



























Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
This slides contains the topic of depository system, working of depository system, function of depository system, objectives of depository system,drawbacks of depository system. This notes also includes the pictures and flow charts to understand deeply
Typology: Study notes
1 / 35
This page cannot be seen from the preview
Don't miss anything!
Shiny Salam
Assistant Professor
TKMCAS
Inorder to overcome the various
problems associated with dealing in
physical shares , such as:-
forged transfers.
signature mismatches.
Depository System is also known as
“Scripless Trading System”.
It is an organisation which holds
the securities of a shareholder in the
form of electronic accounts
(dematerialised form), in the same
way a bank holds the money.
A custodian of its clients’ securities.
Interfaces with its investors
A depository participant (DP) is an
agent of the depository who is
authorised to offer depository services
to all the investors.
DP is the intermediary between the
investor and the depository.
A DP has to be registered with SEBI.
A DP is just like a branch of a bank.
An investor can open an account
Type of
ownership
Fungibility
Free
transferability
No stamp duty
Indemnity
against loss
Bank Depository
(^) Holds funds in an account. Holds securities in an account.
Transfers funds between
accounts on the instruction of
the accountholder.
Transfers securities between
accounts on the instruction of
the accountholder.
(^) Facilitates transfer without
having to handle money.
Facilitates transfer of ownership
without having to handle
securities.
(^) Facilitates safekeeping of
money.
Facilitates safekeeping of
securities.
Reduce the
time for
transfer of
securities.
Avoid the
risk of
settlement
of
securities.
Enhance
liquidity
and
efficienc y.
Reduce
transaction
cost for the
investor.
Create a
system for
central
handling of
securities.
Opening an
account
Demateriali
stion
Remateriali
sation
Distributin
g dividend
Closing an
account
Choosing a
depository
participant.
Obtaining the
relevant account
opening form from
the chosen DP.
Getting into an
agreement with the
DP (Client-DP
Agreement).
Obtaining a client
account number or
client ID number.
The process of converting
share certificates or other
securities held in physical
form into electronic form is
called dematerialisation.