SEBI Regulations 2018 - 03.10.2018
SEBI Regulations 2018 - 03.10.2018
SEBI Regulations 2018 - 03.10.2018
EXTRAORDINARY
PUBLISHED BY AUTHORITY
NOTIFICATION
CHAPTER I
PRELIMINARY
Short title and commencement
1. (1) These regulations may be called the Securities and Exchange Board of India
(Depositories and Participants) Regulations, 2018.
(2) They shall come into force on the date of their publication in the Official Gazette.
Definitions
2. (1) In these regulations, unless the context otherwise requires, the terms used in these
regulations shall bear the meanings assigned to them below, and their cognate expressions
shall be construed accordingly,-
(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
(b) “applicant” means any person or persons who, acting alone or in combination with
another person proposes to establish a depository under these regulations and holds fifteen
percent shareholding of the depository;
Page 1 of 80
(c) "associate" shall have the same meaning as assigned to it under clause (b) of sub-
regulation (1) of regulation 2 of the Securities Contracts (Regulation) (Stock Exchanges
and Clearing Corportions) Regulations, 2018 or any amendments thereof;
(d) "Board" means the Securities and Exchange Board of India established under section 3
of the Securities and Exchange Board of India Act, 1992 (15 of 1992);
1[
(e) ““Change in control” –
(i) in case of a body corporate –
(A) if its shares are listed on any recognised stock exchange, shall be construed with
reference to the definition of control in terms of regulations framed under clause (h)
of sub-section (2) of section 11 of the Act;
(B) if its shares are not listed on any recognised stock exchange, shall be construed
with reference to the definition of control as provided in sub-section (27) of Section 2
of the Companies Act, 2013 (18 of 2013);
(ii) in a case other than that of a body corporate, shall be construed as any change in its
legal formation or ownership or change in controlling interest.
Explanation – For the purpose of sub-clause (ii), the expression “controlling interest”
means an interest, direct or indirect, to the extent of not less than fifty percent of voting
rights or interest;]
2
[***]
(g) “Depositories Act” means the Depositories Act, 1996 (22 of 1996);
(h) “form” means any of the forms specified in the First Schedule;
(i) "governing board” means the board of directors of a depository;
(j) “inspecting officer” means any person authorised by the Board under regulation 84;
3
[(k) “key management personnel” shall include:
1
Substituted by the Securities and Exchange Board of India (Change in Control in Intermediaries) (Amendment)
Regulations, 2023 w.e.f. 17-1-2023. Prior to the substitution, clause (e) read as under:
““change in control” –
(i) in case of a body corporate –
(A) if its shares are listed on any recognised stock exchange, shall be construed with reference to the
definition of control in terms of regulations framed under clause (h) of sub-section (2) of section
11 of the Act;
(B) in any other case, shall be construed as change in the controlling interest in the body corporate;
Explanation: For the purpose of para (B) of this sub-clause, the expression “controlling interest” means
an interest, whether direct or indirect, to the extent of at least fifty-one percent of voting rights in the
body corporate;
(ii) in a case other than that of a body corporate, shall be construed as any change in its legal formation or
ownership.”
2
Clause (f) omitted by the Securities and Exchange Board of India (Change in Control in Intermediaries)
(Amendment) Regulations, 2023 w.e.f. 17-1-2023.
3
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, clause (k) read as under:
“(k) "key management personnel" would include a person serving as head of any department, or in such senior
executive position that stands higher in hierarchy to the head(s) of the department(s) in the depository, or any
person who directly reports to chief executive officer or to the director of the governing board of the
Page 2 of 80
i. any person appointed as the managing director or executive director; or
ii. a person serving as head of any department or vertical and directly reports to the
managing director or to the directors on the governing board of the depository; or
iii. a person serving as head of a core function as specified under Fourth Schedule of
these regulations; or
iv. a person who stands higher in hierarchy to the head of any department(s) handling
core function(s) in the depository; or
v. reporting officials of key management personnel; or
vi. any person defined as a “key managerial personnel” under the Companies Act,
2013; or
vii. any other person who is key decision making authority at the level of the depository
or its direct or indirect material subsidiaries, as identified by the managing director
or its Nomination and Remuneration Committee:
Provided that in the case of a subsidiary of a depository that is regulated by a financial sector
regulator; the norms specified by such a regulator may be considered for determining as to
whether the person at the subsidiary is designated as a key management personnel.]
4
[(ka) “non-independent director" means a director elected or nominated by the
shareholders who are neither depository participants nor their associates and agents;]
(l) "persons acting in concert" in the context of acquisition or holding of shares or voting
rights or control shall mutatis mutandis have the same meaning as assigned to it in clause
(q) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any amendments
thereof;
(m) "public interest director" means an independent director representing the interests of
investors in securities market and who is not having any association, directly or indirectly,
which in the opinion of the Board, is in conflict with his role;
(n) "regulatory department" means a department of a depository which is entrusted with
regulatory powers and duties and includes such department as may be specified by the
Board;"
(o) “Schedule” means any of the Schedules annexed to these regulations;
5
[***]
depository, or any person upto two levels below the chief executive officer or managing director, or any other
person as may be identified by its Nomination and Remuneration Committee;”
4
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
5
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, clause (p) read as under:
“(p) "shareholder director" means a director who represents the interest of shareholders, and elected or nominated
by such shareholders who are not depository participants, or their associates and agents;”
Page 3 of 80
(2) Words and expressions used and not defined in these regulations but defined in the Act, the
Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996, the Companies Act,
2013 or any rules or regulations made thereunder shall have the same meanings respectively
assigned to them in those Acts, rules or regulations made thereunder or any statutory
modification or re-enactment thereto, as the case may be.
CHAPTER II
REGISTRATION OF DEPOSITORY
Page 4 of 80
6. (1) The Board shall not consider an application under regulation 3, unless the applicant
belongs to the category of shareholders eligible to hold upto 15% share capital of the
depository in terms of sub-regulation (1) and (2) of regulation 21.
(2) The Board shall not consider an application under regulation 3, unless the applicant is
a fit and proper person as described in sub-regulation 2 of regulation 23.
6
Renumbered as (i) by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
7
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
Page 5 of 80
(iii) A director, committee member or employee of a depository shall not receive any
compensation or any other financial benefit from the companies where the
depository has invested, other than fees and expenses related to the governing board
and committee meetings.]
(d) the shareholding of the applicant in the depository shall be locked-in for a period of five
years from the date of grant of registration by the Board.
(e) the depository complies with the shareholding and governance structure requirements
specified in these regulations;
(f) if any information previously submitted by the depository or the applicant to the Board
is found to be false or misleading in any material particular, or if there is any change in
such information, the depository shall forthwith inform the Board in writing;
(g) the depository shall redress the grievances of the participants and the beneficial owners
within 8[twenty-one calendar days] of the date of receipt of any complaint from a
participant or a beneficial owner and keep the Board informed about the number and
the nature of redressals;
(h) the depository shall make an application for commencement of business under
regulation 11 within one year from the date of grant of certificate of registration under
this regulation; and
(i) the depository shall amend its bye-laws from time to time as may be directed by the
Board;
(j) any other condition as the Board may deem fit in the interest of securities market.
8
Substituted for “thirty days” by the Securities and Exchange Board of India (Facilitation of Grievance Redressal
Mechanism) (Amendment) Regulations, 2023 w.e.f. 18-08-2023.
Page 6 of 80
(2) The decision of the Board to reject the application shall be communicated to the applicant
in writing within thirty days of such decision, stating therein the grounds on which the
application has been rejected.
CHAPTER III
CERTIFICATE OF COMMENCEMENT OF BUSINESS
Page 7 of 80
(d) the network through which continuous electronic means of communications are
established between the depository, participants, issuers and issuers’ agents is secure
against unauthorised entry or access;
(e) the depository has established standard transmission and encryption formats for
electronic communications of data between the depository, participants, issuers and
issuers’ agents;
(f) the physical or electronic access to the premises, facilities, automatic data processing
systems, data storage sites and facilities including back up sites and facilities and to the
electronic data communication network connecting the depository, participants, issuers
and issuers’ agents is controlled, monitored and recorded;
(g) the depository has a detailed operations manual explaining all aspects of its functioning,
including the interface and method of transmission of information between the
depository, issuers, issuers’ agents, participants and beneficial owners;
(h) the depository has established adequate procedures and facilities to ensure that its
records are protected against loss or destruction and arrangements have been made for
maintaining back up facilities at a location different from that of the depository;
(i) the depository has made adequate arrangements including insurance for indemnifying
the beneficial owners for any loss that may be caused to such beneficial owners by the
wrongful act, negligence or default of the depository or its participants or of any
employee of the depository or participant; and
(j) the grant of certificate of commencement of business is in the interest of investors in
the securities market.
(2) The Board shall, before granting a certificate of commencement of business under this
Chapter make a physical verification of the infrastructure facilities and systems established
by the depository.
Networth certificate
15. (1) Every depository shall maintain networth as specified under regulation 14 (1) (a) at all
times and submit an audited networth certificate from the statutory auditor on a yearly basis,
by the thirtieth day of September of every year for the preceding financial year.
Explanation: For the purposes of this regulation, ‘networth of a depository’ means the
aggregate value of paid up equity share capital and free reserves (excluding statutory funds,
benefit funds and reserves created out of revaluation) reduced by the investments in
businesses, whether related or unrelated, aggregate value of accumulated losses and deferred
expenditure not written off, including miscellaneous expenses not written off.
(2) Every depository shall within one month of the date of the holding of its annual general
meeting, furnish to the Board a copy of its audited balance-sheet and profit and loss account
for the preceding financial year.
Page 8 of 80
16. After considering the application under regulation 14 with reference to the matters specified
in sub-regulation (1) of regulation 14 and making physical verification under sub-regulation
(2) of that regulation, if the Board is satisfied that the depository is eligible to commence
business as a depository, shall grant a certificate of commencement of business in Form D
of the First Schedule.
CHAPTER IV
OWNERSHIP OF DEPOSITORY
Definitions
19. For the purposes of this Chapter:
(1) "banking company" shall have the same meaning as assigned to it in clause (c) of
section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(2) "insurance company" shall have the same meaning as assigned to it in sub-section (8)
of section 2 of the Insurance Act, 1938 (4 of 1938);
(3) "person resident in India" shall have the same meaning as assigned to it in clause (v) of
section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);
(4) "person resident outside India" shall have the same meaning as assigned to it in clause
(w) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).
(5) “public financial institution” shall have the same meaning as assigned to it in sub-section
(72) of section 2 of the Companies Act, 2013
General Conditions
Page 9 of 80
20. (1) Save as otherwise provided in these regulations, the shareholding or voting rights of
any person in a depository shall not exceed the limits specified in these regulations at any
point of time.
(2) For determining the shareholding of any person in a depository as specified in these
regulations, any instrument held, owned or controlled, directly or indirectly, by a person that
entitles him the voting rights or provides for entitlement to voting rights or equity shares or
any other rights over equity shares at any future date, shall also be included:
Provided that any equity or rights over equity, arising from such instruments in excess of
limit of shareholding specified in this Chapter on the date of commencement of these
regulations, shall be reduced to the specified limit within a period of five years or such other
period as may be specified by the Board from time to time, from the date of such
commencement.
Shareholding in a Depository
21. (1) No person resident in India shall at any time, directly or indirectly, either individually
or together with persons acting in concert, acquire or hold more than five percent of the paid
up equity share capital in a Depository:
Provided that,—
(i) a stock exchange;
(ii) a depository;
(iii) a banking company;
(iv) an insurance company; and
(v) a public financial institution,
may acquire or hold, either directly or indirectly, either individually or together with
persons acting in concert, upto fifteen percent of the paid up equity share capital of a
Depository.
(2) No person resident outside India, directly or indirectly, either individually or together
with persons acting in concert, shall acquire or hold more than five percent of the paid up
equity share capital in a Depository:
may acquire or hold, either directly or indirectly, either individually or together with
persons acting in concert, upto fifteen percent of the paid up equity share capital of a
Depository.
Explanation: For the purposes of proviso to sub-regulation (2), the persons referred to in
clauses (i) to (vi) shall mean persons recognised/ incorporated outside India.
Page 10 of 80
(3) Subject to the limits as otherwise prescribed by the Central Government from time to
time, the combined holding of all persons resident outside India in the paid up equity share
capital of a depository shall not exceed, at any time, forty-nine percent of its total paid up
equity share capital.
9
The word “listed” omitted by the SEBI (Depositories and Participants) (Amendment) Regulations, 2021 w.e.f.
13-08-2021.
10
Ibid.
11
Omitted by the SEBI (Depositories and Participants) (Amendment) Regulations, 2021 w.e.f. 13-08-2021. Prior
to its omission, it read as –
“(2) Any person(s) who acquires equity shares or voting rights, in a depository, directly or indirectly, either
individually or together with persons acting in concert, that entitles the person(s) so acquiring to exercise voting
rights of two percent upto five percent, shall seek approval of the Board within fifteen days of such acquisition.”
12
The words “sub-regulation (2) or” omitted by the SEBI (Depositories and Participants) (Amendment)
Regulations, 2021 w.e.f. 13-08-2021.
13
Omitted by the SEBI (Depositories and Participants) (Amendment) Regulations, 2021 w.e.f. 13-08-2021. Prior
to its omission, it read as –
“If approval under sub-regulation (2) is not granted by the Board to any person, such person shall forthwith
divest his entire shareholding in the depository.”
Page 11 of 80
22A. The depository shall put in place a monitoring mechanism as specified in Part E of Second
Schedule to ensure compliance with the shareholding restrictions prescribed in these
regulations at all times.
14
[Requirement and criteria of fit and proper
23(1) (a) The ‘fit and proper person’ criteria shall apply to the applicant, depository, its
shareholders, directors and key management personnel at all times.
(b)The depository shall ensure that all its shareholders, directors and key management
personnel are fit and proper persons at all times.
(2) For the purpose of these regulations, an applicant, or a depository shall be deemed to be
a fit and proper person, if -
(a) such a person has a general reputation and record of fairness and integrity, including
but not limited to —
(i) financial integrity;
(ii) good reputation and character; and
(iii)honesty;
(b) such a person has not incurred any of the following disqualifications—
(i) conviction of the person by a court for any economic offence or an offence of the
securities laws;
(ii) an Order for winding up has been passed against the person;
(iii) the person has been declared insolvent and has not been discharged;
(iv) an Order; restraining, prohibiting or debarring the person from dealing in
securities or from accessing the securities market, has been passed by the Board
and a period of three years from the date of the expiry of the period specified in
the Order has not elapsed;
(v)any other Order against the person which has a bearing on the securities market,
has been passed by the Board and a period of three years from the date of the
Order has not elapsed:
14
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment)
Regulations, 2023 w.e.f . 23-08-2023. Prior to its substitution, regulation 23 read as under:
“Requirement of fit and proper
23(1)The depository shall ensure that all its directors and key management personnel are fit and proper persons at
all times.
(2) For the purpose of determining whether an applicant, depository, its shareholder, director, key management
personnel or a participant, is a ‘fit and proper person’ under these regulations, the criteria specified under
regulation 20 of Securities Contracts (Regulation) (Stock exchanges and Clearing Corporations) Regulations,
2018, shall be applicable
(3) If any question arises on the decision of a depository as to whether a person is fit and proper, the Board’s
decision on such question shall be final.”
Page 12 of 80
Provided that for the purpose of sub-clauses (iv) and (v), any Order passed by the Board
against a depository shall not affect the operation of such a depository unless expressly
mentioned in the Order.
(vi) the Board has initiated recovery proceedings under the Act or the Securities and
Exchange Board of India Act, 1992 (15 of 1992) that are pending;
(vii) the person is not financially sound or has been categorized as a willful defaulter;
and
(viii) any other disqualification as may be specified by the Board from time to time.
(3) For the purpose of these regulations, the shareholders, directors or key management
personnel of the depository, shall be deemed to be fit and proper if,-
(a) they fulfil the criteria specified under sub-regulation (2) of this regulation; and
(b) they have not been found to be of unsound mind by a court of competent jurisdiction
and have not been declared a fugitive economic offender; and
(c) they have not been convicted of an offence involving moral turpitude.
(4) If any director or key management personnel of a depository is not deemed to be fit and
proper under sub-regulation (3), the depository shall replace such a person within thirty days
from the date of such disqualification, failing which the fit and proper person criteria may
be invoked against the depository.
(5) Any disqualification of the depository under sub-regulation (2) shall not have any bearing
on the fit and proper status of the directors or key management personnel unless the directors
or key management personnel are also found to incur the same disqualification in the said
matter.
(6) An order passed against the person by any other regulatory authority may be taken into
account by the Board while determining the fit and proper person criteria.
(7) If any question arises on the decision of a depository as to whether a person is a fit
and proper person, the decision of the Board on such question shall be final.]
CHAPTER V
GOVERNANCE OF DEPOSITORY
15
Substituted for the words “shareholder directors” by the Securities and Exchange Board of India (Depositories
and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
Page 13 of 80
(b) public interest directors; and,
(c) managing director.
(2) Subject to prior approval of the Board, the chairperson shall be elected by the governing
board from amongst the public interest directors.
16
(3) The number of public interest directors shall not be less than the number of [non-
independent directors] on the governing board of a Depository.
(4) The number of public interest directors shall not be less than the number of 17[non-
independent directors] to constitute the quorum for the meeting of the governing board.
(5) The voting on a resolution in the meeting of the governing board shall be valid only
when the number of public interest directors that have cast their vote on such resolution is
equal to or more than the number of 18[non-independent directors] who have cast their vote
on such resolution.
(6) The casting vote in the meetings of the governing board of the depository shall be with
the chairperson of the governing board.
(7) The managing director shall be included in the category of 19[non-independent directors].
(8) Any employee of a depository may be appointed on the governing board in addition to
the managing director, and such director shall be deemed to be a 20[non-independent
directors].
(9) No depository participant or their associates and agents, irrespective of the depository of
which they are members, shall be on the governing board of a depository.
(10) A person who is a director in an entity, that itself is a depository participant or
has associate(s) as depository participant, he/she will be deemed to be a depository
participant:
Provided a person shall not be deemed to be Depository Participant or their associate
for the purpose of sub-regulation 10, if he/she is on the board of a Public Financial Institution
or Bank which is in public sector, or which has no identifiable ultimate promoter, or the
ultimate promoter is in public sector or has well diversified shareholding, and
such Public Financial Institution or Bank or its associate is a Depository Participant:
Provided further that the independent directors of associates of Public Financial
Institution or Bank in public sector, who is a Depository Participant and where the majority
shareholding is that of such Public Financial Institution or Bank in public sector, shall not
be deemed to be Depository Participant for the purpose of sub-regulation 10.
(11) The appointment of director shall be subject to fulfillment of other requirements and
satisfaction of the Board.
16
ibid
17
Ibid
18
ibid
19
Substituted for the words “shareholder directors” by the Securities and Exchange Board of India (Depositories
and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
20
Ibid.
Page 14 of 80
(12) Depository shall monitor and ensure the compliance of sub-regulation 9 on continuous
basis, to ensure that directors appointed, on their governing board, do not get associated with
Depository Participant after approval and appointment.
(13) No foreign portfolio investor shall have any representation in the governing board of a
depository.
21
[(14) (a) The governing board of the depository shall 22[consist of] directors having the
requisite qualifications and experience in the areas of capital markets, finance and
accountancy, legal and regulatory practice, technology, risk management, and management
or administration:
Provided that the governing board of the depository shall 23[consist of] at least one public
interest director having the requisite qualification and experience in each of the areas of
capital markets, finance and accountancy, legal and regulatory practice, and technology.
(b) The depository may also appoint directors having qualification and experience in other
areas which may be specific to them:
24
Provided that the depository shall ensure that the governing board collectively [consists
of] directors with qualification and experience as specified at clause (a) above.
21
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
22
Substituted for the words “comprise of” by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2023 w.e.f . 23-08-2023.
23
ibid
24
Substituted for the words “comprises of” by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2023 w.e.f . 23-08-2023.
25
Substituted for the words “shareholder directors” by the Securities and Exchange Board of India (Depositories
and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
26
Substituted for the words “nominated by” by the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
Page 15 of 80
(3) Public interest directors shall be 27[appointed] for a term of three years, extendable
by another term of three years, subject to performance review in the manner as may be
specified by the Board:
Provided that post the expiry of term(s) at a depository, a public interest director may
be 28[appointed with the prior approval of] for a term of three years in other depository
or recognized stock exchange or a recognized clearing corporation, only after a cooling-
off period of one year:
Provided further that a person shall be 29[appointed] as a public interest director for a
maximum of three terms across a depository 30[or] a recognized stock exchange 31[or] a
recognized clearing corporation, subject to a maximum age limit of seventy five years.
(4) A public interest director on the board of a depository shall not act simultaneously as
director on the board of its subsidiary or on the board of any other depository or
recognized stock exchange or recognized clearing corporation or on the board of
subsidiary of such other depository or recognized stock exchange or recognized clearing
corporation.
(5) A public interest director on the board of a depository shall not act simultaneously
as member on more than five committees of that depository.
(6) A public interest director on the board of a depository shall keep its governing board
apprised of any conflict of interest, which may arise as a result of the public interest
director providing services, either directly or indirectly, to depository participants or their
associates and agents.
(7) No public interest director shall become a 32[non-independent director] unless there
is a cooling-off period of three years after ceasing to be a public interest director
(8) No public interest director on the governing board of a depository shall become a
director on the board of subsidiary of that depository unless there is a cooling-off period
of three years after ceasing to be a public interest director.
(9) Public interest directors shall be remunerated only by way of payment of sitting fees
as admissible to independent directors in the Companies Act, 2013.
(10) If any issue arises as to whether an assignment or position of a public interest director
is in conflict with his role, the Board’s decision shall be final.
(11) For the purpose of this regulation, the procedure for appointment of directors is
prescribed under Part C of the Second Schedule.
27
Substituted for the words “nominated” by the Securities and Exchange Board of India (Depositories and
Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
28
Ibid.
29
Ibid.
30
Substituted for the word “or” by the Securities and Exchange Board of India (Depositories and Participants)
(Amendment) Regulations, 2023, w.e.f. 28-08-2023.
31
Ibid.
32
Substituted for the words “shareholder directors” by the Securities and Exchange Board of India (Depositories
and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
Page 16 of 80
Appointment of Managing Director
26. (1) The appointment, renewal of appointment and termination of service of the managing
director of a depository shall be subject to prior approval of the Board.
(2) Every depository shall, subject to the guidelines issued by the Board from time to time,
determine the qualification, manner of appointment, terms and conditions of appointment
and other procedural formalities relating to the selection/ appointment of the managing
director.
(3) The appointment of the managing director shall be for a term not exceeding five years:
Provided that post the completion of first term as Managing Director, the depository shall
conduct the appointment process afresh:
Provided further that a person may be appointed as Managing Director by the depository
for a maximum 33[period of ten years] subject to a maximum age limit of sixty five years.
(4) The managing director of a depository shall not—
(a) be a shareholder or an associate of a shareholder of a depository or shareholder of an
associate of a depository;
(b) be a depository participant, or his associate and agent, or shareholder of a depository
participant or shareholder of an associate and agent of a depository participant; or
(c) hold any position concurrently in the subsidiary of a depository or in any other entity
associated with a depository:
Provided that the managing director of a depository may be appointed on the governing
board, but not as managing director, of the subsidiary or associate of a depository.
(5) The managing director shall be liable for removal or termination of services by the
governing board of the depository with the prior approval of the Board for failure to give
effect to the directions, guidelines and other orders issued by the Board, or the rules,
instructions, the articles of association and bye-laws of the depository.
(6) The Board may suo motu remove or terminate the appointment of the managing director
if deemed fit in the interest of securities market:
Provided that no managing director shall be removed unless he has been given a reasonable
opportunity of being heard.
(7) The conditions specified under this regulation for appointment of managing director shall
be applicable to a person holding position as managing director in a depository on the date
of commencement of these regulations.
Explanation: For the purpose of sub-regulation (7), the applicability shall be determined
post the completion of the existing term and the prior term(s) completed by a managing
director on the governing board of a depository shall also be considered while determining
the eligibility.
33
Substituted for the words “of two terms not exceeding five years each” by the Securities and Exchange Board
of India (Depositories and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
Page 17 of 80
34[Code
of Conduct for the governing board, directors, committee members and key
management personnel]
27. 35[(1) The governing board, directors, committee members and key management personnel
of a depository shall abide by the Code of Conduct specified under Part- B of Third
Schedule of these regulations.]
36
[***]
(3) Every director and key management personnel of a depository shall satisfy the fit and
proper person criteria at all times as per sub-regulation (2) of regulation 23.
37
[***]
34
Substituted for the words “Code of Conduct for directors and key management personnel” by the Securities and
Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
35
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, sub-regulation (1) read as under:
“(1) Every director of a depository shall abide by the Code of Conduct specified under Part-B of Third Schedule
of these regulations.”
36
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, sub-regulation (2) read as under:
“(2) Every director and key management personnel of a depository shall abide by the Code of Ethics specified
under Part-C of Third Schedule of these regulations.”
37
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, sub-regulation (4) read as under:
“(4) The Board may, for any failure by the directors to abide by these regulations or the Code of Conduct or Code
of Ethics or in case of any conflict of interest, either upon a reference from the depository or suo motu, take
appropriate action including removal or termination of the appointment of any director, after providing him a
reasonable opportunity of being heard.”
38
Substituted for the words “comprise of” by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2023 w.e.f . 23-08-2023.
Page 18 of 80
(7) The tenure of a key management personnel, other than a director, in a department, shall
be for a fixed period, as may be decided by the Nomination and Remuneration committee.
Explanation: For the purpose of sub-regulation (7), the tenure refers to the period of posting
as key management personnel in a regulatory department, which shall be for a fixed period.
29 (1) Every depository shall identify and segregate its functions into the following verticals:
(a) Critical Operations;
(b) Regulatory, Compliance, Risk Management and Investor Grievances; and
(c) Other functions including business development.
(2) The functions of the verticals under sub-regulation (1) above are provided at Fourth
Schedule of these regulations.
(3) The functions under the verticals as provided at clause (a) and (b) of sub-regulation 1
shall be given higher priority by the depository over the functions under the vertical as
provided at clause (c) of sub-regulation (1).
(4) Every depository shall periodically and objectively assess the adequacy of resources
allocated to the first two verticals as specified in clause (a) and (b) of sub-regulation (1).
(5) Every depository shall adopt a "Chinese Wall" policy which separates the functions
under vertical as provided at clause (b) of sub-regulation (1) from the functions of other
verticals.
(6) The employees referred to in sub-regulation (5) shall not communicate any information
concerning their activity to any one in other verticals and may be physically segregated
from employees in other verticals including with respect to access controls:
Provided that in exceptional circumstances, employees from other verticals may be given
confidential information on "need to know" basis, under intimation to the Compliance
Officer.]
39
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, regulation 29 read as under:
“29. Segregation of regulatory departments
The depository shall segregate its regulatory departments from other departments in the manner specified in
Fourth Schedule of these regulations.”
Page 19 of 80
Statutory committees
40
30. (1) The depository shall constitute the committees as per sub-regulation (2) [,] sub-
regulation (3) and 41[and sub-regulation 3A] .
49
(4) [The composition, quorum and functions of the committees under sub-regulation (2),
(3) and (3A) shall be in the manner as specified by the Board from time to time.]
50[Grievance Redressal Panel
30A. Every depository shall have Grievance Redressal Panel(s) to resolve investor grievances
which shall function in the manner as may be specified by the Board.]
40
Substituted for the words “and” by the Securities and Exchange Board of India (Depositories and Participants)
(Amendment) Regulations, 2023, w.e.f. 28-08-2023.
41
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
42
Substituted for the words “comprising of” by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2023 w.e.f . 23-08-2023.
43
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019. Prior to its omission, it read as “selection”.
44
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
45
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, clause(b) read as under-
[[*]Grievance redressal committee; and]
Omitted the word “investor” by the Securities and Exchange Board of India (Depositories and Participants)
(Amendment) Regulations, 2019 w.e.f. 04-06-2019.
46
Substituted for the words “comprising of” by the Securities and Exchange Board of India (Depositories and
Participants) (Second Amendment) Regulations, 2023 w.e.f . 23-08-2023.
47
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, clause(b) read as under-
“(b) Advisory committee;”
48
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
49
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, sub-regulation (4) read as under-
“(4)The composition, quorum and functions of the committees under sub-regulation (2) and sub-regulation (3)
shall be in the manner as specified by the Board from time to time.”
50
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
Page 20 of 80
Disclosure and corporate governance norms
31. (1) The disclosure requirements and corporate governance norms as specified for listed
companies shall mutatis mutandis apply to a depository.
(2) The governing board of a depository shall confirm compliance of sub-regulation (1) in
writing on half yearly basis to the Board.
(6) Every depository shall also appoint an independent external agency to evaluate its
performance and the performance of its statutory committees within such periodicity and in
such a manner as may be specified by the Board.
(7) Every depository shall disclose, on their website, the agenda and minutes of its governing
board meetings pertaining to regulatory, compliance, risk management and investor
grievance areas, after approval of such minutes.
(8) If any director or key management personnel is or becomes aware of any act of
wrongdoing at the depository and fails to report to its governing board or to the Board, such
a person may be liable for action under these regulations, after providing him a reasonable
opportunity of being heard.]
CHAPTER VI
REGISTRATION OF PARTICIPANT
51
Ibid.
Page 21 of 80
certifying that the participant complies with the eligibility criteria including adequate
infrastructure as provided for in these regulations and the bye-laws of the depository.
Page 22 of 80
52
[Provided that the stock broker shall have a networth of rupees three crores {within
one year of the date of notification of the Securities and Exchange Board of India
(Depositories and Participants) (Amendment) Regulations, 2022}, which shall be
increased to rupees five crores {within two years of the date of notification of the
Securities and Exchange Board of India (Depositories and Participants)
(Amendment) Regulations, 2022}:
Provided further that a self-clearing member fulfilling the networth requirements as
provided under the Securities and Exchange Board of India (Stock Brokers)
Regulations, 1992 shall also be eligible to register as a depository participant.]
(ix) a non-banking finance company, having a net worth of not less than rupees fifty
lakhs:
Provided that such company shall act as a participant only on behalf of itself and not
on behalf of any other person:
Provided further that a non-banking finance company may act as a participant on
behalf of any other person, if it has a net worth of rupees fifty crore in addition to the
net worth specified by any other authority;
(x) a registrar to an issue or share transfer agent who has a minimum net worth of rupees
ten crores and who has been granted a certificate of registration by the Board under
sub-section (1) of section 12 of the Act;
(b) the applicant is eligible to be admitted as a participant of the depository through which
it has made the application to the Board;
(c) the applicant has adequate infrastructure, systems, safeguards and trained staff to carry
on activity as a participant;
(d) the applicant is a fit and proper person 53[under the Securities and Exchange Board of
India (Intermediaries) Regulations, 2008]; and
(e) the grant of certificate of registration is in the interests of investors in the securities
market.
52
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2022 w.e.f. 23-02-2022. Prior to its substitution, the provisos read as –
“Provided that the stock broker shall have a minimum net worth of rupees fifty lakhs and the aggregate value of
portfolio of securities of the beneficial owners held in dematerialised form in a depository through him, shall not
exceed hundred times of the net worth of the stock broker:
Provided further that if the stock broker seeks to act as a participant in more than one depository, he shall comply
with the criteria specified in the first proviso separately for each such depository:
Provided also that where the stock broker has a minimum net worth of rupees ten crore, the limits on the aggregate
value of the portfolio of securities of the beneficial owners held in dematerialized form in a depository through
him shall not be applicable;”
53
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment)
Regulations, 2023 w.e.f . 23-08-2023.
Page 23 of 80
(2) The grant of certificate of registration in Form G of the First Schedule shall be subject
to the following, namely:—
(a) the participant shall pay the registration fee specified in Part A of the Second Schedule
in the manner specified in Part B thereof, within fifteen days of the receipt of intimation
from the Board;
(b) the participant shall comply with the provisions of the Act, Depositories Act, the bye-
laws, agreements and these regulations;
(c) the depository through which an application for certificate of registration has been
forwarded holds a certificate of commencement of business under regulation 16;
(d) where the participant proposes change in control, it shall obtain prior approval of the
Board for continuing to act as such after the change;
(e) if any information previously submitted by the participant to the Board is found to be
false or misleading in any material particular, or if there is any change in such information,
the participant shall forthwith inform the Board in writing ;
(f) the participant shall redress the grievances of beneficial owners within 54[twenty-one
calendar days] of the date of the receipt of the complaint and keep the depository informed
about the number and the nature of redressals; and
(g) the participant shall pay annual fees specified in Part A of the Second Schedule in the
manner specified in Part B thereof.
(3) The certificate of registration granted under sub-regulation (1) shall be valid unless it is
suspended or cancelled by the Board.
(4) The participant who has already been granted certificate of registration by the Board, prior
to the commencement of the Securities and Exchange Board of India (Change in
Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2016
shall be deemed to have been granted a certificate of registration, in terms of sub-
regulation (1).
(5) The participant, to keep the registration in force, shall pay registration fee as specified in
Part A of the Second Schedule for every five years from the sixth year of the date of grant
of certificate of registration or of the date of grant of certificate of initial registration
granted prior to the commencement of the Securities and Exchange Board of India
(Change in Conditions of Registration of Certain Intermediaries) (Amendment)
Regulations, 2016, as the case may be.
55[(6) The fee specified in sub-regulation (5) shall be paid one month prior to the expiry of the
block for which the fee has been paid.]
54
Substituted for “thirty days” by the Securities and Exchange Board of India (Facilitation of Grievance Redressal
Mechanism) (Amendment) Regulations, 2023 w.e.f. 18-08-2023.
55
Substituted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) (Regulations) 2021 w.e.f. 05-
05-2021. Prior to substitution the clause read as:
“(6) The fee specified in sub-regulation (5) shall be paid three months prior to the expiry of the block for which
the fee has been paid.”
Page 24 of 80
(7) The participant shall immediately intimate the Board, details of changes that have taken
place in the information that was submitted, while seeking registration.
CHAPTER VII
RIGHTS AND OBLIGATIONS OF DEPOSITORIES, PARTICIPANTS, ISSUERS,
MANNER OF SURRENDER OF CERTIFICATE OF SECURITY AND
CREATION OF PLEDGE OR HYPOTHECATION
Page 25 of 80
Rights and obligations of depositories, etc.
40. The depositories, participants, issuers, and issuers’ agents, in addition to the rights and
obligations laid down in the Depositories Act and the bye-laws shall have the rights and
obligations arising from the agreements entered into by them.
56
Inserted by the Securities and Exchange Board of India (Vault Managers) Regulations, 2021 w.e.f. 31-12-2021.
Page 26 of 80
Systems and procedures
44. Every depository shall have systems and procedures which will enable it to co-ordinate
with the issuer or its agent, and the participants, to reconcile the records of ownership of
securities with the issuer or its agent, as the case may be, and with participants, on a daily
basis.
Connectivity
45. Every depository shall maintain continuous electronic means of communication with all its
participants, issuers or issuers’ agents, as the case may be, clearing houses and clearing
corporations of the stock exchanges and with other depositories.
Withdrawal by participant
47. Every depository shall allow any participant to withdraw, or transfer its account, if the
request for such withdrawal or transfer is in accordance with conditions stipulated therefor
in the bye-laws of the depository.
Wind-down Plan.
51. Every depository shall devise and maintain a wind-down plan in accordance with
guidelines specified by the Board.
Explanation: For the purpose of this regulation, 'wind-down plan' means a process or plan
of action employed, for transfer of the beneficial owner accounts and other two operational
powers of the depository to an alternative institution that would take over the operations of
Page 27 of 80
the depository in scenarios such as erosion of net-worth of the depository or its insolvency
or its inability to provide critical depository operations or services.
Records to be maintained.
54. (1) Every depository shall maintain the following records and documents, namely :—
(a) records of securities dematerialised and rematerialised;
(b) the names of the transferor, transferee, and the dates of transfer of securities;
(c) a register and an index of beneficial owners;
(d) details of the holding of the securities of beneficial owners as at the end of each day;
(e) records of instructions received from and sent to participants, issuers, issuers’ agents and
beneficial owners;
(f) records of approval, notice, entry and cancellation of pledge or hypothecation, as the case
may be;
(g) details of participants;
(h) details of securities declared to be eligible for dematerialisation in the depository; and
(i) such other records as may be specified by the Board for carrying on the activities as a
depository.
(2) Every depository shall intimate the Board the place where the records and documents are
maintained.
(3) Subject to the provisions of any other law the depository shall preserve records and
documents for a minimum period of eight years.
Page 28 of 80
Consolidated account statement
56. In order to enable generation of a consolidated account statement for the use of a beneficial
owner in respect of all demat assets held by him, the depository shall enter into necessary
agreements for sharing of such information.
Prohibition of assignment
57. No depository shall assign or delegate to any other person its functions as a depository,
without the prior approval of the Board.
Agreement by participant
58. Every participant shall enter into an agreement with a beneficial owner before acting as a
participant on his behalf, in a manner specified by the depository in its bye-laws.
Separate accounts
59. (1) Separate accounts shall be opened by every participant in the name of each of the
beneficial owners and the securities of each beneficial owner shall be segregated, and shall
not be mixed up with the securities of other beneficial owners or with the participant’s own
securities.
(2) A participant shall register the transfer of securities to or from a beneficial owner’s
account only on receipt of instructions from the beneficial owner and thereafter confirm the
same to the beneficial owner in a manner as specified by the depository in its bye-laws.
(3) Every entry in the beneficial owner’s account shall be supported by electronic
instructions or any other mode of instruction received from the beneficial owner in
accordance with the agreement with the beneficial owner.
Statement of accounts
60. Every participant shall provide statements of account to the beneficial owner in such form
and in such manner and at such time as provided in the agreement with the beneficial owner.
Connectivity
62. Every participant shall maintain continuous electronic means of communication with each
depository in which it is a participant.
Page 29 of 80
63. Every participant shall have adequate mechanism for the purpose of reviewing, monitoring
and evaluating the participant’s internal accounting controls and systems.
Reconciliation
64. Every participant shall reconcile his records with every depository in which it is a
participant on a daily basis.
Returns
65. Every participant shall submit periodic returns to the Board and to every depository in
which it is a participant in the format specified by the Board or the bye-laws of the
depository, as the case may be.
Record of services
66. (1) Every participant shall maintain the following records and documents, namely :—
(a) records of all the transactions entered into with a depository and with a beneficial
owner;
(b) details of securities dematerialised, rematerialised on behalf of beneficial owners with
whom it has entered into an agreement;
(c)records of instructions received from beneficial owners and statements of account
provided to beneficial owners; and
(d) records of approval, notice, entry and cancellation of pledge or hypothecation, as the
case may be.
(2) Every participant shall make available for the inspection of the depository in which it is
a participant all records referred to in sub-regulation (1).
(3) Every participant shall allow persons authorised by the depository in which it is a
participant to enter its premises during normal office hours and inspect its records.
(4) Every participant shall intimate the Board the place where the records and documents
are maintained.
(5) Subject to the provisions of any other law, the participant shall preserve records and
documents for a minimum period of eight years.
Page 30 of 80
68. If a participant enters into an agreement with more than one depository, it shall maintain
the records specified in regulation 66 separately in respect of each depository.
Prohibition of assignment
69. No participant shall assign or delegate its functions as participant to any other person,
without the prior approval of the depository.
Agreement by issuer
70. Every issuer whose securities have been declared as eligible to be held in dematerialised
form in a depository shall enter into an agreement with the depository in accordance with
the provisions of regulation 43:
Provided that no agreement shall be required to be entered into in case,—
(i) the depository is the issuer of securities; or
(ii) the State or the Central Government is the issuer of Government securities.
57
[Redressal of investor grievances
72. (1) The issuer or its agent or any person who is registered as an intermediary under these
regulations shall redress investor grievances promptly but not later than twenty-one calendar
days from the date of receipt of the grievance and in such manner as may be specified by
the Board.
(2) The Board may also recognize a body corporate for handling and monitoring the process
of grievance redressal within such time and in such manner as may be specified.]
57
Substituted by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism)
(Amendment) Regulations, 2023 w.e.f. 18-08-2023. Prior to substitution, it read as follows:
“Redressal of investor grievances
Every issuer or its agent or any person who is registered as an intermediary under this regulation, shall redress
the grievances of beneficial owners within thirty days of the date of receipt of the complaint and keep the
depository informed about the number and nature of grievances redressed by it and the number of grievances
pending before it.”
Page 31 of 80
(2) Every depository shall credit five percent or such percentage as may be specified by the
Board, of its profits from depository operations every year to the Investor Protection Fund.
(3) The contribution to and utilization of the Investor Protection Fund shall be in accordance
with the norms specified by the Board.
Reconciliation
75. The issuer or its agent shall reconcile the records of dematerialised securities with all the
securities issued by the issuer, on a daily basis:
Page 32 of 80
Provided that where the State or the Central Government is the issuer of Government
securities, the depository shall, on a daily basis, reconcile the records of the dematerialised
securities.
Audit
76. (1) Every issuer shall submit audit report on a quarterly basis, starting from September 30,
2003, to the concerned stock exchanges audited by a qualified Chartered Accountant or a
practicing Company Secretary 58[or a practicing Cost Accountant], for the purposes of
reconciliation of the total issued capital, listed capital and capital held by depositories in
dematerialized form, the details of changes in share capital during the quarter and the in-
principle approval obtained by the issuer from all the stock exchanges where it is listed in
respect of such further issued capital.
(2) The audit report under sub-regulation (1) shall also give the updated status of the register
of members of the issuer and confirm that securities have been dematerialized as per requests
within twenty one days from the date of receipt of requests by the issuer and where the
dematerialization has not been effected within the said stipulated period, the report shall
disclose the reasons for such delay.
(3) The issuer shall immediately bring to the notice of the depositories and the stock
exchanges, any difference observed in its issued, listed, and the capital held by depositories
in dematerialised form.
Connectivity
77. Every issuer or its agent shall establish continuous electronic means of communication
with the depository with which it has entered into an agreement.
Information
78. Every issuer whose securities have been declared as eligible for dematerialisation in a
depository shall give information to the depository about book closures, record dates, dates
for the payment of interest or dividend, dates for annual general meetings and other
meetings, dates for redemption of debentures, dates for conversion of debentures and
warrants, call money dates and such other information at the time and in the manner as may
be specified by the depository in its bye-laws or agreement:
Provided that no such information would be required to be given to the depository where
the State or the Central Government is the issuer of Government securities.
58
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment)
Regulations, 2021 w.e.f. 26-10-2021.
Page 33 of 80
79. (1) If a beneficial owner intends to create a pledge on a security owned by him he shall
make an application to the depository through the participant who has his account in respect
of such securities.
(2) The participant after satisfaction that the securities are available for pledge shall make a
note in its records of the notice of pledge and forward the application to the depository.
(3) Within fifteen days of receipt of the application, the depository shall after concurrence
of the pledgee through its participant, create and record the pledge and send an intimation
of the same to the participants of the pledger and the pledgee.
(4) On receipt of the intimation under sub-regulation (3) the participants of both the pledger
and the pledgee shall inform the pledger and the pledgee respectively of the entry of creation
of the pledge.
(5) If the depository does not create the pledge, it shall send along with the reasons an
intimation to the participants of the pledger and the pledgee.
(6) The entry of pledge made under sub-regulation (3) may be cancelled by the depository
if pledger or the pledgee makes an application to the depository through its participant:
Provided that no entry of pledge shall be cancelled by the depository without prior
concurrence of the pledgee.
(7) The depository on the cancellation of the entry of pledge shall inform the participant of
the pledger.
(8) Subject to the provisions of the pledge document, the pledgee may invoke the pledge
and on such invocation, the depository shall register the pledgee as beneficial owner of such
securities and amend its records accordingly.
(9) After amending its records under sub-regulation (8) the depository shall immediately
inform the participants of the pledger and pledgee of the change who in turn shall make the
necessary changes in their records and inform the pledger and pledgee respectively.
(10) If a beneficial owner intends to create a hypothecation on a security owned by him he
may do so in accordance with the provisions of sub-regulations (1) to (9).
(11) The provisions of sub-regulations (1) to (9) shall mutatis mutandis apply in such cases
of hypothecation:
Provided that the depository before registering the hypothecatee as a beneficial owner shall
obtain the prior concurrence of the hypothecator.
(12) No transfer of security in respect of which a notice or entry of pledge or hypothecation
is in force shall be effected by a participant without the concurrence of the pledgee or the
hypothecatee, as the case may be.
59
[Explanation:- For the purpose of these regulations, “pledge” includes re-pledge of
securities for margin and / or settlement obligations of the client or such other purposes as
specified by the Board from time to time.]
Investment advice
59
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2020 w.e.f. 21-02-2020
Page 34 of 80
80. (1) A depository or a participant or any of their employees shall not render, directly or
indirectly, any investment advice about any security in the publicly accessible media,
whether real-time or non-real-time, unless a disclosure of his interest including long or short
position in the said security has been made, while rendering such advice.
(2) In case an employee of the depository or the participant is rendering such advice, he shall
also disclose the interest of his dependent family members and the employer including their
long or short position in the said security, while rendering such advice.
61
[Information and Data Sharing Policy
82A (1) Every depository and the company where the depository has invested shall lay down
a framework for sharing and monitoring of data, including confidential and sensitive
data.
(2) The policy framework shall contain:-
(a) means and manner of data sharing;
(b) types of data that can be shared;
(c) escalation matrix for data sharing;
60
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
61
Ibid.
Page 35 of 80
(d) provisions to have a digital database for recording details of information shared
along with recipients and reasons for sharing, etc.;
(e) mechanism to monitor the data shared, through use of technology, including
periodic audits to ensure compliance with the policy framework; and
(f) accountability mechanism including fixing individual accountabilities for any
breach of data sharing policy.]
CHAPTER VIII
LISTING OF SECURITIES
Listing
83. (1) Subject to the provisions of applicable laws in force, a depository may apply for listing
of its securities on a recognised stock exchange if,─
(a) it is compliant with the provisions of these regulations particularly those relating to
ownership and governance;
(b) it has completed three years of continuous depository operations immediately
preceding the date of application of listing; and
(c) it has obtained approval of the Board.
(2) The Board may specify such conditions as it may deem fit in the interest of the securities
market including those in relation to transfer of shares held by any person.
(3) A depository or its associates shall not list its securities on a recognized stock exchange
that is an associate of the depository.
CHAPTER IX
INSPECTION
62
[Power to call for information
83A. The Board may from time to time call for any information, documents or records from
the depository or its governing board or any shareholder or applicant thereof and from
depository participant.]
62
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
Page 36 of 80
(b) to look into the complaints received from the depositories, participants, issuers, issuers’
agents, beneficial owners or any other person;
(c) to ascertain whether the provisions of the Act, the Depositories Act, the bye-laws,
agreements and these regulations are being complied with by the depository,
participant, beneficial owner, issuer or its agent;
(d) to ascertain whether the systems, procedures and safeguards being followed by a
depository, participant, beneficial owner, issuer or its agent are adequate;
(e) to suo motu ensure that the affairs of a depository, participant, beneficial owner, issuer
or its agent, are being conducted in a manner which are in the interest of the investors
or the securities market.
Page 37 of 80
(4) It shall be the duty of every director, officer or employee of the depository, a participant,
a beneficial owner, an issuer or its agent to give to the inspecting officer all assistance in
connection with the inspection, which the inspecting officer may reasonably require.
Appointment of Auditor
89. The Board shall have the power to appoint an auditor to inspect or investigate, into the
books of account, records, documents, infrastructures, systems and procedures or affairs of
a depository, a participant, a beneficial owner, an issuer or its agent :
Provided that the auditor so appointed shall have the same powers of the inspecting or
investigating officer as stated in regulations 84 and 85, and the obligation of the depository,
participant, beneficial owner, issuer or its agent and their respective directors, officers and
employees, as the case may be, as stated in regulation 86, shall be applicable to the
inspection or investigation under this regulation.
Application of Chapter
91. Nothing contained in this Chapter shall be applicable to the State or the Central
Government where it is the issuer of the Government securities.
63[CHAPTER IX-A
ENFORCEMENT
Power to issue directions and levy penalty by the Board
63
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
Page 38 of 80
91A. (1) Without prejudice to exercise of its powers under the provisions of the Act,
Depositories Act, 1996 and rules and regulations made thereunder, the Board may, either
suo moto or on receipt of any information or during pendency of any inspection, inquiry
or investigation or on completion thereof, in the interest of public or trade or investors or
the securities market, issue such directions as it deems fit, including but not limited to any
or all of the following:─
(a) directing a person holding equity shares or rights over equity shares in a
depository in contravention of these regulations to divest his holding, in such manner
as may be specified in the direction;
(c) debarring any depository, any shareholder of such depository, or any associate
and agent of such shareholder, or any transferee of shares from such
shareholder, or applicant(s), director(s) and key management personnel(s) of the
depository from accessing the securities market and/or dealing in securities for such
period as may be determined by the Board.
(2) The Board may take action against a depository, director, committee member, key
management personnel, employee or any other person associated with the depository, for
any contravention or abetting the contravention of these regulations, including the Code
of Conduct specified under these regulations, provision of the Act, the Depositories Act,
1996, or any rules or regulations framed thereunder and any circulars or directions issued
by the Board, either upon a reference or suo motu, as it deems fit, including but not limited
to any or all of the following:—
(a) debarring a depository from introducing new products and services and
restricting its existing activities, products and services, etc
(b) imposing such monetary penalty as may be determined by the Board on the
depository, directors, committee members, key management personnel, employees
or any other person associated with the depository.
Explanation– For the removal of any doubt, it is clarified that the power of the Board to
take appropriate action under sub-regulation (2) is without prejudice to the exercise of its
powers under the provisions of the Act, the Depositories Act, 1996, and the rules and
regulations made thereunder:
Page 39 of 80
Provided that the Board while taking action under clauses (a) and (b) above shall have due
regard to the factors, including but not limited to any or all of the following:-
(i) a mala fide intent; or
(ii) an act of commission or an act of omission; or
(iii) negligence, or
(iv) repeated instances of genuine decision making that went wrong.
(3) While adjudging the quantum of monetary penalty under the Act, the Board shall have
due regard to the factors, including but not limited to any or all of the following:—
CHAPTER X
PROCEDURE FOR ACTION IN CASE OF DEFAULT
shall be dealt with in the manner provided under Chapter V of the Securities and Exchange
Board of India (Intermediaries) Regulations, 2008.
Page 40 of 80
(b) fails to furnish any information relating to its activity as an issuer as required under
these regulations;
(c) does not furnish the information called for by the Board under clause (a) of sub-
section (1) of section 18 of the Depositories Act or furnishes information which is false
or misleading in any material particular;
(d) does not co-operate in any inspection or investigation or enquiry conducted by the
Board;
(e) fails to comply with any direction of the Board issued under section 18 of the
Depositories Act,
the Board may, without prejudice to any other action which it may take under the Act, take
any action against such issuer or its agent under the Depositories Act.
(2) The depository shall conduct inspection of the records of the issuers or agents, as the
case may be to ensure that the records of dematerialised securities are reconciled with all
the securities issued by the issuer and submit its report to the Board if there is failure by the
issuers or agents in such reconciliation of records.
64[CHAPTER X-A
93A. (1) The Board may, exempt any person or class of persons from the operation of all or
any of the provisions of these regulations for a period as may be specified but not exceeding
twelve months, for furthering innovation 65[***] relating to testing new products, processes,
services, business models, etc. in live environment of regulatory sandbox in the securities
markets.
(2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the
applicant satisfying such conditions as may be specified by the Board including conditions
to be complied with on a continuous basis.
Explanation. — For the purposes of these regulations, "regulatory sandbox" means a live
testing environment where new products, processes, services, business models, etc. may be
deployed on a limited set of eligible customers for a specified period of time, for furthering
innovation in the securities market, subject to such conditions as may be specified by the
Board.]
CHAPTER XI
MISCELLANEOUS
64
Inserted by the SEBI (Regulatory Sandbox) (Amendment) Regulations, 2020, w.e.f. 17-04-2020.
65
The words “in technological aspects” omitted by the SEBI (Regulatory Sandbox) (Amendment) Regulations,
2021, w.e.f. 03-08-2021.
Page 41 of 80
66
[***]
67
[Power to relax the strict enforcement of the regulations.
96A (1) The Board may suo motu or upon an application made by a depository, for reasons
recorded in writing, grant relaxation from the strict compliance of any of the provisions
of these regulations subject to such conditions as the Board deems fit to impose in
the interests of investors in securities and the securities market, if the Board is satisfied
that :
(a) the non-compliance is caused due to factors beyond the control of the entity; or
(b) the requirement is procedural or technical in nature.
(2)The depository making an application referred to under sub-regulation (1) shall pay a
non-refundable fee of rupees one lakh payable by way of direct credit in the bank
account through NEFT/ RTGS/ IMPS or online payment using the SEBI payment
gateway or any other mode as may be specified by the Board from time to time.]
66
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission regulations 94 and 95 read as under:
Power to call for information
94. The Board may from time to time call for any information, documents or records from the depository or
its governing board or any shareholder or applicant thereof and from depository participant.
Directions by the Board
95. Without prejudice to exercise of its powers under the provisions of the Act, Depositories Act, 1996 and
rules and regulations made thereunder, the Board may, either suo motu or on receipt of any information
or during pendency of any inspection, inquiry or investigation or on completion thereof, in the interest of
public or trade or investors or the securities market, issue such directions as it deems fit, including but not
limited to any or all of the following:─
(a) directing a person holding equity shares or rights over equity shares in a depository in contravention
of these regulations to divest his holding, in such manner as may be specified in the direction;
(b) directing transfer of any proceeds or securities to the Investor Protection Fund of a depository;
(c) debarring any depository, any shareholder of such depository, or any associate and agent of such
shareholder, or any transferee of shares from such shareholder, or applicant(s), director(s) and key
management personnel(s) of the depository from accessing the securities market and/or dealing in
securities for such period as may be determined by the Board.
67
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023
Page 42 of 80
Repeal and savings
98. (1) On and from the commencement of these regulations, the Securities and Exchange
Board of India (Depositories and Participants) Regulations, 1996, shall stand repealed.
(2)Notwithstanding such repeal, anything done or any action taken or purported to have
been taken or contemplated under the repealed regulations before the commencement
of these regulations shall be deemed to have been done or taken or commenced or
contemplated under the corresponding provisions of these regulations.
(3)After the repeal of the regulations referred to in sub-regulation (1), any reference thereto
in any regulation, guideline, circular or direction issued by the Board shall be deemed
to be a reference to the relevant provisions of these regulations.
Page 43 of 80
FIRST SCHEDULE
FORMS
FORM A
Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018
[See regulation 3]
Application for grant of certificate of registration as depository
Securities and Exchange Board of India, C4-A, ‘G’ Block, Bandra-Kurla Complex,
Bandra (East) Mumbai 400051 - India,
INSTRUCTIONS
i. This form is meant for use by each person acting as the applicant of a depository.
ii. The applicant should complete this form, and submit it, along with all supporting
documents to the Board at its head office at Mumbai.
iii. This application form should be filled in accordance with the regulations.
iv. Application for grant of certificate of registration as depository, will be considered
provided it is complete in all respects.
v. All answers must be typed.
vi. Information which needs to be supplied in more detail may be given on separate sheets
which should be attached to the application form.
vii. The application must be signed and all signatures must be original.
viii. The application must be accompanied by an application fee as specified in the Second
Schedule to these regulations and by the draft bye-laws.
ix. Every page of the form and every additional sheet must be initialed by the authorised
signatory of the applicant.
x. All copies of documents should be attested as true by an authorised notary.
Page 44 of 80
(d) Details of affiliates and subsidiaries, and activities carried on by them.
(e) Details of registration with the Securities and Exchange Board of India, the Reserve Bank
of India or with any foreign regulatory authority of the applicant, its affiliates and its
subsidiaries (enclose documents supporting such registration).
(f) Net worth of the applicant (enclose a copy of the latest audited financial statements).
(g) Percentage and amount of the paid up capital of the proposed depository which the
applicant is to hold.
6. Declaration statement (to be given as below) by each applicant.
We hereby agree and declare that the information supplied in the application, including the
attachment sheets, is complete and true.
And we further agree that we will notify Securities and Exchange Board of India
immediately any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992, and Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018, and such other guidelines/instructions which may be
announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by the Securities and Exchange Board of India from
time to time.
For and on behalf
of.............................................
(Name of the applicant)
Authorised signatory.................. ..........................
(Name) (Signature)
Date:
Place:
Items 7-14 pertain to the depository, and should be filled in accordingly
7. Name, address of the registered office, address for correspondence, telephone number(s),
fax number(s), telex number(s) and the name of the contact person of the applicant.
8. Date of incorporation of the depository (enclose certificate of incorporation and
memorandum and articles of association)
(a) Objects (main and ancillary) of the depository.
(b) Authorised, issued, subscribed and paid-up capital of the depository.
(c) Proposed net worth of the depository.
(d) Details of proposed shareholding of each applicant.
9. The following details may be given for each director of the depository, and for its principal
officer.
(a) Name, age, nationality.
(b) Details of educational and other qualifications.
(c) Details of experience.
Page 45 of 80
(d) Details of other directorships held.
(e) Details of any litigation connected with the securities market which has an adverse bearing
on the business of the depository, involving the director or principal officer, and details
of any conviction of the director or principal officer for a crime involving moral turpitude
or of any economic offence for which the director or principal officer has been found
guilty.
10. Please indicate the details of staff and organisation structure that is proposed to be set- up
prior to commencement of business.
11. Details of infrastructure such as premises and automatic data processing, storage and back
up systems and procedures, communication systems that are proposed to be set-up prior to
commencement of business.
12. Internal evaluation and monitoring systems that are proposed to be set-up prior to the
commencement of business.
13. Arrangements for indemnification of beneficial owners that are proposed to be put in place,
including details of insurance cover proposed to be taken prior to the commencement of
business.
14. Declaration statement (to be given as below).
We hereby agree and declare that the information supplied in the application including the
attachment sheets, is complete and true.
And we further agree that, we will notify Securities and Exchange Board of India immediately
any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992, and Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018, and such other guidelines/instructions which may be
announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by the Securities and Exchange Board of India from
time to time.
For and on behalf
of............................................................................................................................................
(Name of the applicant)
Authorised signatory.......................... ...............................
(Name) (Signature)
Date: Place:
FORM B
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 7]
Certificate of registration as depository
Page 46 of 80
I. In exercise of the powers conferred by sub-section (1A) of section 12 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992) read with the regulations made
thereunder and with the Depositories Act, 1996 ( 22 of 1996) the Board hereby grants a
certificate of registration to................................as a Depository subject to the conditions
specified in the Act, the Depositories Act and the regulations made thereunder.
II. Registration Number for the Depository is IN/SD///
Date :
Place : Mumbai By Order
Sd/-
For and on behalf of the
Securities and Exchange Board of India
Page 47 of 80
FORM C
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
INSTRUCTIONS
i. This form is meant for use by a depository granted a certificate of registration by the
Securities and Exchange Board of India.
ii. The applicant should complete this form, and submit it, along with all supporting
documents to the Board at its head office at Mumbai.
iii. This application form should be filled in accordance with the regulations.
iv. Application for grant of certificate of commencement of business will be considered
provided it is complete in all respects.
v. All answers must be typed.
vi. Information which needs to be supplied in more detail may be given on separate sheets
which should be attached to the application form.
vii. The application must be signed and all signatures must be original.
viii. Every page of the form and every additional sheet must be initialled by the authorised
signatory of the applicant.
ix. All copies of documents should be attested as true by an authorised notary.
1. Name and registration number of the applicant.
2. Date of grant of certificate of registration to the applicant.
3. Please indicate whether bye-laws have been approved by the Board.
4. Please indicate the details of staff and organisation structure that has been set-up.
5. Please indicate the background and experience of key personnel.
6. Internal evaluation and monitoring systems including details of background and
experience of personnel involved that have been set-up (enclose copies of risk
management and operations manuals).
7. Please provide the following details of the automatic data processing and communications
systems :
(a) details of hardware, software and communications systems, their capability, function
and location;
(b) details of data storage and back up procedures and sites, their capability, function
and location;
(c) details of disaster recovery systems and procedures.
Page 48 of 80
8. Please indicate whether premises and automatic data processing and communications
systems are owned, leased or rented (enclose copies of title lease or rental agreements).
9. Please indicate arrangements that have been put in place in order to indemnify beneficial
owners.
10. Please enclose copy of insurance cover that has been taken.
11. Please enclose a copy of the participation agreement to be entered into with different
categories of participants.
12. Please enclose a copy of the agreement to be entered into with the issuer, or with the issuer
and his registrar.
13. Please enclose a copy of the agreement to be entered into between the participant, as the
depository’s agent, and the beneficial owners.
14. Declaration statement (to be given as below) :
We hereby agree and declare that the information supplied in the application, including the
attachment sheets, is complete and true.
And we further agree that, we will notify the Securities and Exchange Board of India
immediately of any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992, and the Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018, and such other guidelines/instructions which may be
announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by the Securities and Exchange Board of India from
time to time.
For and on behalf
of............................................................................................................................................
(Name of the applicant)
Authorised signatory.......................... ...............................
(Name) (Signature)
Date:
Place:
Page 49 of 80
FORM D
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 16]
In exercise of the powers conferred by section 3 of the Depositories Act, 1996 ( 22 of 1996)
read with the regulations, the Board hereby grants a certificate of commencement of business
to..............................................................as a depository subject to the conditions specified in
the Act, the Depositories Act and the regulations made thereunder.
Date:
Place : Mumbai
By order
Sd/-
For and on behalf of the
Securities and Exchange Board of India
Page 50 of 80
FORM E
Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018
[See regulation 22(2) and 22(3)]
INSTRUCTIONS
i. This form is meant for use by a person who acquires shares of a depository in terms of
sub-regulation (2) or sub-regulation (3) of regulation (22).
ii. The applicant should complete this form, and submit it, along with all supporting
documents, if any to the Board through the depository concerned.
iii. This application form should be filled in accordance with the regulations.
iv. Application seeking approval will be considered provided it is complete in all respects.
v. All answers must be typed.
vi. Information which needs to be supplied in more detail may be given on separate sheets
which should be attached to the application form.
vii. The application must be signed and all signatures must be original.
viii. Every page of the form and every additional sheet must be initialled by the applicant /
authorised signatory of the applicant.
1. Name
2. Address
3. Details of employment/ business, if any
4. SEBI registration number, if any
5. Details of registration with other statutory authorities,
6. Declaration regarding the fulfillment of requirements of regulation 23 of these Regulations.
7. Details of action taken / penalties imposed on him by any statutory authority in India or
abroad.
8. Details of activities that may, in the opinion of the shareholder, lead to his / its
disqualification.
9. Association with depository participants
10. Cases pending before any Court, Tribunal or any other statutory authority in India or
abroad, if any.
11. Previous approvals from the Board as fit and proper, if any.
Page 51 of 80
And I / we further agree that I / we will notify Securities and Exchange Board of India
immediately any change in the information provided in the application.
I / we further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992, and Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018, and such other guidelines/instructions which may be
announced by the Securities and Exchange Board of India from time to time.
Page 52 of 80
FORM F
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[Regulation 32]
INSTRUCTIONS
i. This form is meant for use by an applicant for grant of registration as participant.
ii. The form should be filled in by the applicant and submitted to the depository in which it
is acting as participant, who shall forward it, along with all supporting documents to the
Board at its head office at Mumbai.
iii. This application form should be filled in accordance with the regulations.
iv. Application for grant of registration, as the case may be, will be considered provided it is
complete in all respects.
v. All answers must be typed.
vi. Information which needs to be supplied in more detail may be given on separate sheets
which should be attached to the application form.
vii. The application must be signed and all signatures must be original.
viii. The application must be accompanied by an application fee as specified in the Second
Schedule to these regulations.
ix. Every page of the form and every additional sheet must be initialed by the authorised
signatory of the applicant.
x. All copies of documents should be attested as true by an authorised notary.
1. Name, address of the registered office, address for correspondence, telephone number(s),
fax number(s), telex number(s) of the applicant and the name of the contact person.
2. Please indicate to which of the categories under sub-regulation (a) of regulation 35, the
applicant belongs.
3. (a) Date and place of incorporation or establishment and date of commencement of
business (enclose certificate of incorporation, memorandum and articles of association
or statutory provisions, if any).
(b) Details of the activities carried on by the applicant, in India or overseas.
(c) Details of affiliates and subsidiaries of the applicant operating in India, and activities
carried on by them.
(d) Details of registration with the Securities and Exchange Board of India, the Reserve
Bank of India or with any regulatory authority overseas of the applicant, and of its
affiliates and subsidiaries operating in India.
Page 53 of 80
(e) Date of commencement of business in India and overseas (please enclose copies of
the Reserve Bank of India’s permission, and if applicable copies of approvals from
the Central Government to carry on activities mentioned above).
(f) Type and number of beneficial owners on whose behalf the applicant proposes to act
as participant (Financial Institutions, Mutual Funds, Foreign Portfolio Investors,
Portfolio Managers, Non-Banking Finance Companies, Stock Brokers, Corporates,
Individuals, or for own account).
4. Please give the name and SEBI registration number of the depository in which the
applicant is to act as participant.
5. Please state whether the applicant, his partner, director or principal officer is involved in
any litigation connected with the securities market which has an adverse bearing on the
business of the applicant; or has at any time been convicted for any moral turpitude or at
any time has been found guilty of any economic offence.
6. Please also state whether there has been any instance of violation or non-adherence to the
securities laws, code of ethics/conduct, code of business rules, for which the applicant or
its parent or holding company or affiliate may have been subject to economic, or criminal
liability, or suspended from carrying out its operations, or the registration revoked
temporarily.
7. Please indicate the net worth and paid-up capital in rupees crore as per the latest audited
financial statements of the applicant.
8. Please indicate services that the applicant is already providing to beneficial owners on
whose behalf the applicant proposes to act as participant, and services proposed to be
provided to beneficial owners.
9. Please provide the following details regarding staff involved in activities as participant:
(i) organisation structure;
(ii) experience and background of key personnel.
10. Please provide the following details regarding safekeeping and security systems and
procedures:
(i) risk control and operations manuals;
(ii) give details of independent internal control mechanisms for monitoring evaluation
and review of accounting, and reporting systems and procedures.
11. Please provide the following details regarding automatic data processing systems and
record keeping :
(i) details of hardware, software and communications systems, their capability, function
and location;
(ii) details of data storage and back up procedures and sites, their capability, function
and location;
(iii) details of disaster recovery systems and procedures.
12. Details of insurance cover to be taken up.
13. Please indicate the applicant’s shareholding for each depository in which it has such
shareholding and whether any shareholding is proposed to be acquired in the depository
through which this application is being made.
Page 54 of 80
14. Please enclose a copy of an undertaking from the depository in which the applicant is to
act as participant that:
(a) the applicant is eligible to act as participant in the depository through which this
application is being submitted to the Board, and meets with the eligibility criteria for
participants specified in these regulations and in the depository’s bye-laws;
(b) the applicant has adequate automatic data processing systems, adequate and
competent staff, risk management systems, procedures and manuals, disaster
recovery procedures, secure data storage and off site back up facilities, adequate
communications links and insurance; to enable the applicant to fulfil its obligations
as participants to the satisfaction of the depository; and
(c) the agreement to be entered into between the participant and beneficial owners has
been submitted to the depository is in accordance with the depository’s bye-laws.
15. Declaration statement (to be given as below).
We hereby agree and declare that the information supplied in the application, including the
attachment sheets, is complete and true.
And we further agree that, we will notify Securities and Exchange Board of India immediately
any change in the information provided in the application.
We further agree that we shall comply with, and be bound by the Securities and Exchange
Board of India Act, 1992 and the Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018, and such other guidelines/instructions which may be
announced by the Securities and Exchange Board of India from time to time.
We further agree that as a condition of registration, we shall abide by such operational
instructions/directives as may be issued by the Securities and Exchange Board of India from
time to time.
For and on behalf
of............................................................................................................................................
(Name of the applicant)
Authorised signatory.......................... ...............................
(Name) (Signature)
Date:
Place:
FORM G
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[Regulation 36]
I. In exercise of the powers conferred by sub-section (1A) of section 12 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992) read with the regulations made
Page 55 of 80
thereunder and with the Depositories Act, 1996 ( 22 of 1996) the Board hereby grants a
certificate of registration to.................................................... ...........................................
as a participant subject to the conditions specified in the Act, the Depositories Act and the
regulations made thereunder.
II. Registration Number for the participant is IN/DP/ / /
III. This certificate of registration shall be valid, unless it is suspended or cancelled by the
Board.
Date:
Place: Mumbai
By order
Sd/-
For and on behalf of the
Securities and Exchange Board of India
Page 56 of 80
SECOND SCHEDULE
[see regulations 3, 7, 8, 9, 32, 36]
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
PART A
APPLICATION FEES, REGISTRATION FEES, ANNUAL CHARGE AND ANNUAL
FEES
Application fees payable by applicant (Rs.) 5,00,000
Application fees payable by participant (Rs.) 15,000
Registration fees payable by depository (Rs.) 1,00,00,000
Registration fees payable by participant (Rs.) 2,00,000
Annual fees payable by depository (Rs.) 50,00,000
Annual fees payable by participant (Rs.) 1,000
Annual charges payable by depository 2% of annual custody charges collected by
depositories from issuers
PART B
MANNER OF PAYMENT OF APPLICATION, REGISTRATION, ANNUAL
CHARGE AND ANNUAL FEES
Fees to be paid by Manner of payment
68
[Applicant or depository By way of direct credit into the bank account through
NEFT/RTGS/IMPS or online payment using the SEBI Payment
Gateway or any other mode as may be specified by the Board from
time to time.]
69[Participant Fees to be paid to the depository in which the payer is a Participant.
The Depository shall forward the fees collected from participants
to the Board, by way of direct credit in the bank account through
online payment using SEBI payment gateway.]
68
Substituted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) (Regulations) 2023 w.e.f. 01-
04-2023. Prior to substitution the clause read as
“Applicant or depository By way of direct credit in the bank account through NEFT/RTGS/IMPS or any
other mode allowed by RBI or demand draft or bankers cheque payable to the
“Securities and Exchange Board of India” at Mumbai.”
69
Substituted by the SEBI (Payment of Fees and Mode of Payment) (Amendment) (Regulations) 2021 w.e.f. 05-
05-2021. Prior to substitution the clause read as:
“Participant Fees to be paid to the depository in which the payer is a Participant. The
Depository shall forward the fees collected from participants to the Board, by way
of direct credit in the bank account through NEFT/RTGS/IMPS or any other mode
allowed by RBI or by a demand draft or bankers cheque payable to the “Securities
and Exchange Board of India” at Mumbai.”
Page 57 of 80
Page 58 of 80
PART C
1. All directors while seeking approval shall submit to the depository the following
details
a. Name
b. Address
c. Educational qualification
d. Details of employment/ Occupation, past and present
e. Details of other directorships
f. DIN No.
g. Declaration regarding the fulfillment of requirements specified under regulation 23 of
these Regulations.
h. Declaration confirming compliance of Regulation 24(10) read with Regulation 2(1)(c)
of these Regulations, in respect of non-association with trading member or clearing
member.
i. Details of regulatory action taken by any statutory authority in India.
j. Details of activities that may in the opinion of the director, lead to his disqualification.
k. Association, if any, with trading members/ depository participants.
l. Disclosure of the names of his dependents associated with the securities market as
member, depository participant, sub-broker, authorized person or holding any
registration granted by the Board.
m. An undertaking that he shall abide by the code of conduct and code of
ethics prescribed in Part B and Part C of Third Schedule to these Regulations.
n. In the case of public interest directors, consent letters for acting as a public interest
director.
o. Criminal cases completed/ pending before any authority in India or abroad, if any.
71
[(2)The depository, while recommending the name(s) of director, shall forward the above
details to the Board, along with the minutes of the governing board meeting where the
70
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
71
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, sub-clause (2) read as under:
Page 59 of 80
name(s) was approved, copy of the shareholder's resolution (wherever applicable), and
a confirmation by the depository that they are fit and proper persons in terms of their fit and
proper criteria, are not associated with any depository participant, trading member or
clearing member in terms of regulation 24(9) read with regulation 2 (1) (c) of these
regulations and compliance with the requirements specified in regulation 24 (14) ]
“(2) The depository, while recommending the names of director, shall forward the above details to the Board,
along with the minutes of the meeting of the governing board where the name was approved, copy of the
shareholder's resolution (wherever applicable), a confirmation by the depository that the director is a fit and proper
person in terms of the criteria specified in these regulations and are not associated with any depository participant,
trading member or clearing member in terms of regulation 24(10) read with regulation 2(1)(c) of these
Regulations.”
72
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
73
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
74
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
75
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, sub-clause (1) read as under:
“ (1) The names of public interest directors shall be forwarded to the Board after the approval of the Board of the
depository. The shareholders approval shall not be necessary. A minimum of two names shall be submitted to the
Board for each vacancy of public interest directors.”
76
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution, item (a) read as under:
Page 60 of 80
77
[***]
(c) Persons currently holding positions of trust and responsibility in reputed organizations
or person who have retired from such positions.
(d) Persons who are likely to have interested positions in commercial contracts and financial
affairs of depository may be excluded. Also, persons who are regular traders/speculators in
the market or are director in the board of the applicant of the depository shall be excluded.
(3) Public interest directors shall peruse the relevant laws, code of conduct, code of ethics, etc
and submit an undertaking to the depository that they are aware of their role, responsibilities
and obligations. 78[***]
79
[(4) In case of reappointment of the public interest director, the depository shall apply to the
Board four months before the expiry of the term. In addition to the other requirements specified
herein, the application for reappointment of the public interest director shall be accompanied
with, their attendance details on meetings of various mandatory committees and on the
governing board of the depository, performance review and the reasons for extension of
term.”
(5) The existing public interest director, may continue holding the post for a maximum
period of three months from the date of expiry of their term, or till a new public interest
director is appointed, whichever is earlier, only if the governing board does not meet the
mandatory regulatory requirements on its composition.]
80[(IV)]81[Non-independent directors]:-
(1) The names of person(s) to be appointed as 82[non-independent directors] shall first be
approved by the governing board of the depository followed by shareholders’ approval
before submitting the same to the Board for approval.
“(a)Qualification in the area of law, finance, accounting, economics, management, administration or any other
area relevant to the financial markets.”
77
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, item (b) read as under:
“(b) At least one person may be inducted having experience and background in finance/accounts who may
preferably be inducted in the audit committee.”
78
Omitted the words “The depository may conduct familiarization programmes for newly appointed Public
Interest Directors and may also conduct annual training for every public interest director.” by the Securities and
Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
79
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution sub-clause (4) and (5) read as under:
“(4) In case of extension of the term of the public interest director or appointment of a new public interest director,
the depository shall apply to the Board two months before the expiry of the term. In addition to the other
requirements prescribed herein, the application for extension of term of the public interest director shall be
accompanied with, his attendance details on meetings of various committees and on the governing board of the
stock exchange / clearing corporation, performance review and the reasons for extension of term.
(5) The existing public interest director shall continue holding the post, till a new public interest director is
appointed in his place.”
80
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
81
Substituted for the words “Share Holder Directors” by the Securities and Exchange Board of India (Depositories
and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023.
82
Ibid.
Page 61 of 80
83
[(2) The manner of election, appointment, tenure, resignation, vacation, etc. of a non-
independent director shall be governed by the provisions applicable to shareholder
directors under the Companies Act, 2013, save as otherwise specifically provided under
these Regulations or circulars issued thereunder.]
85
[(VI.) The depository shall provide at least seven days of training to all directors each year.]
PART D
Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018
[See
regulation
28 (3)]
83
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution sub-clause (2) read as under:
“(2) The manner of election, appointment, tenure, resignation, vacation, etc., of a shareholder director shall be
governed by the Companies Act, 2013, save as otherwise specifically provided under these Regulations.”
84
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2019 w.e.f. 04-06-2019.
85
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
86
Substituted for the words “not exceed one-third of total pay” by the Securities and Exchange Board of India
(Depositories and Participants) (Amendment) Regulations, 2023, w.e.f. 28-08-2023
Page 62 of 80
87
b) Fifty percent of the variable pay shall be paid on a deferred basis after [a
minimum period of] three years.
c) ESOPs and other equity linked instruments in the depository shall not be
offered or provided as part of the compensation for the key management
personnel.
d) The compensation policy shall have malus and clawback arrangements.
(2) Apart from the above, the compensation policy of the depository shall take into
consideration the following:
a) financial condition / health of the depository
b) average levels of compensation payable to employees in similar ranks,
c) shall not contain any provisions regarding incentives to take excessive risks
over the short term,
d) revenues, net profit of the depository,
e) comparable to the industry standards,
f) role and responsibilities of the key management personnel,
g) periodic review
(3) Further, at the time of seeking approval of the Board for the appointment of the
managing director, the depository shall seek approval for the compensation of the
managing director from the Board.
PART E
Securities and Exchange Board of India (Depositories and
Participants) Regulations, 2018
[See regulation 22(10)]
87
Inserted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023.
Page 63 of 80
THIRD SCHEDULE
Part-A
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 36]
Page 64 of 80
clients or when it is required to disclose the information under the requirements of any Act,
Rules or Regulations.
10. A participant shall co-operate with the Board as and when required.
11. A participant shall maintain the required level of knowledge and competency and abide by
the provisions of the Act, Rules, Regulations and circulars and directions issued by the Board.
The participant shall also comply with the award of the Ombudsman passed under the
Securities and Exchange Board of India (Ombudsman) Regulations, 2003.
12. A participant shall not make any untrue statement or suppress any material fact in any
documents, reports, papers or information furnished to the Board.
13. A participant shall not neglect or fail or refuse to submit to the Board or other agencies with
which it is registered, such books, documents, correspondence, and papers or any part thereof
as may be demanded/requested from time to time.
14. A participant shall ensure that the Board is promptly informed about any action, legal
proceedings, etc., initiated against it in respect of material breach or non-compliance by it, of
any law, Rules, regulations, directions of the Board or of any other regulatory body.
15. A participant shall maintain proper inward system for all types of mail received in all forms.
16. A participant shall follow the maker—Checker concept in all of its activities to ensure the
accuracy of the data and as a mechanism to check unauthorised transaction.
17. A participant shall take adequate and necessary steps to ensure that continuity in data and
record keeping is maintained and that the data or records are not lost or destroyed. It shall also
ensure that for electronic records and data, up-to-date back up is always available with it.
18. A participant shall provide adequate freedom and powers to its compliance officer for the
effective discharge of his duties.
19. A participant shall ensure that it has satisfactory internal control procedures in place as well
as adequate financial and operational capabilities which can be reasonably expected to take
care of any losses arising due to theft, fraud and other dishonest acts, professional misconduct
or omissions.
20. A participant shall be responsible for the acts or omissions of its employees and agents in
respect of the conduct of its business.
21. A participant shall ensure that the senior management, particularly decision makers have
access to all relevant information about the business on a timely basis.
22. A participant shall ensure that good corporate policies and corporate governance are in
place.
Page 65 of 80
88[PART-B
88
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution PART-B read as under:
Part-B
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 27]
CODE OF CONDUCT FOR DIRECTORS
i. Meetings and minutes
Every director of the depository shall:
a) not participate in discussions on any subject matter in which any conflict of interest exists or arises, whether
pecuniary or otherwise, and in such cases the same shall be disclosed and recorded in the minutes of the
meeting;
b) not encourage the circulation of agenda papers during the meeting, unless circumstances so require;
c) offer their comments on the draft minutes and ensure that the same are incorporated in the final minutes;
d) insist on the minutes of the previous meeting being placed for approval in subsequent meeting;
e) endeavour to have the date of next meeting fixed at each governing board meeting in consultation with other
members of the governing board;
f) endeavour that in case all the items of the agenda of a meeting were not covered for want of time, the next
meeting is held within fifteen days for considering the remaining items.
Page 66 of 80
[SEE REGULATION 27]
Code of Conduct for governing board, directors, committee members and key
management personnel
I. Governing Board
Page 67 of 80
iv. zero tolerance for areas such as cyber security, system stability,
surveillance, fair access, fraud or corruption, compliance, etc.
g) make key stakeholders (executive and non-executive) aware of the use and
value of risk appetite across the organization (including implications of
breaches) and review and approve risk appetite metrics and thresholds
periodically.
h) ensure adequate independence of key functions such as regulatory and
control functions (risk management, compliance and audit functions) such
that;
Page 68 of 80
the depository and any other person as determined by the public interest
directors and non-independent directors to discuss important issues
concerning the depository, on a periodic basis as specified by the Board.
o) periodically review the frequency of meetings and agenda items of the
governing board to ensure that the number of meetings is rationalized and
all important issues are discussed.
p) ensure that the agenda papers are approved by the chairman of the
governing board.
q) ensure that members of the governing board can place agenda item during
their meeting.
r) be responsible for monitoring compliance with the code of conduct by the
members of the governing board of the depository.
s) uphold a strong culture in the depository and promote the target culture
from the top through behavior, actions and effective communication.
t) communicate the guiding principles for institution’s target regulatory,
compliance, risk and conduct culture.
u) endeavor that the depository put in place key elements related to culture
such as:
i. adequate training programs to help employees better understand
expectations of behavior (for example, trainings on dilemmas);
ii. mechanisms to measure and track indicators related to culture at regular
intervals;
iii. accountability mechanisms; and
iv. performance management mechanisms which take into account
adherence to culture, conduct and behavior related dimensions.
II. Code of Conduct for Directors, Committee Members and key management
personnel
1. General Responsibility.
Every director, committee members and key management personnel of the depository
shall—
Page 69 of 80
(c) unless otherwise required by law, maintain confidentiality and not divulge or
disclose any information obtained in the discharge of their duty and no such
information is used for personal gains;
(d) maintain the highest standards of personal integrity, truthfulness, honesty and
fortitude in discharge of their duties in order to inspire public confidence and
not engage in acts discreditable to their responsibilities;
(e) perform their duties in an independent and objective manner and avoid
activities that may impair, or may appear to impair, their independence or
objectivity or official duties;
(f) perform their duties with a positive attitude and constructively support open
communication, creativity, dedication, and compassion;
(g) not engage in any act involving moral turpitude, dishonesty, fraud, deceit, or
misrepresentation or any other act prejudicial to the administration of the
depository;
(h) promote greater awareness and understanding of ethical responsibilities;
(i) in the conduct of their business, observe high standards of commercial
honour and; just and equitable principles of trade;
(j) in their conduct in business life be exemplary which may set a standard for
others;
(k) not use their position to give or get favours to or from the executive or
administrative staff of the depository, technology or service providers and
vendors or suppliers of the depository;
(l) not commit any act which will put the reputation of the depository in
jeopardy;
(m) comply with the provisions of all applicable laws to the securities market;
(n) directors and key management personnel shall at all point of time comply
with all the internal policies of the depository including their code of conduct.
If there is a conflict between the code of conduct policy of the depository
with those provided by the Board, then the policy issued by the Board shall
prevail.
2. Regulatory Compliances.
Every director, committee member and key management personnel of the depository
shall—
(a) ensure that the depository abides by all the applicable provisions of the Act,
the Depositories Act, 1996, rules and regulations framed thereunder and the
circulars, directions or any other instructions issued by the Board from time
to time;
(b) ensure compliance at all levels so that the regulatory system does not suffer
any breaches;
(c) ensure that the depository takes steps commensurate to honour the time limit
stipulated by Board for corrective action.
Page 70 of 80
3. Disclosures of Beneficial Interest.
All directors, committee members and key management personnel shall disclose to
the governing board of depository, upon assuming office and during their tenure in
office, whenever the following arises:—
(a) any fiduciary relationship of self and family members and directorship/
partnership of self and family members in any trading member or clearing
member or depository participant or registrar and transfer agent;
(b) shareholding, in cases where the shareholding of the director/ key
management personnel, directly or through his family exceeds 5 percent in
any listed company or in other entities related to the securities markets;
(c) any other business interests.
4. Access to Information.
(a) There shall be prescribed channels through which information shall move
and further there shall be audit trail of the same. Any retrieval of confidential
documents or information shall be properly recorded.
(b) All such information, especially which is non-public and price sensitive, shall
be kept confidential and not be used for any personal consideration or gain.
(c) Any information relating to the business or operations of the depository,
which may come to the knowledge of directors or committee members or key
management personnel during performance of their duties shall be held in
strict confidence, shall not be divulged to any third party and shall not be
used in any manner except for the performance of their duties.
(d) Directors shall call for information only as part of specific committees or as
may be authorised by the governing board of depository.
5. Misuse of Position.
Directors or committee members or key management personnel shall not use their
position to obtain business or any pecuniary benefit in the organization for
themselves or family members.
(a) not participate in discussions on any subject matter in which any conflict of
interest exists or arises, whether pecuniary or otherwise, and in such cases
the same shall be disclosed and recorded in the minutes of the meeting;
(b) not encourage the circulation of agenda papers during the meeting, unless
circumstances so require;
Page 71 of 80
(c) ensure that minutes are recorded to capture all points of opinion
comprehensively;
(d) offer their comments on the draft minutes and ensure that the same are
incorporated in the final minutes;
(e) insist on the minutes of the previous meeting being placed for approval in
subsequent meeting;
(f) endeavor to have the date of next meeting fixed at each governing board
meeting and committee meetings respectively in consultation with other
respective members of the governing board and committees;
(g) ensure that all important agendas placed before the governing board of
depository and committees are deliberated in a timely manner;
(h) not support any decision in the meeting of the governing board of depository
and the committees respectively which may adversely affect the interest of
investors and shall report forthwith any such decision to the Board.
2. Role of the directors and committee members in the day to day functioning of
the depository.
(a) The directors and committee members shall not interfere in the day to day
functioning of the depositories and shall limit their role to decision making
on policy issues and to issues as the governing board of depository may
decide.
(b) The directors and committee members shall abstain from influencing the
employees of the depositories in conducting their day to day activities.
(c) The directors and committee members shall not be directly involved in the
function of appointment and promotion of employees unless specifically so
decided by the governing board of depository.
4. Strategic Planning.
Every director and committee member of the depository shall—
(a) participate in the formulation and execution of strategies in the best interest
of the depository and contribute towards pro-active decision making at the
governing board level;
(b) give benefit of their experience and expertise to the depository and provide
assistance in strategic planning and execution of decisions;
Page 72 of 80
(c) place priority for redressing investor grievances and encouraging fair trade
practice so that the depository becomes an engine for the growth of the
securities market.
Page 73 of 80
(f) Public interest directors shall put in place an evaluation mechanism to assess
the performance of managing directors on a continuing basis in line with
evaluation guidelines for public interest directors.
(g) Public interest directors shall ensure that appointments of managing director
be held within specified timelines. Identification of key management
personnel be closely scrutinized as per the laid down procedure and
exceptions should be brought to the notice of the Board.
(h) Public interest directors should take proactive part in deliberations of
different committees and steer their functioning.
(i) Adequacy of resource allocations (both financial & human) towards
regulatory compliances to be ensured.
(a) Managing director of the depository shall meet employees without the
presence of other key management personnel (the heads of departments) to
discuss important issues pertaining to depository
(b) Key management personnel of the depository shall disclose on a periodic
basis as determined by the depository (which could be monthly), all their
dealings in securities, directly or indirectly, to the governing board or
regulatory oversight committee or Compliance Officer of depository.
(c) All transactions must be of an investment nature and not speculative in
nature. Towards this end, all securities purchased must be held for a
minimum period of sixty days before they are sold. In specific/ exceptional
circumstances, however, sale can be effected anytime by obtaining pre-
clearance from the compliance officer to waive this condition after recording
in writing his satisfaction in this regard.
Explanation. - “securities” for the purpose of this code shall not include mutual fund
units.]
Page 74 of 80
89[***]
89
Omitted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its omission, PART-C shall be read as under:
“Part-C
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 27]
The ‘Code of Ethics’ for directors and key management personnel of the depository, is aimed at improving the
professional and ethical standards in the functioning of depository thereby creating better investor confidence in
the integrity of the securities market.
Page 75 of 80
c) All transactions must be of an investment nature and not speculative in nature. Towards this end, all
securities purchased must be held for a minimum period of 60 days before they are sold. However, in
specific/exceptional circumstances, sale can be effected anytime by obtaining pre-clearance from the
Compliance Officer to waive this condition after recording in writing his satisfaction in this regard.
Explanation: ‘securities’ for the purpose of this Code shall not include units of mutual fund.
viii. Role of the Chairman and directors in the day to day functioning of the depository
a) The Chairman and directors shall not interfere in the day to day functioning of the depository and shall
limit their role to decision making on policy issues and to issues as the governing board may decide.
b) The Chairman and directors shall abstain from influencing the employees of the depository in conducting
their day to day activities.
c) The Chairman and directors shall not be directly involved in the function of appointment and promotion
of employees unless specifically so decided by the governing board.
x. Misuse of position
Page 76 of 80
90[ PART-D
Directors/committee members shall not use their position to obtain business or any pecuniary benefit in the
organization for themselves or family members.
While the objective of this Code is to enhance the level of market integrity and investor confidence, it is
emphasized that a written Code of ethics may not completely guarantee adherence to high ethical standards. This
can be accomplished only if directors and key management personnel of the depository commit themselves to the
task of enhancing the fairness and integrity of the system in letter and spirit.”
90
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution PART-D read as under:
“Part-D
1. A depository shall always abide by the provisions of the Act, Depositories Act, 1996, Rules, Regulations,
circulars, guidelines and any other directions issued by the Board.
2. A depository shall take appropriate measures towards investor protection and education of investors.
3. A depository shall treat all its applicants/participants in a fair and transparent manner.
4. A depository shall promptly inform the Board of violations of the provisions of the Act, Depositories Act, the
rules, the regulations, circulars, guidelines or any other directions by any of its participants, issuer or issuer’s
agent.
5. A depository shall take a proactive and responsible attitude towards safeguarding the interests of investors,
integrity of the depository system and the securities market.
6. A depository shall make endeavors for introduction of best business practices amongst itself and its participants.
7. A depository shall act in utmost good faith and shall avoid conflict of interest in the conduct of its functions.
8. A depository shall not indulge in unfair competition, which is likely to harm the interests of any other
depository, participants or investors or is likely to place them in a disadvantageous position while competing for
or executing any assignment.
9. A depository shall be responsible for the acts or omissions of its employees in respect of the conduct of its
business.
10. A depository shall monitor the compliance of the rules and regulations by the participants and shall further
ensure that their conduct is in a manner that will safeguard the interest of investors and the securities market.”
Page 77 of 80
Code of Conduct for Depositories
A Depository shall:
(a) always abide by the provisions of the Act, Depositories Act, 1996, any
Rules or Regulations framed thereunder, circulars, guidelines and any
other directions issued by the Board from time to time.
(b) adopt appropriate due diligence measures.
(c) take effective measures to ensure implementation of proper risk
management framework and good governance practices.
(d) take appropriate measures towards investor protection and education of
investors.
(e) treat all its applicants/members in a fair and transparent manner.
(f) promptly inform the Board of violations of the provisions of the Act, the
Depositories Act, 1996, rules, regulations, circulars, guidelines or any
other directions by any of its issuer or issuer’s agent.
(g) take a proactive and responsible attitude towards safeguarding the
interests of investors, integrity of depository’s systems and the securities
market.
(h) endeavor for introduction of best business practices amongst itself and its
members.
(i) act in utmost good faith and shall avoid conflict of interest in the conduct
of its functions.
(j) not indulge in unfair competition, which is likely to harm the interests of
any other Depository, their participants or investors or is likely to place
them in a disadvantageous position while competing for or executing any
assignment.
(k) segregate roles and responsibilities of key management personnel within
the depository including
a. Clearly mapping legal and regulatory duties to the concerned
position
b. Defining delegation of powers to each position
c. Assigning regulatory, risk management and compliance aspects
to business and support teams
(l) be responsible for the acts or omissions of its employees in respect of the
conduct of its business.
(m) monitor the compliance of the rules and regulations by the participants
and shall further ensure that their conduct is in a manner that will
safeguard the interest of investors and the securities market.]
Page 78 of 80
91[
FOURTH SCHEDULE
Securities and Exchange Board of India (Depositories and Participants)
Regulations, 2018
See regulation 2(k)(iii)
Core functions of the depository
1. For depositories the core and critical functions shall include but not limited to:
91
Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Amendment)
Regulations, 2023, w.e.f. 28-08-2023. Prior to its substitution Fourth Schedule read as under:
“FOURTH SCHEDULE
Securities and Exchange Board of India (Depositories
and Participants) Regulations, 2018
[See regulation 29]
Page 79 of 80
ii. Surveillance and investigation;
iii. Participant registration;
iv. Issuer or securities admission;
v. Compliance;
vi. Inspection;
vii. Enforcement;
viii. Arbitration and grievance redressal mechanism;
ix. Investor protection and services.
Sd/-
AJAY TYAGI
CHAIRMAN
SECURITIES AND EXCHANGE BOARD OF INDIA
Page 80 of 80