NSDL facilitates secure and efficient electronic holding, trading and transfer of securities. Central to its operations is the robust depository ecosystem that involves collaboration with various functionaries called ‘Business Partners’. These functionaries are linked to NSDL through an MPLS (Multi Protocol Label Switching). This comprehensive system, known as the “NEST“ (National Electronic Settlement & Transfer) system, connects electronic links and software between NSDL and its Business Partners. Here’s how different Business Partners are part of to this integrated ecosystem:
It is through DPs that investors get depository services. A Bank, Financial Institution, a Broker, or any body can be a DP provided it is eligible under the SEBI (Depositories and Participants) Regulations, 2018. Besides, NSDL bye-laws also establish the eligibility criteria for entities to qualify as an DP. Investors can open a depository account with a DP just like one opens a bank account to get banking services.
DPs are integrated into NSDL's electronic infrastructure, enabling them to access the depository's systems for secure and efficient processing of transactions and account management.
Issuers, who have signed an agreement with NSDL, can convert their securities into electronic form within the NSDL depository. Under this agreement, issuers verify the certificates submitted for electronic conversion before it occurs. This electronic connectivity helps in various processes such as dematerialisation, rematerialisation, daily checks and corporate actions.
Clearing Corporations facilitate the settlement of the trades done on the stock exchanges. All major Clearing Corporations of BSE Limited, Metropolitan Stock Exchange of India Limited and National Stock Exchange of India Limited (NSE) are electronically connected to NSDL.
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