Depositories
Depository is an institution which maintains investors account in electronic form. One of the main functions of the Depository is to transfer the ownership of shares from one investor to another whenever the trading of shares 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 damage, theft, and subsequent misuse of the certificates or fake securities.
There are two types of depositories in India which are 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 or SEBI registered trading members.
Globally,
depositories provide the same set of services as has been rendered by CDSL and NSDL.
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