What is a Demat Account? What is a Depository and who is a Depository Participant?
A Demat account is one by which the investor is able to hold his securities in electronic form as beneficial owner through opening such account with a depository participant. A depository holds the securities of investors in electronic form just like a bank holds cash for its customers. They serve as a link between the Shareholder, the Company and Broking Firm. The National Securities Depository Limited (NSDL) and Central Depository Services Ltd (CDSL) are the two depositories in India. The Securities and Exchange Board of India (SEBI) regulate their functions. As a NRI/PIO, you can open demat accounts with one or more DPs. After opening the account, you can hold shares of any number of companies in your account, provided all such companies have entered the depository system.
A demat account is one by which the investor is able to hold his securities in electronic form as beneficial owner through opening such account with a depository participant. A depository holds the securities of investors in electronic form just like a bank holds cash for its customers. As in a Bank, securities get credited/debited on purchase/sale through a registered Broking Firm. The National Securities Depository Limited (NSDL) and Central Depository Services Ltd (CDSL) are the two depositories in India. Their functions are regulated by the Securities and Exchange Board of India (SEBI). The Depository Participants (DPs) are the link between the Shareholder, the Company and Broking Firm. Banks, Financial Institutions, Custodians, Stock Brokers etc. can become DPs subject to their meeting certain requirements prescribed by NSDL / CDSL and SEBI. An NRI/PIO open Demat accounts with one or more DPs. After opening the account, you can hold shares of any number of companies in your accoun
