Investor Charter As Depositories And Depository Participants

Vision :

Towards making the Indian Securities Market - we are a transparent, Efficient, & Investor friendly, safe, reliable, transparent and trusted record-keeping platform for investors to hold and transfer securities in dematerialized form.

Mission :

  • To hold securities of investors in dematerialized form and facilitate their transfer while ensuring the safekeeping of securities and protecting the interest of investors.
  • To provide timely and accurate information to investors concerning their holding and transfer of securities held by them.
  • To provide the highest standards of investor education, investor awareness and timely services to enhance Investor Protection and create awareness about Investor Rights.

Details of business transacted by the Depository and Depository Participant (DP)

A Depository is an organization which holds investors' securities in electronic form. Depositories provide services to market participants - Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary and secondary markets. The depository carries out its activities through its agents, known as Depository Participants (DP). Details are available on the link [https://www.cdslindia.com]

Various activities of Stock Brokers with timelines :

(1) Basic Services
S.No. Brief about the Activity / Service Expected Timelines for processing by the DP after receipt of proper documents
1. Dematerialization of securities 7 days
2. Rematerialization of securities 7 days
3. Mutual Fund Conversion / Destatementization 5 days
4. Re-conversion / Restatementisation of Mutual fund units 7 days
5. Transmission of securities 7 days
6. Registering pledge request 15 days
7. Closure of demat account 2 working days
8. Settlement Instruction Depositories to accept physical DIS for pay-in of securities up to 4 p.m. and DIS in electronic form up to 6 p.m. on T+1 day
(2) Depositories provide special services like pledge, hypothecation, internet-based services etc. in addition to their core services and these include
S.No. Type of Activity /Service Brief about the Activity / Service
1. Value Added Services Depositories also provide value added services such as
  • Basic Services Demat Account (BSDA)

    • The Basic Services Demat Account (BSDA) was introduced to promote financial inclusion and encourage individuals to open and maintain demat accounts. Here's a breakdown of the Annual Maintenance Charges (AMC) based on the value of holdings in the demat account (Debt as well as other than debt securities combined):

    Value of Holdings Annual Maintenance Charges (AMC)
    Up to ₹4 lakhs NIL
    More than ₹4 lakhs but up to ₹10 lakhs ₹100
    More than ₹10 lakhs Not a BSDA. Regular AMC may be levied.
  • Transposition cum dematerialization
    • In the case of transposition-cum-dematerialisation, the client can get securities dematerialised in the same account if the names appearing on the certificates match the names in which the account has been opened but are in a different order. The same may be done by submitting the security certificates, Transposition Form, and Demat Request Form.
  • Linkages with Clearing System
    • for actual delivery of securities to the clearing system from the selling brokers and delivery of securities from the clearing system to the buying broker.
  • Distribution of cash and non-cash corporate benefits (Bonus, Rights, IPOs etc.), stock lending, demat of NSC / KVP, demat of warehouse receipts etc.
2. Consolidated Account statement (CAS) CAS is issued 10 days from the end of the month (if there were transactions in the previous month) or half yearly (if there are no transactions).
3. Digitalization of services provided by the depositories
  • E-account opening: Details available on the link
    • Account opening through digital mode, popularly known as “Online Account opening”, wherein an investor intending to open the demat account can visit the DP website, fill in the required information, submit the required documents, conduct video IPV, and demat account gets opened without visiting DPs office.
  • Online instructions for execution: Details available on the link
    • Internet-enabled services like Speed-e(NSDL) & Easiest (CDSL) empower a demat account holder to manage their securities ‘anytime-anywhere’ efficiently and conveniently and submit instructions online without using paper. These facilities allow Beneficial Owner (BO) to submit transfer and pledge instructions, including margin pledges from their demat account. The instruction facilities are also available on mobile applications through Android, Windows and IOS platforms.
  • e-DIS / Demat Gateway: Details available on the link
    • Investors can give instructions for transferring securities through e-DIS apart from physical DIS. Here, for on-market transfer of securities, investors need to provide a settlement number along with the ISIN and quantity of securities being authorized for transfer. Client shall be required to authorize each e-DIS valid for a single settlement number/settlement date by way of OTP and PIN/password, both generated at the Depositories end. Depositories are adopting necessary risk containment measures in this regard.
  • e-CAS facility: Details available on the link
    • Consolidated Account Statements are available online and can also be accessed through the mobile app to facilitate the investors to view their holdings in demat form.
  • Miscellaneous services: Details available on the link
    • Transaction alerts have also been developed through SMS, e-locker facilities, chatbots for instantaneously responding to investor queries, etc.

Details of Grievance Redressal Mechanism

(1) The Process of investor grievance redressal
1. Investor Complaint/ Grievances The investor can lodge complaints/grievances against the Depository/DP in the following ways:
  • Electronic mode -
    • SCORES 2.0 (a web based centralized grievance redressal system of SEBI) https://scores.sebi.gov.in/ Two Level Review for complaint/grievance against DP: - First review done by Designated Body - Second review done by SEBI
    • Respective Depository’s web portal dedicated for the filing of compliant https://www.cdslindia.com
    • Emails to designated email IDs of Depository
  • Offline mode
The complaints/ grievances lodged directly with the Depository shall be resolved within 21 days.
2. Online Dispute Resolution (ODR)platform for online Conciliation and Arbitration If the Investor is not satisfied with the resolution provided by DP or other Market Participants, then the Investor has the option to file the complaint/ grievance on SMARTODR platform for its resolution through by online conciliation or arbitration.
3. Steps to be followed in ODR for Review, Conciliation and Arbitration
  • Investor to approach Market Participant for redressal of complaint
  • If investor is not satisfied with response of Market Participant, he/she can escalate the complaint on SEBI SCORES portal.
  • If investor is not satisfied with response of Market Participant, he/she can escalate the complaint on SEBI SCORES portal.
  • Upon receipt of complaint on SMARTODR portal, the relevant MII will review the matter and endeavour to resolve the matter between the Market Participant and investor within 21 days.
  • If the matter could not be amicably resolved, then the Investor may request the MII to refer the matter case for conciliation.
  • During the conciliation process, the conciliator will endeavor for amicable settlement of the dispute within 21 days, which may be extended with 10 days by the conciliator.
  • If the conciliation is unsuccessful, then the investor may request to refer the matter for arbitration.
  • The arbitration process to be concluded by arbitrator(s) within 30 days, which is extendable by 30 days.
(2) For the Multi-level complaint resolution mechanism available at the DepositoriesDetails of business transacted by the Depository and Depository Participant (DP)

Details of business transacted by the Depository and Depository Participant (DP)

A Depository is an organization which holds investors' securities in electronic form. Depositories provide services to market participants - Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary and secondary markets. The depository carries out its activities through its agents, known as Depository Participants (DP). Details are available on the link [https://www.cdslindia.com].

Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant

S.No. Type of special circumstances Timelines for the Activity/ Service
1.
  • Depositories to terminate the participation in case a participant no longer meets the eligibility criteria and/or any other grounds as mentioned in the bye-laws like suspension of the trading member by the Stock Exchanges.
  • Participant surrenders their participation to their wish.
The client will have a right to transfer all its securities to any other Participant of its choice without any charges for the transfer within 30 days from the date of intimation by way of letter/email.

Dos and Don’ts for Investors

For Do’s and Don’ts please refer to the link Dos and Don’ts for Investor

Rights of investors

For rights, please refer to the link Rights of investors

Responsibilities of Investors

For responsibilities, please refer to the link Responsibilities of Investors

Annexure B - the information contained in links to the investor charter for depositories and pds

This document contains the contents pertaining to the qualifier “[https://www.cdslindia.com]” in the Investor Charter main document. The Depositories will make the same available on their websites, and web links to the same will be provided for incorporation in the Investor Charter. For convenience, the contents in the main Charter and this document have been mapped with the same superscript.

Para 5(1) of Investor Charter

Point 2 (Investor Grievance Redressal Committee of Depository):

If no amicable resolution arrives, the InvestorInvestor can refer the complaint/ grievance to the Depository's Grievance Redressal Committee (GRC). Upon receipt of the reference, the GRC will endeavour to resolve the complaint/ grievance by hearing the parties and examining the necessary information and documents.

Point 3(Arbitration proceedings):

The InvestorInvestor may also avail of the arbitration mechanism set out in the Depository's Byelaws and Business Rules/Operating Instructions with any dispute relating to depository services. The arbitration reference shall be concluded by way of the issue of an arbitral award within 4 months from the date of appointment of the arbitrator(s).

Para 5(2) of Investor Charter:

Complaint Resolution Process at Depositories:

Para 7 of Investor Charter

Do's and Don’ts for Investor

S.No. Guidance
1. Always deal with a SEBI registered Depository Participant for opening a demat account.
2. Read all the documents carefully before signing them.
3. Before granting Power of attorney to operate your demat account to an intermediary like Stockbroker, Portfolio Management Services (PMS) etc., carefully examine the scope and implications of the powers being granted.
4. Always make payments to registered intermediaries using banking channels. No payment should be made in the name of the intermediary employee.
5. Accept the Delivery Instruction Slip (DIS) book from your DP only (preprinted with a serial number along with your Client ID) and keep it in safe custody and do not sign or issue blank or partially filled DIS slips.
Always mention the details like ISIN and the number of securities accurately. In case of any queries, please contact your DP or broker, and all demat account holders should sign it.
Strike out any blank space on the slip, and Cancellations or corrections on the DIS should be initialled or signed by all the account holder(s).
Do not leave your instruction slip book with anyone else.
Do not sign blank DIS as it is equivalent to a bearer cheque.
6. Inform any change in your Personal Information (for example, address or Bank Account details, email ID, Mobile number) linked to your demat account in the prescribed format and obtain confirmation of updation in the system.
7. Mention your Mobile Number and email ID in the account opening form to receive SMS alerts and regular updates directly from the Depository.
8. Always ensure that the mobile number and email ID linked to your demat account are the same as provided at the time of account opening/updation.
9. Do not share your online trading and demat account password with anyone.
10. Do not share One Time Password (OTP) received from banks, brokers, etc. These are meant to be used by you only.
11. Do not share login credentials of e-facilities provided by the depositories, such as e- DIS/demat gateway, SPEED-e/easiest etc., with anyone else.
12. Demat is mandatory for any transfer of securities of Listed public limited companies with few exceptions.
13. If you have any grievance in respect of your demat account, please write to the designated email IDs of depositories, or you may lodge the same with SEBI online at https://scores.sebi.gov.in/
14. Record documents signed, DIS issued and account statements received.
15. As Investors, you must verify the transaction statement carefully for all debits and credits in your account. In case of any unauthorized debit or credit, inform the DP or your respective Depository.
16. Appoint a nominee to facilitate your heirs in obtaining the securities in your demat account upon completing the necessary procedures.
17. Register for Depository's internet-based facility or download the mobile app of the Depository to monitor your holdings.
18. Ensure that your DP receives both your holding and transaction statements periodically as instructed. You are entitled to receive a monthly transaction statement if you have any transactions.
19. Do not follow a herd mentality for investments. Seek expert and professional advice for your investments.
20. Beware of assured/fixed returns.

Para 8 of Investor Charter

Rights of investors

  • Receive a copy of KYC copy of account opening documents.
  • No minimum balance is required to be maintained in a demat account.
  • No charges are payable for the opening of demat accounts.
  • If executed, receive a copy of the Power of Attorney. However, Power of Attorney is not mandatory as per SEBI / Stock Exchanges. You have the right to revoke any authorization given at any time.
  • You can open more than one demat account in the same name with single DP/ multiple DPs.
  • Receive a statement of accounts periodically. In case of any discrepancies in statements, take up the same with the DP immediately. If the DP does not respond, take up the matter with the Depositories.
  • Pledge and /or any other interest or encumbrance can be created on demat holdings.
  • Right to give standing instructions concerning crediting securities in the demat account.
  • The InvestorInvestor can exercise their right to freeze/unfreeze their demat account or specific securities / specific quantity of securities in the account maintained with the DP.
  • In case of any grievances, InvestorInvestor has the right to approach Participant or Depository or SEBI to resolve the same within prescribed timelines.
  • Every eligible investor shareholder has a right to cast a vote on various resolutions proposed by the companies for which Depositories have developed an internet-based ‘e- Voting’ platform.
  • Receive information about charges and fees. Any charges/tariff agreed upon shall not increase unless a notice in writing of not less than thirty days is given to the InvestorInvestor.

Para 9 of Investor Charter

Responsibilities of Investors

  • Deal with a SEBI-registered DP for opening demat account, KYC and Depository activities.
  • Provide complete documents for account opening and KYC (Know Your Client). Fill in all the required details in the Account Opening Form / KYC form in own handwriting and cancel out the blanks.
  • Read all agreed-upon documents and conditions before signing the account opening form.
  • Accept the Delivery Instruction Slip (DIS) book from DP only (preprinted with a serial number along with client ID), keep it in safe custody, and do not sign or issue blank or partially filled DIS.
  • Always mention the details like ISIN and the number of securities accurately.
  • Inform any change in information linked to the demat account and obtain confirmation of updation in the system.
  • Regularly verify balances and demat statements and reconcile with trades/transactions.
  • Appoint nominee(s) to facilitate heirs in obtaining the securities in their demat account.
  • Do not fall prey to fraudsters sending emails and SMSs luring you to trade in stocks/securities promising huge profits.