Depository :                                                                                         Equity | Mutual Funds| Derivatives| IPO
The principal function of a depository is to provide a facility for investors to hold and transfer securities in dematerialised form and in book-entry form. The securities are transferred by debiting the transferor’s depository account and crediting the transferee’s depository account.

As per The Bank for International Settlements (BIS), depository is “a facility for holding securities which enables securities transactions to be processed by book entry. Physical securities may be immobilized by the depository or securities may be dematerialized (so that they exist only as electronic records)”. In simple terms depository is an organization where securities of an investor are held and transferred in electronic form.

There are three types of demat accounts which can be opened with a depository participant viz :-

(a)  Beneficial Owners Account
(b)  Clearing Member Account
(c)  Intermediary Account.

According to the SEBI (Depositories and Participants) Regulations, 1996, the following securities are eligible for holding in dematerialised form :-

1. Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of similar nature of any incorporated company or other body corporate, including underlying shares of ADRs and GDRs.

2. Units of mutual funds, rights under collective investment schemes and venture capital funds, commercial paper, certificate of deposit, securitised debt, money market instruments, government securities and unlisted securities.

At present two Depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (I) Limited (CDSL) are registered with SEBI.
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