Nsdl Lays Down Norms For Participants

These include comprehensive guidelines for manner of dealings, conduct of business by users, code of ethics to be adopted by participants, requirements for hardware and software, conduct of business with clearing corporations and members and maintenance of records.

According to the Business Rules, a copy of which is available with Business Standard, the applicant who intends to be a depository participant (DP) is expected to provide security-wise details to the depository in respect of all investments made by it both in quoted as well as unquoted securities.

The networth of the DP will be computed as the sum of paid-up capital and free reserves (total reserves less revaluation reserves and specified reserves) less accumulated losses, receivables (more than six months old), intangible assets, preliminary and pre-operative expenses not written off, value of stock exchange card, pledged securities and assets, investment in group companies, networth required for other depositories and loans and advances to group companies or associates. Every participant, issuer or a registrar and transfer agent is expected to maintain records relating to its business for a period of five years. The participant will have the discretion to charge any fees to its clients and can also charge different types of fees to its various clients.

 

The issuer or its registrar and transfer agent and participant shall install the hardware and software which shall be in conformity with the configuration laid out in the Business Rules. The depository will provide users an application software called the participant module and any upgradations or modifications to such software on payment of such fees as may be determined by the depository. These Business Rules are applicable to all users of the depository as well as the clients to the extent specified therein. They are subject to the jurisdiction of the courts of Mumbai irrespective of the place of business of the users of the depository system in India.

NSDL plans to begin operation in Mumbai to start with, and then depending on the response will gradually spread its wings. C B Bhave, managing director, NSDLsaid: " When NSE commenced operations, nobody thought that it would grow to become the largest exchange in the country. We are optimistic that as paperless trading becomes popular, the depository will also grow."