The control on creation and extinguishing securities in demat form in NSDL depository system is with issuers. Securities in demat can be created in two different ways.
The first method is by converting the physical securities into demat form by confirming demat requests received. The second method is by way of corporate action. Under this method, issuer releases instructions to NSDL to credit eligible beneficial owners with securities as per their entitlements.
Securities in demat form can be extinguished in two ways. The first method is by confirming rematerialisation requests received i.e. converting demat form securities into physical certificate form. The second method is by debit corporate action. Under this method issuer releases instructions to NSDL to debit eligible beneficial owners with securities as per their entitlements.
Further, the control on the number of securities in demat form on a daily basis is also retained with the issuers. This control is exercised by way of daily reconciliation between NSDL holdings with physical holdings.
All the above controls require means of continuous electronic communication between NSDL and issuer. Issuer may establish such communication link by setting a computer facility called DPM-SHR by itself or by utilising such facility set up by Registrar & Transfer Agents.
Eligibility
The applicants shall adhere to the following admission criteria
The applicant shall be SEBI Registered registrar under any one of the following categories
Category I
To carry on the activities as a registrar to an issue and share transfer agent.
Category II
To carry on the activity either as a registrar to an issue or as a share transfer agent.
In case of the issuer, intending to carry out electronic share registry operations in-house the above criterion is not applicable.
Procedure
Steps for setting of electronic connectivity with NSDL as a share registrar (SHR)
Letter to NSDL
The issuer/ registrar intending to set up electronic connectivity as a SHR with NSDL should provide a letter (addressed to NSDL - Issuer Interface Department) intimating its intention to establish electronic connectivity as a SHR with NSDL alongwith a certified copy of SEBI registration certificate (as Category I or Category II share registrar). This SEBI registration certificate is not required from the issuers intending to establish SHR connectivity for their in-house activities provided the number of folios is less than or equal to one lakh. The issuer/registrar will also submit "Form A" giving the contact details.
Procure hardware/software
The hardware has to be procured by the issuer/registrar as per NSDL specifications (given in Form A1 ). The issuer / registrar has to submit Form A & A1 to NSDL-PMC Department before giving the purchase order.
Procure MPLS Line
Please refer to circular No
NSDL/CIR/II/025/2008 dated October 13, 2008.
Install hardware/software/network systems and submit Form B.
The Issuer/ registrar will complete connectivity testing with the help of networking department officials from NSDL and submit "Form B" to NSDL.
Pay software fees for DPM-SHR software
The issuer/registrar should send payment of Rs.2,50,000 plus taxes (as applicable) vide a Demand Draft drawn in favour of National Securities Depository Limited payable at Mumbai towards the DPM-SHR application software. After the connectivity testing is completed and on receipt of a CD containing application softwares viz; NSDL Download Agent, Signature Viewing Utility etc. & e-Token, the issuer/registrar should apply for Digital SignatureCertificate (Refer NSDL Circular No. NSDL/CIR/II/14/2010 dated May 6, 2010).
Training of personnel
The issuer/registrar should get at least two persons trained at NSDL when the connectivity testing is in progress. NSDL organises training programs for issuer/registrar on need basis, which is generally at a frequency of every two months. (For training program schedule get in touch with NSDL Business Partner Training Department)
Complete pilot testing
The issuer/registrar should inform NSDL officials regarding the successful log-in into the software. The testing for regular business operations (Pilot Testing) should be completed by the issuer/ registrar. The issuer/registrar is required to install Auto Download Software on one of the client machine for receiving beneficiary positions from NSDL.
To become operational as R&T agent
After the pilot testing for regular business operations is completed, the issuer/registrar will be made live in NSDL system as a share registrar.
Carry out change of R&T Agent (if required).
For clarifications on networking issues you may please contact NSDL System III Department.
For any further assistance you may please contact Mr. Basant Sahu / Mr. Preveen Prasad from NSDL at 022-24994543 / 24994552.
System Specification
The Registrar & Transfer Agents will have their own dedicated I.T. set up (for DPM SHR operations) installed in their office. This set-up shall be connected to the Depository system situated at National Securities Depository Limited, Central System (Head Office of NSDL), using appropriate telecommunication links. The hardware, software & telecommunication equipment of this setup should be in accordance with NSDL Specification. The Registrar & Transfer Agent should ensure continuous electronic means of communication (connectivity) with NSDL.
The minimum I.T. set up required for a Registrar & Transfer Agents would comprise at least one client / node (Desk top system) and networking hardware.
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