Clients must be fit to trade in depository: NSE to brokers

With CDSL set to list on NSE post its IPO, the stock exchange has asked brokers to ensure their clients are 'fit and proper' to invest in securities of the depository as prescribed by market regulator Sebi norms.
Central Depository Services (India) Ltd (CDSL), promoted by BSE, would launch its initial public offering (IPO) on June 19. The issue would close on June 21, following which it would list on the National Stock Exchange (NSE).
"Members are required to ensure that their clients who are executing transactions in the securities issued by listed depositories through them are fit and proper," NSE said in a recent circular.

As per Sebi's (Depositories and Participants) Regulations 2012, no person can directly or indirectly, acquire or hold equity shares or voting rights of a depository unless he is a "fit and proper" person.
An individual would be considered 'fit and proper' if he has a financial integrity and good reputation, among others.
The person/entity should not have been convicted by a court for any offence involving moral turpitude or any economic offence or any offence against the securities laws.
Among others, the person/entity should not be barred from accessing the securities market.
CDSL would become the first depository to be listed on the domestic capital markets.