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Financial Gyaan
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Depository Participants: (fianancialgyaan.com)

Investor used to hold the securities in the form of physical certificate but now securities can be handled in an electronic form by the process of dematerialisation after the introduction of Depository system in India. 

Depository transfer the ownership of shares from one investor`s account to another investor`s account whenever the trade takes place. It helps in reducing the paper work involved in trade, expedites the transfer and reduces the risk associated with physical shares such as damaged, theft, interceptions and subsequent misuse of the certificates or fake securities.
 
We have 2 depositories in India which are well known as NSDL (National securities depository limited) and CSDL (Central Depository Services (India) Limited). They interface with the investors through their agents called Depository participants (DPs). DPs could be the banks (private, public and foreign), financial institutions and Sebi-registered trading members.

Depository participant provides the service of opening a demat account to the investor; they are coming with different schemes like three-in-one demat account, free demat account etc to lure the investors to open an account with them. However, they are making an investment in to securities more reachable by providing services like transaction SMS on registered mobile number, contract note for every transaction at your door, E-trading platform, investment advice etc.

Investor should take accessibility, charges and service factors of DPs into consideration before opening an account with them.

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