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4. Agreement between depository and participant

    (1) A depository shall enter into an agreement with one or more participants as its agent.

    (2) Every agreement under sub-section (1) shall be in such form as may be specified by the bye-laws.

5. Services of depository

- Any person, through a participant, may enter into an agreement, in such form as may be specified by the bye-laws, with any depository for availing its services.

6. Surrender of certificate of security

    (1) Any person who has entered into an agreement under section 5 shall surrender the certificate of security, for which he seeks to avail the services of a depository, to the issuer in such manner as may be specified by the regulations.

    (2) The issuer, on receipt of certificate of security under sub-section (1), shall cancel the certificate of security and substitute in its records the name of the depository as a registered owner in respect of that security and inform the depository accordingly.

    (3) A depository shall, on receipt of information under sub-section (2), enter the name of the person referred in sub- section (1) in its records, as the beneficial owner.

7. Registration of transfer of securities with depository

    (1) Every depository shall, on receipt of intimation from a participant, register the transfer of security in the name of the transferee.

    (2) If a beneficial owner or a transferee of any security seeks to have custody of such security, the depository shall inform the issuer accordingly.

8. Options to receive security certificate or hold securities with depository

    (1) Every person subscribing to securities offered by an issuer shall have the option either to receive the security certificates or hold securities with a depository.

    (2) Where a person opts to hold a security with a depository, the issuer shall intimate such depository the details of allotment of the security, and on receipt of such information the depository shall enter in its records the name of the allottee as the beneficial owner of that security.

9. Securities in depositories to be in fungible form

    (1) All securities held by a depository shall be dematerialised and shall be in a fungible form.

    (2) Nothing contained in sections 153, 153A, 153B, 187B, 187C and 372 of the Companies Act, 1956 shall apply to the securities held by a depository on behalf of the beneficial owners.

10. Rights of depositories and beneficial owner
    (1) Notwithstanding anything contained in any other law for the time being in force, a depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of a beneficial owner.

    (2) Save as otherwise provided in sub-section (1), the depository as a registered owner shall not have any voting rights or any other rights in respect of securities held by it.

    (3) The beneficial owner shall be entitled to all the rights and benefits and be subjected to all the liabilities in respect of his securities held by a depository.

11. Register of beneficial owner

Every depository shall maintain a register and an index of beneficial owners in the manner provided in sections 150, 151 and 152 of the Companies Act, 1956.

12. Pledge or hypothecation of securities held in a depository

    (1) Subject to such regulations and bye-laws, as may be made in this behalf, a beneficial owner may with the previous approval of the depository create a pledge or hypothecation in respect of a security owned by him through a depository.

    (2) Every beneficial owner shall give intimation of such pledge or hypothecation to the depository and such depository shall thereupon make entries in its records accordingly.

    (3) Any entry in the records of a depository under sub- section (2) shall be evidence of a pledge or hypothecation.

13. Furnishing of information and records by depository and issuer

    (1) Every depository shall furnish to the issuer information about the transfer of securities in the name of beneficial owners at such intervals and in such manner as may be specified by the bye-laws.

    (2) Every issuer shall make available to the depository copies of the relevant records in respect of securities held by such depository.

14. Option to opt out in respect of any security
    (1) If a beneficial owner seeks to opt out of a depository in respect of any security he shall inform the depository accordingly.

    (2) The depository shall on receipt of intimation under sub-section (1) make appropriate entries in its records and shall inform the issuer.

    (3) Every issuer shall, within thirty days of the receipt of intimation from the depository and on fulfilment of such conditions and on payment of such fees as may be specified by the regulations, issue the certificate of securities to the beneficial owner or the transferee, as the case may be.

15. Act 18 of 1891 to apply to depositories

The Bankers' Books Evidence Act, 1891 shall apply in relation to a depository as if it were a bank as defined in section 2 of that Act.

16. Depositories to indemnify loss in certain cases
    (1) Without prejudice to the provisions of any other law for the time being in force, any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall indemnify such beneficial owner.

    (2) Where the loss due to the negligence of the participant under sub-section (1) is indemnified by the depository, the depository shall have the right to recover the same from such participant.

17. Rights and obligations of depositories, etc.
    (1) Subject to the provisions of this Act, the rights and obligations of the depositories, participants and the issuer whose securities are dealt with by a depository shall be specified by the regulations.

    (2) The eligibility criteria for admission of securities into the depository shall be specified by the regulations.