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Administration Manual - B.E.S.T. Undertaking.

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1143<br />

holds moneys of Account holders whereas a Depository holds securities of investors in<br />

electronic form. It works under the framework of The Depositories Act 1996 and is<br />

regulated by Security Exchange Board of India (SEBI) under SEBI ( Depositories and<br />

Participants) Regulations 1996. Around 95% of the total equity market trades are<br />

electronically settled through the Depository. This benefit of paperless trading was<br />

restricted to equity market has now been opened for debt market with the passing of finance<br />

bill 2000.<br />

Reserve Bank Of India vide their letter under reference No.IDMC/PDRS<br />

No.1382/03.64.0022000-01 dated 18.9.2001 have informed to all Primary Dealers and Satellite<br />

Dealers in Government Securities Market to make fresh investment and hold<br />

Bonds/Debentures, privately placed or otherwise, only in Demat form with effect from<br />

31.10.2001.<br />

National Securities Depository Ltd. ( NSDL ) and Central Depository Service ( CDS)<br />

are the two main depositories. NSDL was inaugurated as 1 st Depository in 1996 promoted<br />

by Industrial Development Bank of India (IDBI), Unit Trust of India (UTI), National Stock<br />

Exchange (NSE) with an initial capital of Rs.100/- Crores. They act through various<br />

functionaries as under :-<br />

a) Depository Participant : Depository Participant is an agent of Depository and<br />

investor/broker interact with the Depository through D.P. If an investor wants to<br />

avail of the services offered by a Depository, the investor has to open an A/c with<br />

them. As per Depository ACt 1996, selected entities like Scheduled Banks, Public<br />

Financial Institutions, State Financial Institution, RBI Approved Foreign Bank,<br />

Custodian of Securities and Broker are registered with SEBI, Clearing

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