Sebi Clears Bse-Boi Depository Proposal

The Securities and Exchange Board of India has cleared the proposal of the Central Depository Services Ltd (CDSL), the depository promoted by the Bombay Stock Exchange and Bank of India.

According to Sebi sources, the certificate of registration was issued yesterday.

"Sebi has granted a registration to the depository promoted by the BSE. It becomes the second depository in the country to receive a clearance from Sebi," a senior Sebi source said.

The Securities and Exchange Board of India sources said that the clearance was granted under Sebi Regulations (Depositories).

"The certificate of registration is granted after sponsors of the depository satisfied the basic criteria under Sebi Regulations. Bank of India and Bombay Stock Exchange are the two main sponsors in the depository. They will put the mandatory 51 per cent capital.

The rest is expected to be arranged from other sources," the Sebi source added.

A clearance from CBDT is also expected soon. Central Depository Services will then have to set up its systems and apply for a commencement of business certificate from Sebi.

"The commencement of business certificate will be granted only after all systems are in place and the necessary capital of Rs 100 cr is brought by the depository. Sponsors of the depository have assured us of that," the source said.

The Securities and Exchange Board of India has strongly supported competition in the depository segment.

The market regulator's clearance will expedite the process of setting of the country's second depository.

"Depository is a service industry. We cannot have a monopoly in the service industry. The Bombay Stock Exchange has promised a competitive fee structure. We hope that the investor gets the best service from them," the source added.

The Bombay Stock Exchange is branding its depository as a utility service for the users and by the users. They have also announced that there will be no custody charges for holding shares.

A fee will be charged per trade in demat segment.