{"id":6115,"date":"2022-11-08T12:17:53","date_gmt":"2022-11-08T12:17:53","guid":{"rendered":"https:\/\/commerceiets.com\/?p=6115"},"modified":"2022-11-08T12:17:53","modified_gmt":"2022-11-08T12:17:53","slug":"depositories-act-1996-notes-for-bcom","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/depositories-act-1996-notes-for-bcom\/","title":{"rendered":"DEPOSITORIES ACT 1996 NOTES"},"content":{"rendered":"\n<h4 class=\"wp-block-heading\">Depositories Act 1996 notes : Definitions under depositories act and salient features of depositories act 1996, dematerialization of securities.<\/h4>\n\n\n\n<h3 class=\"wp-block-heading\">QUESTION: Discuss the main features of Depositories Act, 1996?<\/h3>\n\n\n\n<p><strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OR<\/strong><\/p>\n\n\n\n<p><strong>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Write a note on Depositories Act, 1996.<\/strong><\/p>\n\n\n\n<p><strong>Answer: DEPOSITORIES ACT 1996: <\/strong>This Act came into force on September 20<sup>th<\/sup>, 1995 and extends to the whole of India. It is an act to provide for regulation of depositories in and for matters connected therewith and incidental thereto.<\/p>\n\n\n\n<h4 class=\"has-text-align-center wp-block-heading\"><strong>SALIENT FEATURES OF DEPOSITORIES ACT 1996<\/strong><\/h4>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-8-1.png\" alt=\"DEPOSITORIES ACT 1996 NOTES\" class=\"wp-image-6118\"\/><figcaption class=\"wp-element-caption\">DEPOSITORIES ACT 1996 NOTES<\/figcaption><\/figure>\n\n\n\n<p><strong>DEFINITIONS UNDER THE ACT: <\/strong>This act defines the following terms:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Beneficial owner: <\/strong>Means a person whose name is recorded as such with a depository.<\/li>\n\n\n\n<li><strong>Depository: <\/strong>Means a company formed and registered under the Companies Act 2013 and which has been granted the certificate of registration under section 12(1A) of SEBI Act,1992.<\/li>\n\n\n\n<li><strong>Issuer: <\/strong>means any person making any issue of securities.<\/li>\n\n\n\n<li><strong>Participant:<\/strong> Means a person registered under section 12(1A) of SEBI Act 1992.<\/li>\n<\/ul>\n\n\n\n<p><strong>RIGHTS AND OBLIGATIONS OF DEPOSITORIES, PARTICIPANTS, ISSUERS AND BENEFICIAL OWNERS:<\/strong><\/p>\n\n\n\n<p>The depositories Act 1996 features the following rights, obligations, participants and issuers and beneficial owners:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Agreement between depository and participant must be there.<\/li>\n\n\n\n<li>Services of depositories can be availed as per the bye-laws of the company.<\/li>\n\n\n\n<li>Surrender of certificate of security.<\/li>\n\n\n\n<li>Registration of transfer of securities with depository.<\/li>\n\n\n\n<li>Options to receive security certificate or hold securities with depository.<\/li>\n\n\n\n<li>Securities in depositories are to be in fungible form.<\/li>\n\n\n\n<li>Maintenance of register of index of beneficial owners by depository.<\/li>\n\n\n\n<li>Pledge or hypothecation of securities held in depository.<\/li>\n\n\n\n<li>Furnishing of information and records by depository and issuer.<\/li>\n\n\n\n<li>Depository to indemnify the loss in certain cases.<\/li>\n<\/ul>\n\n\n\n<p><strong>ENQUIRY AND INSPECTION PROCEDURES:<\/strong> This Act empowers the Board to call for information or enquiry or inspection in relation to the affairs of the issuer, beneficial owner, depository or participant to ensure no harm to public interest or interest of investors.<\/p>\n\n\n\n<p><strong>PENALITIES: <\/strong>Depositories Act 1996, also describes penalities for various offences. Some of them are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Penalty of 1,00,000 to 1 crore rupees on failure of maintaining the books or accounts as per the manner prescribed.<\/li>\n\n\n\n<li>Penalty of 1lakh to 1 crore on failure of entry into agreement by and depository, participant or issuer.<\/li>\n\n\n\n<li>Penalty from 1Lakh to 1 crore for failure to redress the greivances of the investors within the time specified by the Board.<\/li>\n\n\n\n<li>Penalty of 1lakh to 1crore for delay in dematerialization of securities or delay in issuance of certificates of securities.<\/li>\n\n\n\n<li>Penalty of 1lakh to 1crore in case of failure in reconciliation of records of dematerialized securities with actual securities issued or dealt with by the issuer.<\/li>\n\n\n\n<li>Penalty for failure to comply with the directions issued by Board calls for fine of 1lakh which may extend to 1crore.<\/li>\n\n\n\n<li>Any failure on compliance with board rules or bye laws calls for the fine penalty which may extend to 1crore.<\/li>\n<\/ul>\n\n\n\n<p><strong>OFFENCES: <\/strong>Failure to pay the penalty imposed by the adjudicating officer or failure to comply with his directions or orders will be considered as an offence.<\/p>\n\n\n\n<p>This offence is punishable with the imprisonment of one month which may extend to 10 years or with a fine which may extend to 25crore rupees or with the both.<\/p>\n\n\n\n<p>Where any offence is committed by the company every person who was in-charge at the time of commitment of offence will be found guilty.<\/p>\n\n\n\n<p><strong>APPEALS: <\/strong>Depositories Act 1996 provides for the appeals to securities appellate tribunal against the order Board.<\/p>\n\n\n\n<p>Any person aggrieved by the order of the Board can make an appeal to the Securities Appellate Tribunal within prescribed time, along with copy of the order of the Board and fee prescribed.<\/p>\n\n\n\n<p><strong>POWER OF CENTRAL GOVERNMENT TO MAKE RULES: <\/strong>The central government may by notification in official Gazette, makes rules for carrying out the provisions of this Act. The rules may be made for any matter namely:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Time within which the appeal may be preferred.<\/li>\n\n\n\n<li>Form in which appeal may be preferred.<\/li>\n\n\n\n<li>Procedure for disposing of an appeal<\/li>\n\n\n\n<li>Form in which the appeal may be filed with Securities Appellate Tribunal.<\/li>\n<\/ul>\n\n\n\n<p><strong>POWER OF BOARD TO MAKE REGULATIONS: <\/strong>Board has been granted the powers under the Depositories Act, 1996 which may provide for or exercised in relation to the matters namely:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Form in which record is to be maintained.<\/li>\n\n\n\n<li>Form in which the certificate of commencement of business shall be issued.<\/li>\n\n\n\n<li>The manner in which the certificate of security shall be surrendered.<\/li>\n\n\n\n<li>The manner of creating pledge or hypothecation in respect of security owned by beneficial owner.<\/li>\n\n\n\n<li>The conditions and fees payable with respect to the issue of certificate of securities.<\/li>\n\n\n\n<li>Rights and obligations of Depositories, participants and the issuers under section17(1).<\/li>\n\n\n\n<li>Eligibility criteria for admission of securities in the depository.<\/li>\n<\/ul>\n\n\n\n<p><strong>POWER OF DEPOSITORIES TO MAKE BYE-LAWS: <\/strong>Depository shall have powers to make bye-laws regarding:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Eligibility criteria for admission and removal of securities.<\/li>\n\n\n\n<li>Conditions subject to which securities should be dealt with.<\/li>\n\n\n\n<li>Procedure of transactions with the depository.<\/li>\n\n\n\n<li>Manners and procedure of dematerialization of securities.<\/li>\n<\/ul>\n\n\n\n<!--nextpage-->\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: What are the rights and obligations of Depositories, Participants, Issuers and beneficial owners as given under Depositories Act 1996?<\/strong><\/h3>\n\n\n\n<p><strong>ANSWER:<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"914\" height=\"640\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-9.png\" alt=\"DEPOSITORIES ACT 1996 NOTES\" class=\"wp-image-6119\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-9.png 914w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-9-300x210.png 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/image-9-768x538.png 768w\" sizes=\"(max-width: 914px) 100vw, 914px\" \/><figcaption class=\"wp-element-caption\">DEPOSITORIES ACT 1996 NOTES<\/figcaption><\/figure>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>AGREEMENT BETWEEN DEPOSITORY AND PARTICIPANT: <\/strong>A depository shall enter into an agreement with one or more participants as its agent. Every agreement must be in the form as specified by the bye-laws.<\/li>\n<\/ol>\n\n\n\n<p>2. <strong>SERVICES OF DEPOSITORY:<\/strong> Any person, through a participant, may enter into an agreement, in such form as may be specified by the bye-laws, with any depository for availing its services.<\/p>\n\n\n\n<p>3. <strong>SURRENDER OF CERTIFICATE OF SECURITY: <\/strong>Any person who has entered into an agreement shall surrender the certificate of security for which he seeks to avail the services of the depository.<\/p>\n\n\n\n<p>The issuer on the receipt of certificate of Security, shall cancel the certificate of security and substitute in its books\/records, the name of the depository as a registered owner in inform the depositor accordingly.<\/p>\n\n\n\n<p>4. <strong>REGISTRATION OF TRANSFER OF SECURITIES WITH DEPOSITORY: <\/strong>Every depository shall on the receipt of intimation from a participant, register the transfer of security in the name of the transferee.<\/p>\n\n\n\n<p>If a beneficial owner or a transferee of any security seeks to have custody of such security, the depository shall inform the issuer accordingly.<\/p>\n\n\n\n<p>5. <strong>OPTIONS TO RECEIVE SECURITY CERTIFICATE OR HOLD SECURITIES WITH DEPOSITORY: <\/strong>Every depository shall on receipt of intimation from a participant, register the transfer of security in the name of the transferee.<\/p>\n\n\n\n<p>Where person opts to hold a security with the depository, the issuer shall intimate such depository the details of allotment of security and receipt of such information shall enter in the records of the depository.<\/p>\n\n\n\n<p>6. <strong>SECURITIES IN DEPOSITORIES IN FUNGIBLE FORM: <\/strong>All the securities held by the depository shall be in the fungible or dematerialized form which is an electronic mode to keep the records of the securities.<\/p>\n\n\n\n<p>7. <strong>RIGHTS OF DEPOSITORIES AND BENEFICIAL OWNER: <\/strong>Depository has the right to act as deemed registered owner of the security for the purpose of transfer of ownership of security on behalf of beneficial owner.<\/p>\n\n\n\n<p>Depository shall not have any voting rights as a registered owner on behalf of beneficial owner. Beneficial owner shall be entitled to all the rights and benefits and subject to all liabilities in respect of his securities held by depository.<\/p>\n\n\n\n<p>8. <strong>REGISTER OF BENEFICIAL OWNER: <\/strong>Every depository shall maintain a register and index of beneficial owners in the manner provided in Section 150,151 and 152 of the Companies Act,2013.<\/p>\n\n\n\n<p>9. <strong>PLEDGE OR HYPOTHECATION OF SECURITIES HELD IN DEPOSITORY: <\/strong>In case approval is granted by the owner to the depository regarding pledge of securities, he can hypothecate the security.<\/p>\n\n\n\n<p>Beneficial owner shall give intimation of such pledge to the depository and then depository make entries in its records accordingly.<\/p>\n\n\n\n<p>10. <strong>FURNISHING OF INFORMATION AND RECORDS BY DEPOSITORY AND ISSUER: <\/strong>Every depositor shall furnish to the issuer the information about the transfer of securities in the name of beneficial owners.<\/p>\n\n\n\n<p>Every issuer shall make available to the depository copies of the relevant records in respect of securities held by such depository.<\/p>\n\n\n\n<p>11. <strong>OPTION TO OPT OUT IN RESPECT OF ANY SECURITY: <\/strong>If a beneficial owner seeks to opt out of a depository in respect of any security, he shall inform the depository accordingly. The depository shall on receipt of intimation make appropriate enteries in its records and shall inform the issuer.<\/p>\n\n\n\n<p>Every issuer shall grant the certificate of security to the beneficial owner within the 30 days of intimation received from the depository provided that all the conditions are fulfilled and fees is provided.<\/p>\n\n\n\n<p>12. <strong>DEPOSITORY TO INDEMNIFY LOSS IN CERTAIN CASES: <\/strong>Any loss caused to the beneficial owner due to the negligence of the depository of the participant, the depository shall indemnify such loss to the beneficial owner.<\/p>\n\n\n\n<p>Where the loss due to the negligence of the participant is indemnified by the depository, shall have the right to recover the same from the participant.<\/p>\n\n\n\n<p>13. <strong>RIGHTS AND OBLIGATIONS OF DEPOSITORIES, ETC.: <\/strong>The rights and obligations of depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations.<\/p>\n\n\n\n<p>The eligibility criteria for admission of securities into the depository shall be specified by the regulations.<\/p>\n\n\n\n<!--nextpage-->\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: Explain the meaning and significance of term \u2018depositories\u2019. What type of securities the depositories provide?<\/strong><\/h3>\n\n\n\n<p><strong>ANSWER: DEPOSITORY: <\/strong>Depository in a firm wherein the securities of an investor are held in electronic form in the same way a bank holds money. It carries out the transactions of securities by means of book entry, without any physical movement of the securities. The depository based settlement system is also called \u2018book entry transfer settlement\u2019<\/p>\n\n\n\n<p>Depository acts as a defact owner of the securities logged with it for the limited purpose of transfer of ownership. It functions as the custodian of securities of its clients.<\/p>\n\n\n\n<p>At present there are two depositories in India:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>NSDL<\/li>\n\n\n\n<li>CDSL<\/li>\n<\/ol>\n\n\n\n<p><strong>SIGNIFICANCE OF DEPOSITORIES:&nbsp; <\/strong>Depositories are significant for investors, issuers as well as for intermediaries.<\/p>\n\n\n\n<p><strong><u>SIGNIFICANCE TO INVESTORS<\/u><\/strong><strong>:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li><strong>QUICK TRANSFER OF FUNDS AND SECURITIES: <\/strong>Once the securities are credited to the investors account for payout, he becomes the legal owner of the business. There is no need to send it to the registrar for registration. This facilitates quick transfer of funds and securities in comparison to the purchase and sale of securities in physical form which may takes 3-4 months.<\/li>\n\n\n\n<li><strong>ELIMINATION OF ALL THE RISKS WITH THE PHYSICAL CERTIFICATES: <\/strong>In investor is always exposed to the risks of loss by theft of stocks, multilation of certificates, loss in transit or loss of certificates during movement through or from the registrars etc. while dealing in physical form of securities, an investor has to incur costs for obtaining duplicate certificates and ads etc. Such problems are not faced under depositories system.<\/li>\n\n\n\n<li><strong>NO STAMP DUTY: <\/strong>No stamp duty is payable by the investors for getting the equity shares and units of mutual funds transferred under the depository. In case of physical shares, stamp duty of 0.5% is payable on transfer of shares.<\/li>\n\n\n\n<li><strong>MINIMISED CHANCES OF FRAUD, THEFT AND COUNTERRFEITING OF SECURITIES: <\/strong>Holding of securities in electronic form minimizes the chances of theft. Depository participants can effect the debit or credit to demat only after the receiving of valid requisition slip from the client. Thus the risks of fraud, theft and also counterfeiting of securities is minimized.<\/li>\n\n\n\n<li><strong>PROVIDES INSURANCE COVER: <\/strong>NSDL has taken up a comprehensive insurance policy to protect the interest of the investors in case the depository participant fails to resolve a genuine loss.<\/li>\n\n\n\n<li><strong>STATEMENT OF ACCOUNTS: <\/strong>Investors receive statements of accounts periodically from the depository participant. Every month, NSDL sent statement of accounts to investors selected at random, as a counter check.<\/li>\n\n\n\n<li><strong>DIRECT DISBURSEMENT OF NON-CASH BENEFITS: <\/strong>An investor entitled to receive right shares and bonus shares, is directly credited with such number of shares in his demat account. Similarly, any dividend or interest receivable is directly deposited by depositories in the demat account of the shareholders.<\/li>\n\n\n\n<li><strong>FASTER SETTLEMENT CYCLE: <\/strong>A settlement cycle of T+5 is followed for demat shares i.e. settlement of trading whether for purchase or sale is done on the 5<sup>th<\/sup> working day from the trade day. This not only provides liquidity to the investor but also leads to increased stock turnover.<\/li>\n\n\n\n<li><strong>REDUCTION IN BROKERAGE: <\/strong>Investors dealing in dematerialized securities are relieved from the botheration of handling huge volumes of paper. Moreover, it reduces the back office cost of the brokers who in turn may provide a reduction in the brokerage of 0.25% to 0.5%.<\/li>\n<\/ol>\n\n\n\n<p><strong><u>SIGNIFICANCE OF DEPOSITORIES TO ISSUERS<\/u><\/strong><strong>:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>The costs of registration and transfer of shares get reduced which were earlier incurred by the issuer company.<\/li>\n\n\n\n<li>There is saving in costs involved at the time of public issues.<\/li>\n\n\n\n<li>It is easy to attract the foreign investors without incurring any cost of issuance in overseas market.<\/li>\n\n\n\n<li>Reduction in the cost of registry and transfer, which are presently undertaken by the issuer.<\/li>\n<\/ol>\n\n\n\n<p><strong><u>SIGNIFICANCE TO INTERMEDIARIES<\/u><\/strong><strong>:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>Faster settlement<\/li>\n\n\n\n<li>Less risk of bad delivery.<\/li>\n\n\n\n<li>Reduced chances of forgery, counterfeit certificates, loss in transit, theft etc.<\/li>\n<\/ol>\n\n\n\n<p><strong>SECURITIES THE DEPOSITORIES PROVIDE:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li><strong>SHARES: <\/strong>Shares are the part of the share capital of the company. Depositories deals in the purchase and sale of shares of the company on behalf of the company on behalf of the participant or beneficial owners. The shares dealt may be equity shares or preference shares.<\/li>\n\n\n\n<li><strong>DEBENTURES: <\/strong>Debentures are the acknowledgement of the debt. It is a document under the company\u2019s seal which provides for the payment of a principal sum and interest thereon at regular intervals, which is usually secured by a fixed or floating charge on the company\u2019s property. Depositories provide the trading in debentures through demat account.<\/li>\n\n\n\n<li><strong>GOVERNMENT SECURITIES: <\/strong>These are the securities issued by the central or state government. These represents the market borrowings of the centre or the state. Broadly, government securities can be classified as:<\/li>\n\n\n\n<li>Dated government securities<\/li>\n\n\n\n<li>State development loans<\/li>\n\n\n\n<li>Treasury bills.<\/li>\n\n\n\n<li><strong>BONDS: <\/strong>Bonds refers to the high security debt instrument that enables an entity to raise funds and fulfill the capital requirements. It is a category of debt that the borrowers avail from individual investors for a specified tenure.<\/li>\n\n\n\n<li><strong>MUTUAL FUNDS: <\/strong>Depositories deals in mutual funds and these securities refers to an investment vehicle for investors who pool their savings for investing in diversified portfolio of securities with an aim to yield attractive returns.<\/li>\n<\/ol>\n\n\n\n<!--nextpage-->\n\n\n\n<h3 class=\"wp-block-heading\"><strong>QUESTION: What do you mean by depository and dematerialization? Also explain the procedure of dematerialization of securities?<\/strong><\/h3>\n\n\n\n<p><strong>ANSWER: DEPOSITORY: <\/strong>Depository in a firm wherein the securities of an investor are held in electronic form in the same way a bank holds money. It carries out the transactions of securities by means of book entry, without any physical movement of the securities. The depository based settlement system is also called \u2018book entry transfer settlement\u2019<\/p>\n\n\n\n<p>Depository acts as a defact owner of the securities logged with it for the limited purpose of transfer of ownership. It functions as the custodian of securities of its clients.<\/p>\n\n\n\n<p>At present there are two depositories in India:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\">\n<li>NSDL<\/li>\n\n\n\n<li>CDSL<\/li>\n<\/ol>\n\n\n\n<p><strong>DEMATERIALIZATION: <\/strong>Dematerialization is a process by which the physical share certificates of an investor are taken back by the Company and an equivalent number of securities are credited in electronic form at the request of the investor. An investor will have to first open an account with a Depository Participant and then request for the dematerialization of his share certificates through the Depository Participant so that the dematerialized holdings can be credited into that account.<\/p>\n\n\n\n<p><strong>PROCEDURE OF DEMATERIALIZATION OF SECURITIES:<\/strong><\/p>\n\n\n\n<p>The following steps are involved in dematerialization of securities:<\/p>\n\n\n\n<p><strong>Step: 1<\/strong><\/p>\n\n\n\n<p>Client\/Investor submits the DRF (Demat Request Form) and physical certificates (to be dematted) to the DP.<\/p>\n\n\n\n<p>DP checks whether the securities are available for demat.<\/p>\n\n\n\n<p>Client defaces the certificate by stamping &#8220;Surrendered for Dematerialization&#8221;.<\/p>\n\n\n\n<p>DP punches two holes on the name of the company and draws two parallel lines across the face of the certificate. This ensures that your shares are not lost in transit or misused till credit is received by you in your demat account. The DP upon receipt of the shares and the DRF, will issue the client an acknowledgement and will send an electronic request to the company.<\/p>\n\n\n\n<p><strong>Step: 2<\/strong><\/p>\n\n\n\n<p>DP enters the demat request in his system to be sent to NSDL DP dispatches the physical certificates along with the DRF to the R&amp;T<\/p>\n\n\n\n<p><strong>Step: 3:<\/strong><\/p>\n\n\n\n<p>DP dispatches the physical certificates along with the DRF to the R &amp; T Agent.<\/p>\n\n\n\n<p><strong>Step: 4<\/strong><\/p>\n\n\n\n<p>NSDL records the details of the electronic request in the system and forwards the request to the R&amp;T Agent.<\/p>\n\n\n\n<p><strong>Step: 5<\/strong><\/p>\n\n\n\n<p>R&amp;T Agent, on receiving the physical documents and the electronic request, verify and check them. Once the R&amp;T Agent is satisfied. dematerialization of the concerned securities is electronically confirmed to NSDL.<\/p>\n\n\n\n<p><strong>Step: 6<\/strong><\/p>\n\n\n\n<p>NSDL credits the dematerialized securities to the beneficiary account of the investor and intimates the DP electronically.<\/p>\n\n\n\n<p><strong>Step: 7<\/strong><\/p>\n\n\n\n<p>The DP issues a statement of transaction to the client.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>ALSO STUDY:<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/functionaries-of-stock-exchange-pdf\/\">Functionaries of stock exchange<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"640\" height=\"360\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/Definitions-of-Depositories-Act-1996.png\" alt=\"DEPOSITORIES ACT 1996 NOTES\" class=\"wp-image-6116\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/Definitions-of-Depositories-Act-1996.png 640w, https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/11\/Definitions-of-Depositories-Act-1996-300x169.png 300w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><figcaption class=\"wp-element-caption\">DEPOSITORIES ACT 1996 NOTES<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Depositories Act 1996 notes : Definitions under depositories act and salient features of depositories act 1996, dematerialization of securities. QUESTION: Discuss the main features of Depositories Act, 1996? &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; OR &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Write a note on Depositories Act, 1996. Answer: DEPOSITORIES ACT 1996: This Act came into force on September 20th, 1995 and extends to the&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/depositories-act-1996-notes-for-bcom\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;DEPOSITORIES ACT 1996 NOTES&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":6116,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[253],"tags":[403,404,405,406,407,408,409,410],"class_list":["post-6115","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-university-student-notes-for-exams","tag-dematerialisation","tag-depositories","tag-features-of-depositories-act","tag-process-of-dematerialisation","tag-rights-and-obligations-of-beneficial-owners","tag-rights-and-obligations-of-depositories","tag-rights-and-obligations-of-issuers","tag-rights-and-obligations-of-participants"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6115"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=6115"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/6115\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/6116"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=6115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=6115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=6115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}