NSDL(National Securities Depository Ltd)

NSDL(National Securities Depository Ltd) carries out its activities through service providers such as depository participants (DPs), issuing companies and their registrars and share transfer agents and clearing corporations/ clearing houses of stock exchanges. These entities are NSDL's business partners and are integrated in to the NSDL depository system to provide various services to investors and clearing members.The investor can get depository services through NSDL's depository participants. An investor needs to open a depository account with a depository participant to avail of depository facilities.

It is possible for a clearing member to open a special account in the depository system to settle trades completed on stock exchanges. The clearing account helps the clearing member to get securities from its clients for delivery to the clearing house/clearing corporation and to distribute the pay-out to its customers.An issuer can offer demat services to its shareholders by means of an agreement with NSDL. The clearing corporations/houses of stock exchanges also need to be electronically linked to the depository to enable them to electronically receive and give securities from and to clearing members.


NSDL offers the benefits of a depository system and safety.

Benefits of Depository System

Some of the benefits of the depository system are elimination of bad deliveries, removal of all the risks associated with physical certificates, non-payment of stamp duty, spot transfer and registration of securities, quicker settlement cycle, quicker disbursement of non-cash corporate benefits such as rights and bonus, lower brokerage fee for trading in dematerialised securities, avoiding the handling of huge volumes of paper, regular status reports, complete elimination of problems related to change of address of investor, removal of problems related to transmission of demat shares, removal problems related to selling securities on behalf of a minor and easy portfolio monitoring.

The depository system has various checks and measures to ensure investor safety. Some of them are:

  • A DP starts operations only after SEBI registers it. Registration is based on NSDL's recommendation and SEBI's independent evaluation. SEBI has prescribed a set of criteria for becoming a DP.

  • DPs can debit or credit an account only if they receive valid instructions from their customers.

  • Each day, a system-driven mandatory reconciliation between the DP and NSDL takes place.

  • All transactions are recorded at NSDL Central System and in the databases kept by business partners.

  • NSDL conducts periodic inspections of the activities of both DPs and R&T agents. These inspections include the records based on which the debit/credit are done.

  • All investors have a right to receive their statement of accounts periodically from the DP.

  • NSDL also sends to a random sample of investors a statement of account each month as a counter check.

  • The depository holds the investor accounts on trust. Therefore, if the DP goes bankrupt, its creditors will not have access to the holdings in the name of the customers of the DP. The investors can simply transfer their holdings to an account offered by another DP.