Becoming NSDL DP: Steps, Eligibility And Services Offered

DPs: The Connection Between Investors And NSDL

A Participant (DP) functions as a direct interface between investors and NSDL. DPs facilitate the opening of demat accounts for investors, hold their securities in electronic form. SEBI regulates both NSDL and DPs as per the established guidelines. Registration of a DP with SEBI becomes effective only upon the recommendation by NSDL.

By becoming a part of NSDL, DPs get to leverage our infrastructure and technology, enabling them to efficiently manage and administer investors securities in a secure and regulated environment. 

Procedure for becoming a Depository Participant With NSDL 

To become a Depository Participant (DP) with National Securities Depository Limited (NSDL), the following steps must be completed:

• Application Submission:
  Submit an application in the prescribed format along with the required supporting documents and applicable fees to NSDL. Click here to view the list of required documents.
   

• Evaluation by NSDL Committee
  Upon receipt of the complete application, NSDL will present it before the concerned committee for evaluation. Once approved, you will be required to procure the necessary infrastructure and hardware as per the System Specifications & Investment Guidelines. DP System Specifications & Investments-NSDL

• Staff Training and Certification
  Your staff must attend a four-day training program conducted at NSDL’s Mumbai office/ online to gain familiarity with the NSDL system.
  In addition, staff members must obtain the NISM–Series III & VI: Depository Operations Certificate Examination or CPE qualification (refer to relevant circulars in the document list).

• Infrastructure Setup & System Testing
  After installation of the required infrastructure and completion of network/system testing, NSDL will conduct a pre-activation inspection at your premises.

• SEBI Approval & Pilot Activation
  Once the inspection is successfully completed, NSDL will forward your application to SEBI for approval*.
  Upon SEBI’s acceptance, your participantship will be activated in the pilot environment for testing purposes. This testing must be completed successfully.

• Payment of Applicable Fees
  Submit the required fees payable to SEBI and NSDL as mentioned on the Fees and Charges to Depository Participants, Issuers, Other Users - NSDL.

• Execution of Agreement
  Enter into a formal Participant Agreement with NSDL.

• Operational Activation
  After successful completion of all the above steps, your participantship will be activated in the NSDL system and you will begin operations as a Depository Participant.

* If you are an existing CDSL DP, your application will not be sent to SEBI and will be processed internally at NSDL.

Eligibility 

As per SEBI (Depositories & Participants) Regulations 2018, following are the categories that are eligible to become DPs -

(i) a public financial institution as defined in section 2(72) of the Companies Act, 2013;

(ii) a bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);

(iii) a foreign bank operating in India with the approval of the Reserve Bank of India;

(iv) a State Financial Corporation established under the provisions of section 3 of the State Financial Corporations Act, 1951 (63 of 1951);

(v) an institution engaged in providing financial services, promoted by any of t

institutions mentioned in sub-clauses (i), (ii), (iii) and (iv), jointly or severally;

(vi) a custodian of securities who has been granted a certificate of registration by the Board under sub-section (1A) of section 12 of the Act;

(vii) a clearing corporation or a clearing house of a stock exchange;

(viii) a stock broker who has been granted a certificate of registration by the Board under sub-section (1) of section 12 of the Act :

Provided that the stock broker shall have a networth of rupees Five crores. 

Provided further that a self-clearing member fulfilling the networth requirements as provided under the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 shall also be eligible to register as a depository participant.

(ix) a non-banking finance company, having a net worth of not less than rupees fifty lakhs:

Provided that such company shall act as a participant only on behalf of itself and not on behalf of any other person:

Provided further that a non-banking finance company may act as a participant on behalf of any other person, if it has a net worth of rupees fifty crore in addition to the net worth specified by any other authority;

(x) a registrar to an issue or share transfer agent who has a minimum net worth of rupees ten crores and who has been granted a certificate of registration by the Board under sub-section (1) of section 12 of the Act;

The Regulations empower NSDL to set its own selection criteria in the Bye Laws. Therefore, the applicants must also adhere to the following admission criteria stated in NSDL Bye Laws. 

Please click on NSDL for NSDL Bye laws

DP Training

• Participants will receive a digitally signed 'Participation Certificate.

NSDL Circulars

• Staying informed about operational guidelines, policy amendments, tender offers and regulatory updates is important for DPs to ensure compliance and deliver optimal services to their clients. NSDL’s circulars help DPs stay abreast of crucial changes and developments in the depository system.
  
  Contact Support
  
  System specification in DP

Account Opening API 

• Conversion/Reconversion Mutual Funds.

NSDL Update 

NSDL shares important and crucial information to DPs through NSDL Update NSDL update comprises circulars, investor related compliances etc.  
Below are NSDL's annual updates:

• Fees Payable for becoming a Depository Participant of NSDL    
• Fee Structure payable by Participant during on-boarding  
• Various Documents to be submitted during on-boarding  
• Fees and Charges to Other Users 
• A Comparative Chart of Fees Charged by the DPs

A Clearing Member's Guide to Trading and Settlement - the Depository Way

You can download the pdf format of the NSDL publications by clicking on the link. You need to have acrobat reader to view these files.

• A Clearing Member's Guide to Trading and Settlement - the depository way (pdf)

For free download of Acrobat reader click here

You may contact us for any further details.