Depository
Participants: All the functions performed by depositories are
actually executed by the depository participants (DPs). All activities related
to recording of allotment of securities, transfer of securities etc. are
executed through depository participants and no investor can directly open an
account with a depository. A depository can enter into an agreement with
various depository participants who would work as agents of the depository.
Depository Participant works as an intermediary between the investor and
depository and they are called as agents of the depository. The Depositories
Act, 1996, and SEBI (Depository & Participants) Regulations, 1996, specify
the relationship between a depository and depository participant. Any issue
related to the governance of relationship between the depository and DPs will
be in accordance with the Depositories Act and SEBI regulations. A depository participant
is always registered with SEBI and is a legal entity. Once a depository participant
obtains a certification of registration with SEBI after that it can start giving
its depositories-related services.
- SEBI (Depository & Participants) Regulations, 1996, has prescribed a minimum net worth of Rs. 50 lakh for the applicants who are stockbrokers or Non-Banking Finance Companies (NBFCs), for granting a certificate of registration to act as a depository participant.
- For R&T agents, a minimum net worth of Rs.10 crore is prescribed in addition to a grant of certificate of registration by SEBI.