BO also has to enter exchange name and settlement type on the DIS.

13. How is the Settlement Number indicated on the DIS?

Settlement number has 7 digits, the first 4 digits represent the year, and the
remaining 3 digits represent the settlement number of the exchange on which the
transaction has been executed. In addition to the settlement ID, exchange name
and market type are also to be entered in the DIS.

14. What are the different Market Types for settlements through CDSL?

Stock Exchange SETTLEMENT. SETTLEMENT TYPE

MARKET TYPE DESCRIPTION

BSE 0 Rolling Normal

1 Rolling Auction
6 Company Objection
Auction.
7 Company Objection
13 Offer for Sale
14 MF - Subscription
15 MF - Repurchase
27 MF Subscription - Liquid
29 DFO - Normal Delivery
Based Stock Derivatives
30 AFO - Auction Delivery
Based Stock Derivatives
41 SLB Lend
BSE-SLB 42 SLB Lend Return

44 SLB Lend Return

Auction

CORP BOND 16 Corporate Bond. T+0

 17 Corporate Bond. T+1
18 Corporate Bond. T+2

NSE 0 Rolling Normal

1 Rolling Auction
4 Trade to Trade
5 Retail Debt Market
7 Company Objection
8 Offer for Sale (H)
12 IRF Normal
13 IRF Auction
14 MF - Subscription
15 MFSS Redemption - (U)
19 Liquid Subscription (T0)
NSE-SLB 41 SLB Lend
42 SLB Lend Return
44 SLB Lend Return
Auction

15. What is client level pay-in?

Facility to deliver securities to Clearing Corporation/Clearing House directly from
the demat account of a BO is termed as client level pay-in.

16. What are the benefits of client level pay-in?

Benefits of the client level pay-in are:
 In the present market environment of T+2 pay-in settlement cycle, faster
settlement of securities can be facilitated through client level pay-in.
 Client level pay-in avoids issuance of multiple instructions i.e. first from
client to CM and then from CM to Clearing Corporation/Clearing House.
 Client level pay-in avoids counter party risk associated with the delivery of
securities through an intermediary.
 Last minute credits received in a BO account before pay-in time can be
used for pay-in.
 Part pay-in of securities is possible, thereby reducing losses due to auction,
if any.

17. Does CDSL provide for the client level pay-in?

Yes. CDSL provides the facility of client level 'normal' and 'early' pay-in for both
BSE and NSE settlements.

18. What precautions need to be observed with respect to Instruction Slips?

DPS/BOs should take the following precautions with respect to instruction slips:
  DP should ensure that DIS is always issued as a slip book similar to a
cheque book.
 DP should ensure that instruction slip serial numbers are pre-printed on
each DIS.

 DP should ensure that the demat account number is pre-printed or pre-

stamped on each DIS.
 After the DIS has been filled, strike out remaining blank space to prevent
misuse.
 All details like target account ID, quantity and ISIN to be furnished in the
DIS should be filled in by BO himself.
 BO should use separate DIS for giving On Market / Off Market / Inter
depository transfers instructions. Also for Delivery and Receipt transactions
separate DIS should be given.
 In case of a Joint Account, all the account holders must sign the DIS.
 After the DIS has been filled, BO should submit the DIS in duplicate and
obtain the DP's acknowledgment / receipt stamp on the copy of the DIS and
retain the same in safe custody.
 BO should keep the DIS book in proper custody under lock and key when
not in use. In case of any loss /misplacement of DIS, the same should be
intimated to the DP immediately.
 BO should never sign and keep a blank DIS.
 All the holders must confirm any alteration, correction or cancellation made
on the DIS with their signatures

VII. PLEDGE OF DEMAT SECURITIES

1. What is meaning of Pledge?

If an investor takes loan against securities owned by him, then said securities are
pledged in favour of the lendore Pledge. The borrower is called ‘Pledgor’ and the
lender is called ‘Pledgee’.

2. Can securities in demat mode be pledged?

Yes. Securities held in demat mode can be pledged. Moreover, procedures for
pledging securities in demat form is very convenient, both for the pledgor and the
pledge.

3. What is the procedure for pledging securities?

Followings are the steps involved in pledging of the demat securities:

a. The pledgor and the pledgee must have BO accounts with CDSL. These
accounts can be with the same DP or with different DPs.
b. The pledgor BO has to fill up the Pledge Request Form (PRF) in duplicate
and submit the same to its DP.
c. On receipt of the PRF from the pledgor , the pledgor's DP will set up a pledge
request in the depository system and a unique Pledge Sequence No. (PSN)
will be generated.
d. The pledge request is available to pledgee’s DP through Depository system.
 The pledgee will have to submit instructions to its DP for the acceptance or
rejection of pledge request by filling up the pledge request form accordingly. If
pledgee has given standing instructions to accept the pledges created in its
favour to its DP, the pledgee need not submit an instruction to accept the
pledge to its DP separately.

e. The pledge gets created on acceptance of pledge request by the pledgee DP.

f. The loan agreement and disbursement of loan is outside the Depository

system. The pledgee is required to inform only the agreement no. in pledge
request form.

4. In physical form pledged shares have to be handed over to the pledgor.

What happens when dematerialized securities are pledged?
When dematerialized securities are pledged, they remain in the pledgor BO’s
demat account but they are blocked so that they cannot be used for any other
transaction.

5. How are the securities unpledged in the depository system after the loan is
repaid?
a. The pledgor has to fill up the Unpledge Request Form (URF) in duplicate
and submit the same to its DP.
b. On receipt of the URF, the pledgor's DP sets an unpledge request in the
depository system using the PSN generated at the time of creating the
pledge. An unpledge request can be for a part or for an entire quantity of
pledged securities.
c. The pledgee's DP has the facility to access the request through Depository
system. Based on copy of URF submitted by the pledge, the pledgee's DP
either accepts or rejects the unpledge request.
d. The securities can also be unpledged by the Pledgee giving duly filled URF to
his DP instructing to unpledge the securities. This facility is called "Auto
Unpledge" where no instruction is required to be given by the Pledgor.

6. How is a pledge invoked if the loan is not repaid ?

The pledgee may instruct the DP to invoke the pledge by submitting Invocation
Request Form’ (IRF). On the execution of this instruction, the securities are moved
from Pledgor’s account to the pledgee’s account. Invocation does not require any
confirmation from the pledgor. Pledgor is informed of the movement of securities
by his DP.

7. Can all types of securities be pledged?

Yes. Technically all types of securities can be pledged. It depends on pledgee to
accept a security for pledge or not.

8. Can lock-in securities be pledged?

Yes. CDSL system permits pledging of lock-in securities. Pledge securities under
 lock-in can be invoked by the pledgee only after the lock-in period is over.

9. Who receives corporate benefits on the pledged securities?

The pledgor continues to remain the beneficial owner of the pledged securities
and will therefore be receiving the corporate benefits during the period of pledge.

VIII. CORPORATE ACTIONS AND IPO

1. What is a Corporate Action (CA)?

Corporate action is a process by which a company gives benefits to the investors
who are holding securities of the company.

2. What are the types of corporate actions?

Corporate actions are classified into two main categories. Cash and Non-cash
corporate actions. Cash corporate action results in investors getting benefits in the
form of cash. Examples of cash corporate actions are payment of interest /
dividend, etc.
Non cash corporate actions result in the investors getting benefits in form of
securities. Examples of non cash corporate action are bonus issue, rights, merger,
split, etc.

3. Who distributes benefits of cash corporate actions?

The issuer / RTA distributes the benefits of the cash corporate actions directly to
the BOs. CDSL is not involved in distribution of cash.

4. Who disburses the benefits of non-cash corporate actions?

CDSL distributes the benefits of non-cash corporate actions in demat form to the
investors who have their demat accounts with CDSL.

5. Who provides the list of investors to the issuer / RTA for a particular
corporate action?

For Cash Corporate action, e.g. dividend and interest payments:

a. CDSL provides the concerned Issuer / RTA list of the BOs, their electronic
holdings as on the record / book closure date.
b. The Issuer / RTA then submit an allotment file to CDSL containing the
details of allotments to the BOs.
c. Based on the said allotment file the securities are credited to the demat
accounts of the BOs by CDSL.
Non-Voluntary / Auto Corporate Action (e.g. Bonus issue, Merger etc.)
a. On the effective date, securities are credited to the demat accounts of the
BOs having balance on the record / book closure date based on the ratio
and the ISINs mentioned by the Issuer / RTA at the time of the set up of the
corporate action in CDSL system.
b. The Issuer / RTA is not required to submit an allotment file.
6. Is the rights issue form sent by the Issuer / RTA or CDSL?
As in the physical segment, the Issuer / Registrar mails the rights form directly to
BOs. CDSL / DP would not be mailing the same.

7. Is there any option for the manner in which non-cash corporate benefits
could be received?
Yes, BOs have the choice of receiving the non-cash corporate benefits either in
electronic or in physical mode. Issuers send intimation directly to the BOs for
ascertaining their choice in this regard. Usually, if the holdings are in demat form
then non-cash corporate benefits are also in demat form.

8. In case of any discrepancy in entitlement of corporate benefit who should

the BO contact?
It is desirable that in case of any discrepancy in cash benefits, the BO should
contact the Issuer / Registrar directly. A BO can also register a complaint with
CDSL in case of discrepancy in entitlement of non-cash corporate benefits.

9. If the holdings are in dematerialized form, will the bonuses / rights against
them be issued in the same form?
a. The Issuer/RTA regularly obtains holdings report on ISIN balances from
CDSL. On the basis of holdings report, the Issuer/RTA issues advice for credit
of bonus/rights shares in the demat accounts.
b. The Issuer/RTA may, if the benefits are being given in the form of securities,
distribute such benefits to the investor through CDSL by crediting them
electronically to the BO account, provided that the newly created security is
an eligible security and has been admitted into CDSL.
c. Where allotment is made in demat form, the Issuer or its RTA sends allotment
advice directly to the BO.
d. Securities credited directly to the BO account will be reflected in the statement
issued by DPs.
e. In case any security is not admitted with CDSL system, the Issuer/ RTA will
distribute the corporate benefit in the physical form.

10. If the BO has holding in physical form, can he receive bonus / rights in the
dematerialized form?
In case holding is in physical form, the BO can choose to receive the rights/ bonus
allotment in the dematerialized form if he informs his intent to receive the
rights/bonus in dematerialized form to the Issuer/RTA.

11. If any investor requests for credit of rights / bonus allotment in

dematerialized form without having a demat account, will CDSL open an
account on its own to provide credit?
No, in such a case the rights/bonus allotment would be issued in physical form
only.

12. Does one get any preference in allotment, if one applies for the issuance of
securities in dematerialized form?
No. The investors who have applied for allotment in demat form are treated on par
 with the investors who have requested for allotment in physical form.

13. In case of holding in electronic form, when will an investor get electronic
credit to his account?
Securities in such cases are credited to the demat account on the effective day
indicated by the Issuer/ RTA, as against time of 15 - 20 days taken in for receiving
securities in physical form, because in such cases certificates have to be printed
and dispatched.

14. Does an NRI require any permission to receive bonus/rights shares?

No.

15. What is an Initial Public Offer (IPO)?

When a company issues securities to the public directly it is popularly known as an
IPO. Credit of securities allotted in IPOs can be directly effected in the investors
demat accounts.

16. Is it possible to get securities allotted in IPOs directly in demat form?

Yes, it is possible to get securities allotted in IPOs directly in demat form. In fact, in
the public issue application form itself, the investor has to mention the BO ID and
name, and the ID of the DP. Any allotment made will be credited into the BO's
account directly and the BO will get intimation to that effect from the company.

17. Is there any specific way in which BOs are required to mention the details of
their demat account numbers in the IPO form?
In case the IPO form provides for 16 digits, the 16 digit BO ID should be entered
by the BO. However, if the form provides for separate fields for DP ID and CLIENT
ID, the first 8 digits are to be entered as the DP ID and the last 8 digits as the
CLIENT ID.
E.g. DPID CLIENT ID
12010100 00003467

18. How does a BO know that the securities allotted through the IPO have been
credited to his demat account?
BOs can verify the credit of the securities allotted to them in the following ways:
a. The RTA would send to BOs the allotment advice regarding the shares
allotted and credited to their demat account.
b. From the statement of account sent by the DP.
c. Through CDSL's Internet facility easi/easiest, if the BOs have registered for
the same.
d. Through SMS alert by CDSL, if a BO is registered for SMS alerts.

19. Who should BOs contact for any query on allotment/ refund relating to an
application made under the IPO?
All queries regarding the IPO should be addressed to the company or the
Registrar and Transfer Agent, whose details are available in the application
form/offer document.
IX. TRANSMISSION OF DEMATERIALIZED SECURITIES

1. What is transmission of securities?

Transmission of securities means transferring ownership of securities to the
nominee / successors / Legal heirs in the event of death of the sole / all joint
holders or to the surviving joint holders in the event of death of one/more joint
holders.

2. What is transmission of dematerialized securities?

Transmission is the process by which securities of a deceased account holder are
transferred to the account of his legal heirs / nominee. Process of transmission in
case of dematerialized holdings is more convenient as the transmission formalities
for all securities held in a demat account can be completed by submitting
necessary documents to the DP.

3. In the event of death of the sole holder how should the successors claim the
securities lying in the demat account?
The claimant should submit to the concerned DP an application with Transmission
Request Form (TRF) along with the following supporting documents:
a. Original or a copy of the death certificate notarized/attested by a gazette
official in case of death of the sole holder where the sole holder has appointed
a nominee.
b. In case of death of the sole holder, where the sole holder has not appointed a
nominee
(i) original or notarized / attested copy of the death certificate.
(ii) Succession certificate / Probate of the will /Letter of administration

The DP after ensuring that the application is genuine will transfer securities to the
account of the claimant.

4. If a successor is not able to provide either the succession certificate /

Probate of the will / Letter of administration, then what is the way to get the
securities transmitted?
If value of the securities in the deceased BOs account is less than Rs. One lac,
transmission can still be carried out by providing following documents.
a) Transmission Request Form
b) Original or Copy of the death certificate of the deceased BO duly notarized or
attested by a Gazetted Officer.

c) Any one or more of the following documents:

 Letter of Indemnity executed by the applicant(s) on non-judicial stamp
paper of appropriate value, duly notarized
 An Affidavit from the applicant executed on non-judicial stamp paper of
appropriate value and notarized
 No objection certificate [NOC] from all legal heir(s) who are not applicants
conveying no objection to the transmission of the relevant securities in
favour of the applicant(s).
 As an alternate to NOC, copy of Family Settlement Deed duly notarized or
 attested by a Gazetted Officer and executed by all the legal heirs of the
deceased BO, provided that:

The Family Settlement Deed clearly vests the securities in favour of the
person seeking transmission in his/her name. Vesting of securities in favour of
the person seeking transmission in his/her name is not contingent upon any
other onerous conditions in such a Family Settlement Deed.

Note: If the division of shares as per the Family Settlement Deed is amongst
more than one person, then the Family Settlement Deed can be considered
as an NOC for transmission of shares to each legal heir applying for
transmission.
5. What is the procedure of transmission in the event of one or more account
holders in a joint demat account?
In such case the surviving holders of the account have to submit following
documents to the DP:
 Transmission request form
 Original or a copy of death certificate of the deceased account holder(s) duly
notarized or attested by a gazetted officer.
 Client master report of the demat account in the name of the surviving
holder(s)
The DP, after verifying the documents submitted, can set up a transmission
request and transfer the securities to the account held in the name of surviving
holder(s).

6. What exemptions are given from obtaining the documents for opening a new
account in favour of surviving joint holders with the same DP?
Following exemptions are given from obtaining the documents in case a new
account is opened in favour of surviving joint holders with the same DP:
 The surviving joint holders need not enter into agreement if the new account is
opened with the same DP.
 The address proofs obtained at the time of opening an old account for
permanent address and correspondence address can be considered, while
opening a new account if the 1st holder of the new account is same as the old
account.
 The SMART registration form submitted during the opening of an old account
can be continued provided the 1st holder of the account is same.

X. REMATERIALIZATION

1. What is rematerialization?
Rematerialization is the process of converting securities held in an electronic form
in a demat account into paper form, i.e., physical certificates.

2. What is the procedure for rematerialization?

 A BO who wishes to have his dematerialised holdings of securities

rematerialized has to submit duly signed Rematerialization Request Form
 (RRF) to his DP. RRF can be signed by the POA holder also if any POA has
been given. The POA must be registered with the Issuer/RTA
 On verification of the form, DP will generate the remat request in the system
and will send it to Issuer/ RTA. On confirmation by the Issuer/ RTA, the
balance will be debited from BO’s demat account.

 The Issuer/ RTA then issues securities in physical form to the BO directly.

3. Is it possible to rematerialize lock-in securities held in a demat account?

Yes. Lock-in securities in a demat account can be rematerialized. If a BO has free
as well as lock-in securities in his account for an ISIN, then a separate RRF is to
be submitted for rematerialization of both free quantity, and quantity under lock-in
as well. If lock-in balance is for different lock-in reasons, or of different lock-in
expiry dates, then a separate RRF is to be submitted for each lock-in reason /
lock-in expiry date combination.

4. In case of request for rematerialization does one get back the same
certificate(s) that was dematerialized?
No. The Issuer / RTA will issue new certificate(s). The new certificate/s may be
issued under new folio number or in the existing folio, if investor already has one
with the company.

5. If the physical certificate issued on rematerialization has some mistake in

the name or any other details, who should the investor contact?
The Issuer or RTA, as the case may be.

6. Does the rematerialization attract any stamp duty?

No. Remat does not amount to a transfer and does not attract any stamp duty.

XI. ELECTRONIC ACCESS TO SECURITIES INFORMATION (easi)

1. What is easi?
Easi (electronic access to securities information) is a convenient, easy to operate
internet based facility, which allows registered Beneficial Owners (BOs) and
Clearing Members (CMs) to access their demat account through internet to check
the details of their holdings / valuation and transactions, corporate
announcements, anytime/anywhere, through CDSL's website www.cdslindia.com.

2. What are the benefits of easi to BOs?

 Viewing and printing details of holdings and/or transactions for last 7 days in
their account
 Viewing and printing the valuation of holdings in their demat account based
on the previous day's closing price
 Viewing multiple demat accounts through a single login ID
 Monitoring corporate announcements related to the securities, held in their
demat account. A BO also has the additional option to add upto 25 ISINs
not held in their demat account to monitor corporate announcements for
such ISINs.
3. What are the benefits of easi to CMs?
 Viewing and printing of holdings of the securities held in their settlement
accounts along with the valuation as per the previous days closing price
 Viewing and printing the status of their transactions and also the pay-in and
pay-out positions along with the shortages (DP89) for any given settlement
 Downloading holding and/or transaction details to update their back office
 Monitoring corporate announcements for the securities, held in their demat
accounts. A CM also has the additional option to add upto 25 ISINs not held
in their demat account to monitor corporate announcements for such ISINs.

4. Can all BOs/CMs use this facility?

Yes, this facility is available to all BOs/ CMs.

5. What is auto registration?

When a new account [BOID] is activated in the CDSL system with a valid email ID
then a log-in for "easi" will be created for the BOID automatically. The 16-digit
BOID would be the initial "log-in ID". The BO will receive an email of auto easi
registration from CDSL (on the email ID entered in the CDSL system), informing
him of the "password" for the "easi" log-in.

6. What is the procedure a BO should follow on receipt of email for auto

registration?
The BO is required to click on the link sent in the email and complete the
registration process. The 16-digit log-in ID may be changed by the BO as per his/
her choice. It should be noted that the BO will be permitted to change the log-in ID
only once, at the second screen displayed to the BO, when the BO logs in for the
first time. On initial log-in, a prompt to change the password will be displayed and
the BO would then be required to change the existing password given in the email
sent by CDSL.
7. For how many days the password received in the auto easi registration
email is valid?
The password received in the auto easi registration is valid till 03 months from the
date of email. If the BO forgets to register within the stipulated time period, then he
can register for easi online through www.cdslindia.com.
8. What is the procedure to register online for easi?
If a BO wants to register for CDSL’s easi facility he/she needs to follow the
procedure as mentioned below for online registration:

 Log on to CDSL’s website www.cdslindia.com through internet explorer.

 Click on “New Easi User” option available in ‘login to-My easi’. Link available
on the homepage of CDSL’s website
 Enter 16 digit BOID (Demat A/C No.) as login name
 Enter PAN followed by first four digits of date of birth (PAN + DDMM) as
password
 Click on “Go”
  The system will ask to change the username and provide certain other details
(For example-email ID, mobile no. etc.)
 On completion of the registration process, the system will ask to change the
password.

9. What has to be entered as date of birth in case of HUF, CM or Corporate BO

while registering for easi?
In case of HUF, CM or Corporate BOs, date of incorporation (DDMM) has to be
entered as date of birth.

10. What if while doing on-line registration for easi, the system shows an error
as “Invalid Date of Birth” or “Invalid PAN” or “Invalid Login name”?

The details entered by the BO at the time of on-line registration are checked
against the details present in the CDSL system; hence if the system is showing
anyone of the above errors while doing online registration the BO has to approach
his DP to know the correct details entered in the CDSL system to carry out the
registration process successfully.

11. If a BO is not aware of his/her BOID then whom should he/she contact?
BOID is Beneficial Owner Identification Number or Demat Account Number which
is of 16 digits consisting of 08 digits DP ID and 08 digits Client ID. A BO has to
approach his/her DP (with whom a demat account is opened) to know the demat
account number.

12. If a BO has forgotten the username and password for his/her easi login,
what is the procedure to obtain the username and password?
The BO can obtain the user name from his DP. If the BO has forgotten the
password then the same can be reset through “forgot password” link. The BO has
to give either, login ID or BO ID and PAN/ mobile no. or email ID for resetting the
password.
After resetting the password, the new password will be sent on the registered
email ID for easi login.

13. Can a BO change/modify username after registration?

No, the BO cannot change/modify the username (login name) after registration.
He/she can set the username (login name) only once at the time of registration.

14. How many accounts can a BO can map in one login?

The BO can map 08 additional accounts with one login, which means the BO can
avail easi facility of 9 accounts with one login.

15. Should a BO map the additional BOIDs only during registration for the first
time?
The BO can either map the additional 8 BOIDs during registration for the first time,
or as and when required. The facility to add or modify the grouping is provided
through “edit grouping” option. Please note that the form generated during
grouping has to be submitted to respective DPs for authentication. On
 authentication by the DP, the grouped accounts will be viewed in the login.

16. How can a BO view his/her demat account holdings?

To view demat account holdings, go to our website - http://www.cdslindia.com,
click on login to “my easi”, enter login ID (username) and password and click on
<Login>.

17. What should a BO do if he/she is facing problem while viewing demat

account details?
Our easi facility is more compatible with Internet Explorer 7.00 and above versions
and details can be entered/ viewed without disturbances. Further, a BO is required
to download the silverlight and if the BO is facing problem in downloading silver
light software, then he/she can install the latest Microsoft Silver light component
software from http:// www.micrsoft.com/silverlight/, for further assistance. The BO
may also refer to the following link on CDSL’s website
https://www.cdslindia.com/help.html.

18. Can a BO edit his/her profile like email ID/ telephone number, etc.?
Yes, BO can do the modification of his/her email ID / telephone number, etc.,
through easi login. For doing so, click on the option “edit profile” available on easi
login. The BO can modify security question and its answer, email ID, telephone
number for the easi login. Further, the BO can also send request to DP to change
email ID and telephone number in the CDSL system through “edit profile” option
and has to click on ‘Inform DP to change contact details in your demat account’.
BO also has the option to change his mobile number which has been registered
for SMART, further in case if the BO does not want to receive SMS Alert he may
de-register for such alerts if he is a POA client he may be able to de-register only
for the Portfolio valuation.

19. Can a BO monitor corporate announcements for the shares in his/her demat
account through easi?
Yes, a BO can monitor corporate announcements for the securities held in demat
account through easi login. A BO also has an option to add upto 25 ISINs not held
in their demat account to monitor corporate announcements for such ISINS.

20. How to check the status of transactions?

Easi also facilitates checking the status of transactions. To check the status of
transactions, please click on the 'Inquiry' link available in easi login.

21. Can a BO set up/upload transactions through easi login?

The BO who has registered for easi facility cannot set up/upload transactions
through his/her easi login. The facility for online transfer of shares (or online
transactions) is available to BO’s through CDSL’s ‘easiest facility’.

22. If a BO has already registered for easi, how can he/she register for easiest?
The BO who has already registered for easi can register for easiest through
“upgrade BOID to easiest” option available in his/her easi login. The form gets
generated during upgradation process which has to be submitted to the DP for its
authentication.
23. How can a BO register for SMS alerts facility through easi login?
A BO can register for SMS alerts facility through “SMS alerts” option available in
his/her easi login.

24. When the SMS alerts facility will get activated after registration?
After registration for SMS alerts facility, it will be activated at the end of the day.

25. How can a BO modify the details of SMS alerts?

SMS alerts details can be modified through “Modify SMS Alerts details” option in
easi login.

26. How to change the password for easi login?

A BO can change the password through “Change Password” option available in
his/her easi login.

27. Can BO deregister itself from easi?

Yes, BO can deregister itself from easi through “deregister” option available in the
login.

28. Is it possible to register again for easi/easiest after deregistration?

Yes, it is possible to register again for easi/easiest after deregistration.

29. After deregistration, can a BO register again with the previous username?
No, the BO cannot register with the previous username after deregistration. The
BO has to register with the new username.

30. What are the charges for availing ‘easi’ facility?

CDSl has provided the ‘easi’ facility to it’s demat account holder free of cost.

31. Can a BO freeze/unfreeze his/her account from easi login also?

BO has the facility to freeze the demat account from his/her easi login. Further,
the BO also has the option to freeze his/her account partially or full freeze a
particular ISIN also as the option to full freeze his/her account, and also has the
option to freeze his/her account only for debits/ only from the credits or for both
debit and credit.

XII .ELECTRONIC ACCESS TO SECURITIES INFORMATION and Execution of

Secured Transactions (easiest)

1. What is easiest?
CDSL's internet based facility easiest (electronic access to securities information
and execution of secured transactions), permits the BOs to submit off-market, on-
market, inter-depository and early pay-in online instructions from theireasiest login
by using Internet facility from anywhere/anytime.

2. What are benefits of easiest to the BO?

CDSL’s easiest facility permits the BO to upload/set up online transactions. The
BO’s need not submit a DIS(Delivery Instruction Slip) to the Depository Participant
 (DP) for the transactions done through ‘easiest’ login.

3. What is the procedure to be followed by other BOs (CM/BO) to register for

easiest?

The BOs can register for CDSL’s easiest facility by following the below mentioned
procedure:

 Logon to www.cdslindia.com, Click on ‘Login to –My easi’

 Click on ‘Register-easiest user’ option available in the login page.
 Enter your DPID and client ID (your demat account no.)
 The system will ask you to provide a username and enter certain details like
email ID, mobile number and security question.
 When all entries are complete, print/ download the registration form
 Submit the registration form duly signed by all the joint-holders to the
depository participant (DP) for authentication.
 On verification of the details, the DP will activate BO’s login for easiest. The
BO will receive password at his e-mail ID as intimated at the time of
registration.

4. What is to be done in case the registration of the BO for easiest is pending

at DP for authentication?

If the registration for easiest is pending at DP end for authentication, he/she has to
submit registration form to DP for authentication. If the BO has not taken the print
of the form during registration then the same is also available in its email ID
intimated while doing online registration as the forms are sent on the said email
ID. Further, the BO can also ask DP to give a printout of the same. The DP has
the facility to take the printout of the registration forms of their account holders
through their login. The BO can obtain the form from the DP and return the same
to them duly signed for their authentication. After authentication by the DP, BO will
receive the password through the email ID intimated while doing online
registration.

5. Can a BO get the easiest facility for his/her grouped accounts

No, a BO will get easiest facility only to the main account and the grouped
accounts will have only easi facility. In case if the grouped accounts wish to opt for
easiest facility; they have to register for easiest individually.

6. Can a CM get easiest facility for his/her grouped accounts of CM?

Yes, a CM will get easiest facility to his/her grouped accounts of CM Principle and
CM Pool accounts. The early pay-in account will have only easi facility.

7. Can a CM group BSE CM accounts and NSE CM in one login?

No, currently a CM has to map BSE CM accounts and NSE CM accounts
separately i.e. through one login BSE CM accounts and through other login NSE
CM accounts. However, the same is possible after request is submitted to CDSL
in specified format.
8. Can a BO monitor corporate announcements for the shares in demat
account through easiest login?
Yes, a BO can monitor corporate announcements for the securities held in his/her
demat account through easi/easiest login. He/she can also add maximum of 25
more ISINs not held in the demat account to monitor corporate announcements for
such ISINs

9. How to transfer securities through easiest login?

The BO can transfer securities held in his/her demat account through “set up” or
“upload” option available in his easiest login.

10. Can a BO/CM submit multiple transactions through easiest?

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

11. Does a BO/CM still need to submit physical instruction slip (DIS) to the DP
when executing transactions on easiest?
No, a BO / CM who submits instructions through easiest need not give any
instruction slip to their DP.

12. What are the different types of account transfers available on easiest?
There are two types of account transfers available on easiest, i.e., Trusted
Account Transfer and Account of Choice Transfer.

13. Can BO deregister itself from easiest?

Yes, BO can deregister itself from easiest through “deregister” option available in
the login. Deregistration from easiest login has to be authenticated by the DP.

14. If a BO has deregistered from easiest, can he/she register again for easiest?
Yes, a BO can register again for easiest after deregistration, but with the different
login name.
Deregistration of the login ID will be effected by end of the day on which DP
authenticates the deregistration request of the BO.

15. What should a BO do who is registered for easiest facility and wishes to
have only easi(view) rights and not wish to continue easiest facility?
A BO who does not wish to continue with the easiest facility, and wishes to have
only easi facility, can downgrade his/her easiest login to easi through ‘Reassign
login to easi account’ option available in the login.
The result of the BO for downloading easiest login to easi has to be authenticated
by the DP. The BO can continue set up or upload of transactions from his/her
easiest login till end of the day on which the DP authenticates the BO’s request.

TRUSTED ACCOUNT TRANSFER

1. What is Trusted Account?

Trusted Accounts are the settlement related demat accounts of clearing members
CMS/brokers to which a BO wants to deliver securities through easiest.
2. What is Trusted Account Transfer? And who can use the said facility?
Trusted Account Transfer permits transfer of securities from a BO account to the
settlement account of a CM. The BOs can Transfer the securities to settlement
accounts of any FOUR CMs which have been pre-notified by the BO while
registering for the facility. Transactions through the trusted account option can be
set up by an additional Personal Identification Number (PIN), which will be emailed
to the BO separately. That is if any BO opts for the Trusted Account option, he will
receive two separate emails with two separate passwords, one for accessing his
“easiest” login and second for the PIN for authorizing his transactions.

The BOs other than Clearing Members can opt for trusted account facility.

3. What are charges involved in trusted account?

The transactions through ‘Trusted Account’ transfer option are authenticated

through PIN. Therefore, there are no additional charges.

4. Which documents does the BO have to submit to his/her DP for

authentication after registration?

After registration the BO has to submit Easiest registration form duly signed by the
all holders and Declaration letter duly signed and stamped by the Trusted Account
holder to his/her DP for authentication.

5. Can a CM register for Trusted Account facility?

CMs cannot register for Trusted Account facility.

6. Can a BO add/ remove the Trusted Accounts?

A BO can add/ remove the trusted accounts through “Edit Trusted Account” option
available in his/her easiest login.

7. Can the BOs, who have opted for Trusted Account option set up inter
depository transactions?

No. The BOs who have opted for Trusted Account option cannot set up inter-
depository transactions can transfer their scrips to pre-notified CM’s settlement
accounts which are opened in CDSL and grouped to their easiest login.

8. What is the procedure to be followed in case a BO has forgotten the PIN

or PIN gets locked?

If the BO has forgotten the PIN the same can be retrieved through ‘Reset PIN’
option available in the login by answering the security question. In case if a BO is
unable to reset the PIN, then he can request his DP to reset the PIN. .

9. Can a BO change his/her trusted account PIN?

Yes, a BO can change trusted account PIN through “Change PIN” option available
in easiest login.

10. What procedure is to be followed if a BO wants to change the mode of

operation from Trusted Account to Account of Choice option?

A BO can change/modify the mode of operation from Trusted Account to Account

of Choice option through “Modify mode of operation” option available in easiest
login. After authentication by the DP, the BO gets registered for Account of Choice
option.

ACCOUNT OF CHOICE TRANSFER

1. What is Account of Choice Transfer? And who can use the said facility?

Accounts of Choice Transfer permits transfer of securities from one BO account to

any other demat account including the CM settlement accounts. All the on-market,
off-market, early pay in and inter-depository transactions are authenticated by
means of a digital signature (e-token). The BO has to obtain the digital signature
from any of the Registered Authority (RA) of Tata Consultancy Services (TCS).
CDSL is also one of the RA of TCS and provides digital signature at an additional
cost. The CMs will allow to register under “Account of Choice” option in easiest.
Any BO can opt for Account of Choice Facility.

2. What are the charges involved in Account of Choice option?

In Account of Choice option, the transactions are authenticated by means of a

digital signature (e-token). The charges for the application of new e-token issued
by CDSL are Rs.2, 250/- plus service tax. The e-token issued by CDSL has to be
renewed after every 02 years and the e-token renewal charges are Rs.1, 500/-
plus service tax. These charges are subject to change any time without prior
notice. For the charges of the e-token issued by RA other than CDSL, one should
contact respective RA.

3. Who can avail the upload facility?

All BO / CM who have registered for easiest can avail this facility.

4. How to upload transactions through Easiest login?

The BO can upload transactions through “Upload” option available under

‘Transactions’ menu in the BO’s easiest login.

5. In whose login POA (Power of Attorney) link is available?

The POA link is available in CM’s login only.

6. What functions the CMs can execute through POA link?

 The CMs can map/upload/delete POA-BOID links from POA link option.
Please note CMs can upload/map only those POA-BOID links which are active in
CDSL system.
The POA/BOID link mapped through easiest login has to be authenticated by DP’s
easiest login.

XIII. SMART

1. What is the SMART facility?

SMART stands for SMS Alerts Related to Transactions in which the BOs
registered for SMART will receive alerts for all types of debits and credits due to
IPO allotments and corporate actions. The BOs are also sent alerts about certain
modification in their demat account.

2. Is it Mandatory to register for SMS facility?

As per SEBI guidelines, it is mandatory to register for SMS facility to these

accounts where the account holders have given power of attorney to operate their
demat account, registration to SMS facility is mandatory, except in case of
accounts held by non- individuals, foreign nationals and NRI’s.

3. When will I receive a SMART alert?

Presently the alerts are sent every 10 minutes starting from 7 AM to 9 PM on all
working days. If more than three transactions have taken place during the interval,
then details of first three transactions and total number of ISINs debited are given
in the SMS, and for details of other transactions the BO has to contact his DP.

4. How do I avail this facility for my account?

You will have to approach your DP and submit the SMART registration form duly
completed. This can also be downloaded from CDSL’s website
www.cdslindia.com. Alternatively, the BO can also register for SMART facility
through his / her easi/easiest login.

5. Will I receive a SMS alert, if details of demat account are modified?

Yes. SMS alerts are sent as and when any of the following details of a demat
account are modified.
 Correspondence / permanent address
 Signature(s) of account holder(s)
 Bank details
 Nomination details
 Power of attorney details

6. Which category of the BOs will get SMS alerts for debit transactions?
All types of BOs except CMs and Commodity BOs will receive SMS alert for debit
in the account through following type of transactions:

(i) Debit of shares through free transfer of account

(ii) Debit of shares through transmission
 (iii) Debit of shares through on-market or off-market transactions
(iv) Debit of shares through pledge

7. Which type of accounts will receive SMS alerts for credit transactions?
Demat accounts of category Individual, Trust, and HUF BOs will receive SMS alert
credit transactions in the account.

(i) Credit of shares through IPO

(ii) Credit of shares through corporate action/ Auto Corporate Action

XIV. DEBT INSTRUMENTS AND GOVERNMENT SECURITIES

1. What types of debt instruments are available in CDSL for dematerialization?

All types of debt instruments, like Bonds, Debentures, Commercial Papers,

Certificate of Deposit, etc., irrespective whether these instruments are
listed/unlisted/privately placed can be dematerialized if they are admitted in CDSL.

2. Who handles issue management, settlement of trades, distribution of

interest and redemption proceeds to subscribers of Government Securities?

Reserve Bank Of India. (Public Debt Office of RBI).

3. Who are the subscribers to the issue of G-Sec?

The subscribers to G-SECS are mostly banks, primary dealers, non banking
financial companies, financial institutions, PF trusts, money market mutual funds
and corporates.

4. What are the options available to the investor for holding government
securities?

The options available to the investor for holding g-sec are :

a. In the form of physical certificates
b. In the form of book entry, i.e., in the form of credit to an account maintained
by the investor at RBI or any other approved entity. This form is known as
SGL form and the approved entity is known as SGL accountholder/ CSGL
accountholder. (Subsidiary General Ledger account holder/Constituents
Subsidiary General Ledger accountholder).

5. Is CDSL an SGL accountholder?

Yes, CDSL is an SGL accountholder. The BOs can therefore hold, transfer and
transact in G-SEC through their demat accounts held with CDSL through their
DPs.

6. Can all types of debt instrument be held in same demat account?

Yes. All types of debt instrument can be held in same demat account along with
 equity and government securities.

7. How can a BO convert existing physical certificates into electronic form or

how can a B0 holding balances with any other entity e.g. Federal Bank, Axis
Bank, etc., in a book entry form transfer the same to his existing CDSL
demat account?

Conversion/ Transfer can be done through dematerialization process in CDSL.

8. Is partial dematerialization of a physical certificate allowed?

No. Partial dematerialization of a physical certificate is not allowed.

9. Can separate ISINs/loan codes be dematerialized through a single demat

request form for G-sec (DRF-GS)?

No. Separate DRF-GS (Demat Request Form for Government securities) to be

used for different ISINs / loan codes.

10. Can G-sec whose ISIN is not activated in CDSL be dematerialized?

Yes. DP shall be required to inform CDSL the details of the ISIN vide a standard
letter as per the prescribed format for activation of the concerned ISIN.

11. Should the DP deface / mutilate the physical g-sec certificates received for
dematerialization?

The DP should not deface / mutilate the g-sec certificates received for
dematerialization.

12. What is “Value Free Transfer” of G-sec?

The transfer of G-sec held by a BO with some other SGL/CSGL accountholder to

his BO account with CDSL or vice-versa is known as Value Free transfer. Such
transfer does not involve any consideration.

13. Can G-Sec be rematerialized?

Yes. G-sec can be rematerialized in case the BO/investor desires to convert the
government securities held in electronic form into physical certificates or the
securities are to be transferred from SGL account /CSGL account at CDSL to
CSGL account of another CSGL accountholder.

14. What are the charges levied by CDSL for rematerialization?

No charges are levied by CDSL to its DPs for rematerialization of G-SECS i.e. for
transfer from CSGL account at CDSL to CSGL account of another CSGL
accountholder.

15. Is transfer of G-SEC through inter depository permitted?

 No. Since CDSL and NSDL are separate SGL accountholders, transfer of G-sec
from one depository to the other depository is considered to be an inter-SGL
transfer and such transfers are required to be separately reported to the RBI.
Hence, inter-depository transfers of G-SECS are not permitted.

16. Is there any other procedure to transfer G-SEC holdings between

depositories?
Yes. By way of dematerialization and rematerialization, government securities can
be transferred between two depositories. Rematerialization of the concerned
securities in NSDL has to be done and then the same has to be dematerialized in
CDSL after due reporting to the RBI through the reporting system.

17. What is the procedure for transfers of G-SECS between two demat accounts
within the same depository?
The procedure for off-market transfers in G-SECS is the same as for equities and
other securities.

XV. DEMATERIALIZATION AND SETTLEMENT OF WAREHOUSE RECEIPTS

1. Can I hold securities and warehouse receipts (WR) in one demat account?
No. Separate demat account should be opened for holding securities and
warehouse receipts.

2. Is the procedure of opening demat account for holding WR same as that for
holding securities?
Yes, but under a separate account category.

3. Can demat account for holding WR be opened with any DP?

Demat account for holding WR can be opened with only those DPs who have
been empanelled by the respective commodity exchange. Presently, there are
four commodity exchanges in India, NCDEX, MCX, NSEL and ACE Derivatives
are the exchanges that have entered into agreement with CDSL.

4. Who will issue warehouse receipts that can be dealt in CDSL depository
system?
Warehouses, who are empanelled by the above exchanges, have to enter into
agreement with CDSL, exchange and RTA. Only these warehouses will issue
warehouse receipts for dematerialization to holder of commodities.

5. How these warehouse receipts can be dematerialized?

An accountholder will furnish details of the demat account number specifically
opened for dematerialization of the warehouse receipts to warehouse. Warehouse
will intimate CDSL, exchange and the RTA for the credit of warehouse receipts in
the demat account. The RTA will credit the balance using "corporate
action"module of CDSL. The balances so created can be used for transfer to other
commodity accounts within CDSL or for settlement of commodity trades.
6. Is an ISIN number also allotted to commodities?.
Depending on type of commodity, grade, validity-expiry date, name of warehouse
and location exchanges will allot ICIN to each commodities. ICIN for same
commodity differs from exchange to exchange.

7. How to give delivery of warehouse receipts in the depository system?

Similar to securities market, warehouse receipts can be transferred to the Clearing
Member's account using Delivery Instruction Slip (DIS) for the settlement of trades
on exchange. However, warehouse receipts issued for one exchange can not be
used for delivery of trades on other.

8. How to claim delivery of commodities against warehouse receipts credited

in the demat account?
Deliveries of commodities credited in demat accounts by dematerialization of
warehouse receipt can be claimed by submitting "Remat Request Form" to the
DP. The DP will setup rematerialization request in CDAS system and handover
letter / acknowledgement generated by the CDSL system to the BO for producing
the same to respective warehouse. These remat requests will reach the Registrar
electronically through the depository system. The accountholder needs to submit
to the warehouse the acknowledgment given by the DP for the purpose of taking
delivery. Warehouse may deliver the commodity after satisfying itself based on the
details given in the letter / acknowledgement and details of accountholder given by
the Registrar.

9. How to claim delivery of e-Gold, e-Silver after purchase on NSEL?

Deliveries of e-Gold, e-Silver can be taken by transferring the said ICIN to

exchange house account and submitting the surrender request form (available on
NSEL site www.nationalspotexchange.com ) to NSEL.

XVI- BASIC SERVICES DEMAT ACCOUNT

1. What is a ‘Basic Services Demat Account (BSDA)?

The BSDA is a special category of demat account which can be opened by only
individual investors.

2. Can an Investor open more than one demat account under the BSDA
category?

No. Only one account can be opened under the BSDA category, where the
investor is a first / sole holder. Such first /sole holder should not have any other
demat account (under any category) with him/her as the first / sole holder and the
value of the securities held in the demat account shall not exceed Rs. two lakhs at
any point of time.

3. Can an investor convert an existing demat account in to BSDA category?

Yes, provided no other demat account exists in the name of same first / sole
holder and the value of the securities held in the demat account shall not exceed
Rs. two lakhs.

4. Is registration to SMS alerts (SMART) facility mandatory for the BSDA

category accounts?

Yes. SMART registration is mandatory for the BSDA accounts.

5. What Annual Maintenance charge (AMC) will be levied by the DP to the

BSDA category accounts?

As per SEBI directive, the charge structure will be based on value of holdings in
the accounts as indicated below:

I. No AMC shall be levied, if the value of holding is up to Rs. 50,000.

II. For the value of holding from Rs 50,001 to Rs 200,000, AMC not exceeding
Rs 100 may be charged.
III. If the value of holding in such BSDA exceeds Rs. 200,000 at any date, the
DPs may levy charges as applicable to regular accounts (non-BSDA) from
that date onwards.

6. What are the other features of demat accounts opened under the BSDA
category?

Please refer to SEBI circular no. CIR/MRD/DP/22/2012 dated August 27, 2012,
regarding Basic Services Demat account available on SEBI website
www.sebi.gov.in.

I. DP ADMISSION

1. Who can apply for grant of certificate of registration as a depository

participant (DP)?

In terms of Regulation 19 of SEBI (Depositories and Participants) Regulations,

1996, the following entities can apply for grant of certificate of registration as a
depository participant;

 A public financial institution as defined in section 4A of the Companies Act,

1956 (1 of 1956);
 A bank included for the time being in the Second Schedule to the Reserve
Bank of India Act, 1934 (2 of 1934);
 A foreign bank operating in India with the approval of the Reserve Bank of
India;
 A state financial corporation established under the provisions of section 3 of
the State Financial Corporations Act, 1951 (63 of 1951);
 An institution engaged in providing financial services, promoted by any of
the institutions mentioned in sub-clause (i), (ii), (iii), (iv) jointly or severally;
 A custodian of securities who has been granted a certificate of registration
 by the Board under sub- section (1A) of section 12 of the Act;
 A clearing corporation or a clearing house of a stock exchange;
 A stock broker who has been granted a certificate of registration by the
Board under sub-section (1) of section 12 of the Act;

 A non-banking finance company;

 A registrar to an issue or share transfer agent who has been granted a
certificate of registration by the Board under sub–section (1) of Section 12
of the Act.

2. What documents are required to be submitted by an applicant for the

grant of certificate of registration as a depository participant?

An applicant for DP registration should submit the following documents to

CDSL:
 Application for the grant of certificate of registration as a depository
participant in Form E as specified in SEBI (Depositories and Participants)
Regulations, 1996.
 Details of registration of applicant company, its holding company, affiliates /
associates and subsidiaries alongwith certified / notarized copies of
registration certificates;
 List of Directors of the applicant for the last three years and brief Bio-data of
existing directors and copies of PAN cards of applicant company and its
existing directors;
 Shareholding pattern of the applicant for last three years;
 Organization structure of the applicant;
 Board resolution authorizing application for registration as a DP;
 Net worth Certificate and computation of net worth based on latest audited
financial statements in ORIGINAL;
 Audited Financial statements for last three years; Latest audited financial
statements should be certified by Statutory Auditor.
 Updated Memorandum and Articles of Association with a clause of
acting/carrying business as Depository Participant;
 Latest status Report from the concerned stock exchanges in case the
applicant is a stock broker;
 Details of Compliance officer and his/her brief bio-data.
 Details of hardware and software procured for DP operations
 Location of office premises and means of connectivity
 Brief profile of the applicant company including background of the
promoters, existing client base, branch office, if any, etc;
 Internal Control, Risk Control and Operation Manual;
 Undertakings as per the prescribed format;
 Additional Information required by SEBI in the prescribed format.
 Declaration from the applicant for adequate insurance coverage for the safe
-keeping of the documents.

3. What is the minimum net worth requirement for becoming a stock Broker
DP?
The minimum net worth requirement for intending stock broker DP is Rs. 2 crores
calculated in accordance with the formula as prescribed by CDSL.

4. Is net worth certificate required to be provided by the applicant company?

Yes. The net worth certificate is required to be provided by the applicant company
in original based on the latest Audited Financial Statements computed as per the
CDSL prescribed formula and to be submitted on the letterhead of a Chartered
Accountant. Latest Audited Financial Statement should be authenticated by the
statutory auditors.

5. What are the requirements for submission of the list of directors?

The requirements for submission of the list of directors are as follows:

 The list of directors should be submitted on the letter head of the applicant.
 The list should cover the last three financial years and also the list of
directors as on the date on which the application is made.
 The age and number of years of experience should be mentioned
separately for each of the directors, for each of the financial year, and as on
the application date.
 PAN and DIN details should be provided separately. Certified copies of
PAN cards of directors to be submitted along with application.
 The list of directors should be signed by authorized signatory as per board
resolution.

6. What are the requirements for submission of the shareholding pattern?

The requirements for submission of the shareholding pattern as given below;

 The shareholding pattern should be submitted on the letterhead of the

applicant company in original for the last three financial years. Additionally,
the shareholding pattern as on the date on which the application is made
should also be provided.
 The shareholding pattern should be signed by authorized signatory as per
board resolution

7. Is a track record mandatory while making an application to CDSL by the

applicant in the Form E for registration as a participant?

Yes. The applicant company shall be required to furnish information and details of
its business history, which shall be for a minimum period of three years, or from
the date of its inception, if less than three years.

8. What are the disclosures required to be made by the applicant?

The applicant has to provide complete disclosure about the following:

  involvement in any litigation pertaining to the capital market which has an
adverse bearing on the business of the applicant;

 conviction for moral turpitude;

 found guilty of any economic offence;
 Instance of violation or non-adherence to the securities laws, code of
ethics/conduct, code of business rules to which the applicant or its parent or
holding company or affiliate may have been subject to, economic or
criminal liability or suspension from carrying out its operations or temporary
revocation of the registration.
 Dispute related to SEBI, a turnover fee which has been levied by SEBI on
the applicant in the past.

9. What are the various reasons leading to rejection / return of the

application of the applicant?

 Non-disclosure or wrong disclosure of material facts having bearing on the

consideration of the application or disclosure of incorrect material facts or
providing misleading information
 Not fulfilling the admission criteria as per CDSL Bye law
 Net worth below the eligibility criteria for admission as a Depository
Participant.
 Suspension of the SEBI certificate of registration as a member of the
concerned exchange
 The applicant company or its affiliates or subsidiaries found guilty of any
violation / irregularities.
 Lack of capital market related experience.
 SEBI order prohibiting the applicant / affiliates / subsidiaries / directors /
shareholders from accessing the securities market from buying, selling or
dealing in securities market directly or indirectly.
 Not fulfilling ‘fit and proper person’ criteria.

10. Is it mandatory for the applicant to submit a copy of the PAN card?
Yes. The applicant has to mandatorily submit the certified true copy of the pan
card of the applicant company as well as its existing directors.

In case promoter/s is/are company/ies, its latest list of Directors & Shareholding
Pattern and certified copy of latest Audited Financial Statements required.

In case directors of applicant are also acting as directors in other company /

companies, registration details, list of directors, shareholding pattern of those
companies, are to be submitted.

II. FAQ FOR AUDIT & COMPLIANCE

1) Which documents are to be submitted to the CDSL on periodic basis and what are
the due dates?
DOCUMENTS TO BE SUBMITTED TO THE CDSL
Sr. No. Particulars Periodicity Due dates for submitting
 for reports
submission
of reports
1. BO Grievances Report Monthly 10th of the following month
to be submitted
electronically
2. Internal Audit Report and Half yearly 15th May for half year ended
concurrent audit of risk 31st March & 15th
prone areas November for half year
ended 30th September
3. Audited Net Worth Yearly 30th September, after end of
Certificate each financial year.
4. Audited Financial Yearly 30th September, after end of
Statements financial year
5. Submission / Dissemination Yearly On or before 30th April every
of DP Tariff / Charges year or as and when tariff
structure structure is revised
6. Compliance Officer Details If new officer Immediately
is appointed
or any
change in
the office

In case of
change of
Change of Registered registered
7. Immediately
office Address office
address of
the DP

Change of Operational In case of Immediately

office address change of
operational
office
address of
the DP

Change of Name of the In case of Immediately

DP change of
name of
the DP

Change in Directors In case of Immediately

change in
 names of
directors
Change in shareholding In case of Immediately
pattern change in
shareholding
pattern

8 Compliance report for As and when The same is to be

Internal audit/ Inspection received by submitted within 30 days of
the DP the receipt.

2. Are there any other reporting requirements for a DP?

In addition to the above documents / reports which are to be submitted to the
CDSL on periodic basis, every DP upon discovering any loss of securities to
beneficial owner due to negligence or fraud on the part of its employees must
forthwith inform the same to CDSL. The DP also must immediately upon
discovering any loss of securities, instruments or documents relating to beneficial
owners that may have come into its hands in the course of its business, notify the
CDSL , the concerned Issuer or its RTA and BO in that behalf. Further, clause 16
of the agreement between CDSL and DP lays down the events which a DP should
notify the CDSL immediately.

3) How can a stock broker DP monitor the limit prescribed by SEBI on the
aggregate value of portfolio of securities (AVPS) held by its BOs?
SEBI has prescribed that a stock broker DP with a net worth of less than Rs. 10
crores shall ensure that the AVPS of the beneficial owners held through him shall
not exceed 100 times of the net worth of the stock broker.
The CDSL monitors the aforementioned limit for its stock broker DPs on daily
basis and intimates the stock broker DP when the multiple of its AVPS to its net
worth crosses 75 times. The stock broker DP should then take necessary
precautions and /or increase its net worth. When the multiple of AVPS to net worth
crosses 90 times, athe CDSL restrains such stock broker DP from opening new
accounts till the time it brings the exposure below the required limit.

4) Who can conduct internal audit and/or concurrent audit of risk prone
areas of the DPs?

The internal and /or concurrent audit of risk prone areas of the DPs should be
conducted by an independent qualified Chartered Accountant or Company
Secretary in practice. At least one person conducting the internal and /or
concurrent audit of risk prone areas should be either BCCD certified/ NISM DOCE
certified or should have participated in the training programme conducted by the
CDSL. The report should contain a declaration to that effect.
A DP can appoint the same auditor firm for conducting internal audit and
concurrent audit of risk prone areas.

5) Is there any specific format for the report on internal audit and
 concurrent audit of risk prone areas?
The scope and areas to be covered by the internal and concurrent audit of risk
prone areas are specified by the CDSL. Any amendments are informed to the DPs
through communiqué. The DPs may instruct their auditors to follow the current
format prescribed by the CDSL.

6) What are the salient features of the penalty structure of the CDSL?
The schedule of penalties, forming part of the Operating Instructions for the DPs,
lays down the non-compliances for which penalty is levied. The penalty is imposed
for the non-compliance observed irrespective of confirmation of compliance at a
later date for the non-compliances specified under Chapter 11: Penalties
Annexure 11.1 of DP operating Instructions.

7) Whether Power of Attorney (POA) copy needs to be notarized and

stamped?

The POA must be duly stamped. Notarization thereof is left to the discretion of the
DP. In case a copy of the POA document is submitted, the same should be
certified as a “TRUE COPY” by the BO(s).

8) Is PAN mandatory for opening a demat account?

Yes. To open a demat account PAN is mandatory. Obtaining Pan Card details of
all the holders is compulsory for all categories of demat account holder(s). PAN
would be the sole identification number for all participants transacting in the
securities market irrespective of the amount of transaction. Certain categories of
BOs viz Custodian, Governor, President of India, Sikkim Resident, UN
entities/Multilateral Agencies and Deceased Holder have been exempted from
obtaining PAN.

9) Can DP freeze an account of the BO?

A DP can freeze an account of the BO in the following cases:

 The BO has given an instruction for the same, or

 Order from statutory / regulatory authority is received for freezing of an
account.

10) Who sends the statement of account/transaction? Whether a DP can send

the statement of account by email/electronic mode?
It is mandatory for the Main DP to print and dispatch transaction statements directly to
the BOs. Live connected Branch DPs including service centers should not send
transaction statements directly to the BOs. Main DP must maintain record of dispatch of
statements to BOs. DPs can provide Statement of accounts in electronic mode,
provided consent of the BO is obtained for the same. Such statements should be sent
under digital signature (as governed under the Information Technology Act, 2000) of the
DP Official.
11. Whether it is mandatory to send quarterly statement of account to the BOs in
respect of demat accounts with no transactions and no security balances?

For accounts with zero balance and nil transactions during the year, the DPs shall send
one physical statement of holding annually to such BOs and shall resume sending the
transaction statement, as and when there is a transaction in the account.

12) What is the procedure to be followed in case of DIS booklet issued containing
requisition slip does not have the pre-printed serial range number of the booklet
of which it forms a part?
In case the DIS booklet issued by the DP does not contain the requisition slip or in case
the BO has lost the requisition slip, a letter to that effect signed by all the holders shall
be taken for issuance of fresh DIS booklets. In such case, one of the accountholder
should personally come with such letter and with a valid proof of identity. DP should
check the proof identity and keep the same on record and hand deliver the DIS booklet.
In case the account holder cannot come in person, the DIS may be couriered / mailed to
the correspondence address of the BO. The DP should maintain record of dispatch.

13) Whether ADHAR Card is accepted as proof of address?

Unique Identification Number (UID)/ Aadhar Card is accepted as proof of address.

14) Whether minor can nominate in his demat account?

Yes. Since the account of a minor is operated by his guardian, the guardian can
nominate on behalf of the minor.

15) In case of Association of persons (AOP), can the demat account be opened in
the name of Association?
No, the account cannot be opened in the name of Association. As per SEBI circular no.
MRD/DoP/Dep/Cir-09/06 dated July 20, 2006 the account should be opened in the
name of natural persons.

16) Whether account can be opened where First holder is NRI and second holder
is Resident Indian or vice versa?
The DP can open the account where First holder is NRI and second holder is Resident
Indian or vice versa. However, status of the account will be as per status of the first
holder.

17) What should be the Bank account details in case of NRI – Repatriable account
and NRI- Non repatriable account?
In case of NRI – Repatriable account the DP may accept NRE bank account details and
for NRI- Non repatriable account NRO Bank account details. However, if the BO desires
to give the bank account details of his resident account the same can also be accepted
in case NRI- Non repatriable account.
18) Whether proof of address in the name of husband can be accepted as address
proof for the wife and vice versa as the Second holder in the demat account?
Yes. Proof of address in the name of Spouse can be accepted as address proof for the
husband or wife, as the case may be.

19) NRI BO wants to open NRI –Repatriable a/c and he/she wants his/her foreign
address as correspondence & permanent address. Whether the same can be
accepted or he/she needs to give the Indian address as the correspondence
address?
NRI can give foreign address as correspondence & permanent address. SEBI vide its
circular no. MIRSD/SE/Cir-21/2011 dated October 05, 2011 made it mandatory to obtain
foreign address and its proof.

20) Whether Bank Certificate for address of the client can be accepted as address
proof in case of NRI?
Yes. In case of NRIs, authorized officials of overseas branches of Scheduled
Commercial Banks registered in India, Notary Public, Court Magistrate, Judge, Indian
Embassy /Consulate General in the country where the client resides are permitted to
attest the documents.

21) Whether the photocopy of the bank statement not attested by the bank but not
accompanied by a copy of the cheque be accepted as a Proof of Address?
Yes. DP can accept the photocopy of Bank Statement not more than three months old
as proof of address.

22) Whether the bank account details where the first holder in demat account is a
second holder in the bank account can be accepted?
Yes. The DP may accept the same.

23) Demat account is in joint names and supporting documents like pass book
copy are signed by only sole holder. Can we accept these documents for bank
modification based on sole-holder signature on supporting documents?
Yes. In case of modification in bank account details supporting document may be self
attested by the first holder. However, modification request should be signed by all the
holders of demat account.

24) Can the DP charge the BO(s) for sending monthly as well as quarterly
Statement of account/transaction statement?
The DP may charge the BOs for sending physical statement of account on monthly
basis or as specified in O.I. 16.3. However, before revising /charging the BOs for
sending statement of account, the DP should give 30 days’ prior notice to the BOs and
keep the copy of notice and proof of dispatch on record.
25) In calculation of multiple of AVPS to Net worth, the valuation of which
securities are to be excluded ?
Valuation of securities held in accounts with following sub-types is excluded from the
calculation of multiple of AVPS to Net worth of the DP.

Sub type Description

1 Individual-Director

2 Individual-Directors Relatives

5 FI-Government Sponsored FI

6 FI-SFC

7 FI-Others

28 Bank-Foreign

29 Bank-Co-operative

30 Bank-Nationalized

31 Bank-Others

40 Individual-Promoters

41 Corporate Body-Promoter

48 NRI Repatriable – Promoter

49 NRI Non Repatriable – Promoter

50 HUF – Promoter

57 Corporate Body - OCB - Promoter

83 Corporate Body-Foreign body-Promoter

84 Individual Promoters Negative

Nomination

89 Trust - Promoter

90 Foreign National Promoter

26) Whether demat account of Deaf and Dumb can be opened? What are the
precautions to be taken for opening of such a demat account?
YES. DP should follow procedure as per Operating instructions 2.5. for ‘DISABLED
PERSON’.

27) (a) Can QFI avail Nomination facility?

A QFI who is an individual can avail nomination facility.

28) Whether PASSPORT / PAN can be accepted as proof of date of birth to open
minor account?
As per the uniform KYC guidelines issued by SEBI on 5th October 2011, for opening an
account with Depository participant for a minor, photocopy of the School Leaving
Certificate/Mark sheet issued by Higher Secondary Board/Passport of Minor/Birth
Certificate may be accepted as proof of date of birth .

29) Whether Gas Refill voucher/ Cash Memo / Bill not more than three months old
can be accepted as address proof?
Yes. The DP can accept Gas Refill voucher/ Cash Memo / Bill not more than three
months old as address proof.

30) While opening the Sole Proprietor demat account can Proprietorship Firm's
bank details be accepted for bank proof?
Yes. The DP can accept the same.

31) A client is giving Rent/Lease Agreement as a proof of address, but it is not

notarized by Notary Public. Whether the document is a valid proof of address?
As per SEBI circular MIRSD/SE/cir-21/2011 dated 5.10.2011 (Refer comm.2675 dated
7.10.2011), registered Lease/Rent agreement can be accepted as proof of address.
Hence, there is no requirement of Notarizing the same.

32) The demat account was opened in the year 2002. The BO wants to close the
account having securities balance which is under FREEZE Status on account of
non-receipt of PAN CARD. If BO gives a request for transferring the shares to
some other Demat Account, can the request for transfer or closure of account be
accepted?
In case of all accounts the DPs are required to obtain copy of PAN CARD after verifying
it with the original. In case of accounts frozen for want of PAN CARD, the same can be
unfrozen only after obtaining copy of PAN CARD and verifying it with original and with
Income Tax website. The transaction in the account or closure request can be
processed thereafter, on the receipt of appropriate instructions.
IV. INVESTOR AWARENESS PROGRAM

1. What is the duration of the Investor awareness Program (IAP) and the nature of
this program?

It is a total two hours program which includes 90 minutes power point slides
presentation followed by a 30 minutes question answer session.

2. What will be the language of the IAP?

Language of the IAP can be English / Hindi / Marathi / Guajarathi / and any other
vernacular language.

3. What topics will be covered during IAP?

Topics to be covered are: Demat, IPO concepts, Online trading concepts, pay-in and
pay-out procedure, auction, protection-responsibilities of investors, Selection of broker,
contract note, T+2 mechanism, centralized KYC procedure, E-Insurance account, E-
Voting, etc.

4. Any logistics required?

The CDSL will provide Laptop, Projector, screen in Mumbai. For other locations, the
same to be provided by the DP and other associates in the IAP.

5. Will the CDSL distribute any brochures?

Yes. It will distribute Booklets on Demat to the participants.

6. Who will provide for Hall, sound system etc.?

The DP will provide a hall, chairs, sound system.

7. What expenses will be borne by the CDSL?

The CDSL will bear expenses of its officials travelling/lodging/boarding.

8. What way publicity will be done and who will arrange for it?

Pre and post event publicity will be done by the concerned DP by having tie up with a
newspaper. DP has to provide its Logo and text matter to the newspaper for publishing
in the News / advertisement (approx. 2 or 3 insertions). In addition, the DP may arrange
more publicity by inserting hand bills in local newspaper, display of banners/hoarding,
press notes in other local newspapers, message on local cable TV, etc.

9. What is the sponsorship fee payable to newspapers?

Sponsorship fee is payable by the DP to the newspaper in advance by demand draft.
(This can be negotiated with concerned newspaper as it depends upon the location and
differs from newspaper to newspaper).

10. Who will be the audience?

Program should be open to all and NOT only for the existing clients.

11. Will there be any time slot for the DP to speak about its products?

The DP will give 10 minutes presentation/speech about its services.

12. What facility the DP will get at the venue?

The DP will have a stall at the venue where brochures will be distributed. He will display
banners on the stage as well as at the entrance along with the banners of newspaper.

13. Any other requirements?

DP should specifically mention that it is an educational program and no advice will be

given during the program.

14. Who should I contact for more details about IAP?

1. Mr. Chandrashekhar Thakur (Head - Investor Education) on csthakur@cdslindia.com

Mobile number 9820389051.

2. Mr. Ajit Manjure - Manager – Business Development on ajitm@cdslindia.com.

Mobile number 9820674687.

III. SYSTEM ERROR MESSAGES

Most frequently displayed error messages while starting the CDSL system are
explained in this document. Corrective actions to be taken for such errors are given
below with each error message. If the problem continues even after taking the steps
given below, please call CDSL help desk on (022) 2272-8642, 2272-8427, 2272-8624,
2272-8693, 2272-8639, 2272-1261 or 2272-2075. Emails may be sent to:
helpdesk@cdslindia.com.
The messages have been categorized according to the software with which they are
associated.

Contivity VPN software

1. What corrective action do I take when following error messages are displayed
while starting contivity VPN software?

Carry out the steps mentioned for each of the message. If the problem is not resolved
even after following the steps mentioned, contact the CDSL help desk.
“Remote host not responding”
Pl. Check that
 The network at your end is proper. You can check the same using ‘Ping’
Command from your PC to your default gateway IP.
 The “Destination address” is correct by double clicking on contivity icon on your
work station and verifying the IP address displayed at the bottom of the screen.

“Switch log error”

Pl. Check that
1. Whether the username entered in the Contivity login is correct and the letters are
in small case.
2. The password is entered correctly. If incorrect password is entered three times
then the account is Automatically locked.

“Authentication failure error”

Incorrect password is entered three times. In such a case call CDSL helpdesk, i.e. the
CDAS Communication gateway server (CGS)

2. What corrective action do I take when following error messages are displayed
when I try to start the CGS?

If the CGS screen status is shown as “Offline”

1. Check whether you have started connectivity VPN software.
2. Through windows explorer Go to Q:\CGS folder. Double click on file ‘CST ports’
open it with ‘Notepad’ and change the last four digits in both lines with any one of
the values in the range given below and save the file.
 between 6000 to 6007
 between 7008 to 7010
 between 8000 to 8008

3. Delete the Q:\CGS\config folder. After performing the above steps start the CGS
again.
4. Check to see if file in the CGS folder has been marked as ‘read only’. This can
be ddone through windows explorer. If so change the same to ‘'

If in the CGS screen the status is changing between ‘Online’ and ‘Failover’ then
1. Check whether the CGS has been started more than once. If so close all extra copies
of the CGS.
2. If the problem still continues, Change the port in ‘CST port’ file as explained above.

Master Application (CDAS)

3. What corrective action do I take when following messages are displayed while
starting the Master application?
“File Monitor Object Missing”
Double click on ‘My Computer’ icon on your screen and check If there is red cross on
the mapped drive Q:\ then disconnect the mapping of Q:\ and do the mapping again.
“Could not load security information”
Check whether Q:\ is mapped properly as explained above.
“Could Not Connect to Gateway”

1. Ensure that the CGS is started.

2. Check whether IP Address displayed on the CGS screen and displayed by
‘IPCONFIG’ command is same.
“OLE server busy”

1. Press CTRL ALT AND DELETE keys together, click on ‘Task Manager’ in the
window displayed, click on ‘Processes’, in the list displayed, click on ‘Vedasl.exe’
process and click on ‘End Process’. Close the task manager and start the master
again.
2. Restore the Backup of previous day or day before yesterday.

‘OLE link failed’

Check the size of file ‘vedasl.exe’ which is located in C:\winnt\system32 or
c:\windows\system32 with the size of the same file stored in Q:\Misc folder. If the size
does not match, copy file from the Q:\Misc folder to C:\winnt\system32 or
c:\windows\system32folder.
“Initializing file”
Check whether Vedas.ini file is present in the Q:\Exe folder.
Master stop at ‘Registering to CGS’
Close all applications, i.e., Master, CGS, Contivity. Change the port from Q:\CGS
folder\CST ports as explained above and try again.
“Restart the Master”
Close all applications. Shut down your computer. Check the network connections as
explained under contivity above. Restart your computer and try again.
“Master is started on other machine”
Check whether the master is started on another machine with same login.
Check whether Q:\Database folder is present.
“Overflow”
Delete all contents from Q:\Database folder and start the master.
“Disk or Network”
Check if Temp folder is present in the C:\, otherwise create a new temp folder.
Following error messages may be displayed while starting modules in the master
application. Carry out the corrective actions provided. If the problem still continues,
contact the CDSL helpdesk on the numbers mentioned above.
“Executables are missing”
This means some of the executable files (exe) from your Q:\Exe folder are missing.
Restore the exe folder from your backup and start the master again.
“User Security Check Failed”
Contact CDSL helpdesk on numbers mentioned at the start of the chapter.
“Could not load Oracle Directory”
1. Check ‘Orant’ Folder Is Present in the C: Or D:
2. Check if the ‘tnsnames.ora’ file is present in C:\orant\network\admin.
BO Account opening module
“Could not process Ftp”
Start windows explorer. Double click on the Q:, Double click on CGS folder. Double click
on file cgs.cfg and open the file in notepad. Check following Path is present.
EDITOR_PATH=C:\WINDOWS\system32notepad.exe or
C:\WINNT\system32notepad.exe
FTPEXEDIR = C:\ WINDOWS\system32 or C:\WINNT\system32notepad.exe
Contact CDSL helpdesk to correct any errors, if found.
While viewing summary statement
‘Security error’
1. Reinstall the Dot Net Software.
2. Check the security of Dot Net in Administrative tool.
“Could not load report directory”
Check whether RPT folder and REPORTS folder are present in the Q:\. If they are not
present then copy it from latest backup of Q.
“Item not found”
Using Database Administration module, delete the printer settings and reset those
setting with proper syntax.
BO UPLOAD Module
“Type Mismatch”
Copy the Bosign.exe file from Q:\Exe folder and paste it in the C:\winnt\system32 or
c:\windows\system32, folder. Then restart the PC.
If in the Modules of the master application “Security File is missing ” message is
displayed:
Copy Signinq.dll from Q:\Misc folder to C:\Winnt\System32 or C:\Windows\System32
folder, and register it by going in command prompt and entering following commands-
 cd winnt (enter)
 cd system32(enter)
 regsvr32 Signinq.dll(enter)

“Common language debugged”

Check the security by double clicking on the ‘enable CDAS’ icon on your Desktop and
give the full trust to each and every option in Enable CDAS icon or reinstall Dot Net.