Corrigendum1

ForworkbookversionDecember2011

WorkBookforNISMSeriesVI:DepositoryOperationsCertification
Examination
August6,2013

Kindly note the following updates. Candidates attempting the examinations from September
24, 2013 will need to answer questions in the examination on the basis of this update, read
along with the prescribed Workbook. Kindly note that three new chapters on Qualified
Institutional Investor, Rajiv Gandhi Equity Saving Scheme, 2012 (RGESS) and Basic Services
DematAccounthavebeenincludedinthisversionoftheworkbook.

Chapter3:DepositoryanditsBusinessPartners
Section3.1.5:ValidityandRenewalofRegistrationCertificate
Thefirstparashouldreadas:Acertificateofregistrationisvalidforaperiodoffiveyearsfrom
the date of issue. The Securities and Exchange Board of India (Depositories and Participants)
Regulations, 1996 were amended as per notification dated July 5, 2011. Accordingly,
Participants will have to apply for permanent registration instead of renewal of registration.
Suchapplicationforpermanentregistrationmustbemadethreemonthsbeforetheexpiryof
validity of registration certificate, or even before. The application for permanent registration
shouldbemadethroughthedepository.Thefeesspecifiedforissueofcertificateofregistration
should accompany the application. It is dealt with in the same manner as if it were a fresh
applicationforgrantofcertificateofregistration.SEBImayrejecttheapplicationforpermanent
registrationofcertificateaftercitingthereasonsforrefusalinwriting.
The sentence Application for renewal before expiry date of the registration certificate
standsdeleted.
The word renewal with regards to registration application renewal inthe subsequent three
parasshouldbesubstitutedwithpermanentregistration.
A new para added at the end of section 3.1.5 which should read as The DP, to keep the
registrationinforce,shallpayregistrationfeeasspecifiedinPartAoftheSecondScheduleof

theSEBI(DepositoriesandParticipants)Regulations,foreveryfiveyearsfromthesixthyearof
thedateofgrantofcertificateofpermanentregistration.Thespecifiedfeeshallbepaidthree
monthspriortotheexpiryoftheblockforwhichthefeehasbeenpaid.
Section3.1.7:RightsandObligations
ParaonTransactionStatementsshouldreadas:TheDPshouldprovidetransactionstatement
to the beneficial owner as laid down in the agreement with the BO. The DP shall furnish a
statementofaccountsincludingtransactionstatementandholdingsstatementtoeveryClient,
who has opened an account with it, giving the details of the securitywise transactions and
balances,intheaccountsoftheClients.SuchastatementshallbefurnishedtotheClientsat
monthly intervals and to the Clients opting for Basic Services Demat Account at quarterly
intervalsunlesstheClientandtheDPhaveagreedforprovisionofsuchstatementsatshorter
intervals. However, if there is no transaction in the account, then the DP shall provide such
statementtotheClientonanannualbasis.Providedhoweverthatinrespectofaccountswith
notransactionandnilbalance,onesuchstatementshallbesenttotheClientinphysicalform
on an annual basis. The transaction statement should be dispatched directly to the client's
address as mentioned in the Depository system of the DP and not through any
franchisee/collection centre. The statement could be provided electronically, provided an
agreementintheprescribedformathasbeenexecutedwiththeclientsforthisandadequate
security measures have been taken. SEBI permits the DP's to provide transaction statements
and other documents to the BOs under Digital Signature, as governed under Information
Technology Act, 2000, subject to entering into legally enforceable arrangement with the BOs
forthesaidpurpose.Providingoftransactionstatementsandotherdocumentsintheaforesaid
manner would be deemed to be in compliance of the provisions of Regulation 43 of SEBI
(Depositories&Participants)Regulations,1996.
The last line of the para on Monitoring, Reviewing and Evaluating Internal Systems and
Controls should read as As per the ByeLaws, a DP has to get an internal audit done of the
depositoryoperationsonahalfyearlybasisbyapracticingcharteredaccountantoracompany
secretaryoracostaccountant.
ThebulletedpointsunderReturnsstandsdeleted.TheparaonReturnstohavetwotablesas
givenbelow:
Sr.No
1
2
3
4

Particulars
InvestorGrievanceReport(Monthly)

NSDLDeadline
By 10th of the following
month.
ComplianceCertificate(JulyDecember)
January31steveryyear
ChargeStructure
April30theveryyear
Internal/ConcurrentAuditReport(October May15theveryyear

5
6
7

March)
ComplianceCertificate(JanuaryJune)
NetworthCertificateandAuditedFinancial
Statements
Internal/ConcurrentAuditReport(April
September)

July31steveryyear
September 30th every
year.
November 15th every
year

Sr.No
1
2
3
4
5
6

7
8
9

10

Particulars
InvestorGrievanceReport(Monthly)

CDSLDeadline
By 10th of the following
month
ChargeStructure

Internal/ConcurrentAuditReport(October May15everyyear
March)
NetworthCertificateandAuditedFinancial
September 30th every
Statements
year
Internal/ConcurrentAuditReport(April
November 15th every
September)
year
Compliance report for Internal audit/ Within30days
Inspection

ChangeinComplianceofficerdetails
Immediately

Changeinofficeaddress
Immediately
Proposed change in constitution / status of Immediately
DP

ProposedchangeincontrolofDP
Immediately

Chapter4:FunctionsofDepositoryParticipantAccountOpening
Section4.1:TypesofAccount
LastsentenceinthelastparaunderSection4.1shouldreadasThesecuritiesinthisaccount
willnotbeeligibleforanycorporateactionbenefitdeclared.
Section4.2:BeneficialOwnerAccount
ThefollowingcontentaddedattheendofSection4.2.
GeneralguidelinesforAccountOpening

a) Self attested copy of PAN card is mandatory for all Clients including Promoters /
Partners / Karta / Trustees / Whole Time Directors and persons authorised to deal in
securitiesonbehalfofcompany/firm/others.
b) Copies of all documents submitted by the applicant should be selfattested and
accompaniedbyoriginalsforverification.Incasetheoriginalofanydocumentsarenot
produced for verification, then the copies should be properly attested by the entities
authorisedforattestingthedocumentsasperthebelowgivenlist.
c) Ifanyproofofidentityoraddressisinaforeignlanguage,thentranslationintoEnglishis
required
d) Name & address of the applicant mentioned on the KYC form, should match with the
documentaryproofsubmitted.
e) IncaseofPAN,ParticipantsmayverifythePANoftheirClientsonlineattheIncomeTax
website without insisting on the original PAN card, provided that the Client has
presentedadocumentforProofofIdentityotherthanthePANcard.
f) Ifcorrespondence&permanentaddressaredifferent,thenproofsforbothhavetobe
submitted.
g) Soleproprietormustmaketheapplicationinhisindividualname&capacity.
h) For nonresidents and foreign nationals, (allowed to trade subject to RBI and FEMA
guidelines), copy of passport/PIO Card/OCI Card and overseas address proof is
mandatory.
i) Forforeignentities,CINisoptional;andintheabsenceofDINno.forthedirectors,their
passportcopyshouldbegiven.
j) In case of Merchant Navy NRIs, Mariners declaration or certified copy of CDC
(ContinuousDischargeCertificate)istobesubmitted.
k) For opening an account with Depository participant or Mutual Fund, for a minor,
photocopy of the School Leaving Certificate/Mark sheet issued by Higher Secondary
Board/PassportofMinor/BirthCertificatemustbeprovided.
l) Politically Exposed Persons (PEP) are defined as individuals who are or have been
entrustedwithprominentpublicfunctionsinaforeigncountry,e.g.,HeadsofStatesor
ofGovernments,seniorpoliticians,seniorGovernment/judicial/militaryofficers,senior
executivesofstateownedcorporations,importantpoliticalpartyofficials,etc.
Listofpeopleauthorizedtoattestthedocuments:
a) Notary Public, Gazetted Officer, Manager of a Scheduled Commercial/ Cooperative
BankorMultinationalForeignBanks(Name,Designation&Sealshouldbeaffixedonthe
copy).
b) In case of NRIs, authorized officials of overseas branches of Scheduled Commercial
Banks registered in India, Notary Public, Court Magistrate, Judge, Indian Embassy
/ConsulateGeneralinthecountrywheretheclientresidesarepermittedtoattestthe
documents.


Withaviewtobringaboutuniformityinsecuritiesmarkets,commonKYCformandsupporting
documentsarerequiredtobeusedbySEBIregisteredintermediaries.TheKYCformasgivenin
Annexure1shallbefilledbyaninvestorattheaccountopeningstagewhiledealingwithanyof
theaboveintermediaries.Additionaldetailsspecifictotheareaofactivityoftheintermediary
shallbeobtainedfromtheinvestorsinPartIIoftheaccountopeningform.

The additional information (Part II) are prescribed by Depositories for their depository
participants and by Association of Mutual Funds in India (AMFI) for all mutual funds. The
Portfolio Managers, Venture Capital Funds, and Collective Investment Schemes shall capture
the additional information specific to their area of activities, as considered appropriate by
them.TheintermediariesshallalsocontinuetoabidebyCircularsissuedbySEBIfromtimeto
timeforpreventionofmoneylaundering.

Section4.2.1:DocumentsforVerification
ThefirstparaofthefirstpointonNonbodyCorporate/IndividualsInvestorsshouldread
as All nonbody corporate investors have to submit any one of the following documents as
given below prescribed by SEBI, along with the stipulated KYC Application Form (Part I) and
AccountOpeningForm(PartII)aspertheformatandsubmitthesametotheDPalongwiththe
agreement duly executed on a stamp paper of appropriate value. . Further, the DP shall be
responsibleindecidingthevalueofthestamppaper.Thescheduleoffeestobechargedbythe
DPtotheClientshouldformapartoftheagreement.Abeneficiaryaccountcanonlybeopened
afterobtainingaproofofidentityandaddressoftheapplicant.AnauthorizedofficialoftheDP
should verify the photocopies of any of following documents submitted with their
correspondingoriginalsandafterputtinghis/hersignatureonthemwithremarks"verifiedwith
original"beforeproceedingtoopentheaccount.
ItismandatoryforallDPstocarryoutinpersonverification(IPV)oftheirClients.Atthetime
ofopeningdemataccounts,theDPshouldestablishtheidentityoftheapplicant(s)(including
guardianincaseofminoraccount)byverifyingthephotograph(s)affixedintheKYCApplication
Form (Part I of Annexure J) as well as proof of identity document(s), with the person
concerned.Further,incaseofjointaccounts,IPVneedstobecarriedoutforalltheholdersof
theaccount.DPmayusewebcameraforcarryingoutIPVforopeningofdepositoryaccounts
subject to compliance with other SEBI guidelines/circulars relating to opening of depository
accountsincludingverificationofdocuments.
Upon the applicant(s) submitting the KYC Application Form and the account opening form,
proofofidentity&addressdocumentsandPANdetails,theDPshouldfollowtheprocedureas
givenbelow:

I. Verifytheidentityoftheapplicant(s)asclarifiedabove.
II. Afterdueverification,theDPshallensurethatthefollowingdetailsarerecordedonthe
KYCApplicationFormatthetimeofIPV:
1. nameofthepersondoingIPV,
2. hisdesignation,
3. organization
4. hissignatureand
5. date
III. MannerofrecordingIPVdetailsonKYCApplicationForm:DPmayeitheraffixastampor
print the IPV details or write the same on the KYC Application Form. If IPV is done
throughwebcamera,thenmentionIPVthroughwebcamaswell.
IV. PlacewhereIPVdetailsaretoberecordedontheKYCApplicationForm:DPsmayrecord
thesameatanyappropriateplaceontheKYCApplicationFormasmaybedeemedfitby
the DP without making illegible the other details mentioned in the KYC Application
Form. For nonindividuals such as HUF, unregistered trust, etc. where the KYC
Application Form for nonindividuals is filled up and the depository account would be
openedinthenameoftheindividual(suchaskarta,trustee,etc.),theIPVdetailsmay,if
DPsfinditappropriate,berecordedattheAnnexuretoKYCApplicationFormwherethe
detailsofthekarta,trustee,etc.arementioned.
V. Attachment of separate sheet to the KYC Application Form or affixing stickers on the
KYCApplicationFormforrecordingofIPVdetailswillnotbepermitted.

The IPV carried out by one SEBI registered intermediary can be relied upon by another
intermediary.IncaseofStockbrokers,theirsubbrokersorAuthorisedPersons(appointedby
thestockbrokersaftergettingapprovalfromtheconcernedStockExchangesintermsofSEBI
CircularNo.MIRSD/DR1/Cir16/09datedNovember06,2009)canperformtheIPV.Incaseof
Mutual Funds, their Asset Management Companies (AMCs) and the distributors who comply
withthecertificationprocessofNationalInstituteofSecuritiesMarket(NISM)orAssociationof
Mutual Funds (AMFI) and have undergone the process of Know Your Distributor (KYD), can
performtheIPV.However,incaseofapplicationsreceivedbythemutualfundsdirectlyfrom
theclients(i.e.notthroughanydistributor),theymayalsorelyupontheIPVperformedbythe
scheduledcommercialbanks.InthecaseofNRIs/foreignnationals,consideringtheinfeasibility
ofcarryingoutIPV,insuchasituationphotocopiesoftheKYCdocumentsshouldbeattestedby
any of the entities viz; Notary Public, any Court, Magistrate, Judge, Local Banker, Indian
Embassy/ Consulate General of the country where NRI/FN is residing [outside India] to the
effectthatithasbeenverifiedwiththeoriginals.DPmustuseseparateKYCApplicationFormto
collect information for each holder for joint accounts (i.e. for first holder, second holder and
thirdholder)aswellasforguardianincasethesoleholderisaminor.

Under Section 4.2.1, I (a) Under the list of documents which can be submitted as Proof of
Identity,theUniqueIdentificationNumber(UID),Aadhaarhasalsobeenadded.

Section4.2.1,I(b)ProofofAddresstobereadasfollowsFollowingisthelistofdocuments
admissibleasProofofAddress:(Documentshavinganexpirydateshouldbevalidonthedate
ofsubmission.)
a. Passport/ Voters Identity Card/ Ration Card/ Registered Lease or Sale Agreement of
Residence/DrivingLicense/FlatMaintenancebill/InsuranceCopy/AadhaarLetterissuedby
UniqueIdentificationAuthorityofIndia.
b. Utilitybillslike(Notmorethan3monthsoldasondateofreceiptfordocuments).
i. TelephoneBill(onlylandline)
ii. Electricitybillor
iii. Gasbill
c. BankAccountStatement/Passbook(Notmorethan3monthsoldasondateofreceipt
fordocuments)
Dependingonthetypeofbankstatementissuedthefollowingchecksmustbedone:
i. Originalbankstatement:Theoriginalbankstatementisprintedonthestationeryof
the bank, carries logo & name of the bank, displays the name and address of the
Client.
ii. Copyofbankstatement:Inaddition,theauthorisedofficialoftheDPshouldverify
thephotocopyofthebankstatementsubmittedwiththecorrespondingoriginal.
iii. OriginalBankstatementonplainpaper(Computergenerated):
a. ThebankstatementclearlymentionsthenameandaddressoftheClient.
b. The bank statement is duly attested (signed and stamped) by the
authorised official of the bank mentioning the name and designation of
suchauthorizedofficial.
c. ObtainacancelledchequeleafinoriginalORaphotocopyofchequeand
the authorized official of DP should verify the same with the original
cheque.
d. Bankstatementissuedinelectronicform:
a. Print out of the bank statement clearly mentions the name andaddress of the
Client.
b. Obtain a cancelled cheque leaf in original OR a photocopy of cheque with the
nameoftheClientpreprintedonit.However,incaseofaphotocopyofcheque
itcanbeacceptedprovidedtheauthorizedofficialofDPverifiesthesamewith
theoriginalcheque.
e. SelfdeclarationbyHighCourtandSupremeCourtjudges,givingthenewaddressinrespect
oftheirownaccounts.
f. Proofofaddressissuedbyanyofthefollowing:BankManagersofScheduledCommercial
Banks/Scheduled CoOperative Bank/Multinational Foreign Banks/Gazetted Officer/Notary

public/electedrepresentativestotheLegislativeAssembly/Parliament/Documentsissuedby
anyGovt.orStatutoryAuthority.
g. Identity card/document with address, issued by any of the following: Central/State
Government and its Departments, Statutory/Regulatory Authorities, Public Sector
Undertakings,ScheduledCommercialBanks,PublicFinancialInstitutions,Collegesaffiliated
to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their
Members.
h. For FII/sub account, Power of Attorney givenby FII/subaccount to the Custodians (which
are duly notarized and/or apostiled or consularised) that gives the registered address
shouldbetaken.
i.

Theproofofaddressinthenameofthespousemaybeaccepted.

j.

Acceptanceofthirdpartyaddressascorrespondenceaddressindepositoryaccount1
a. Clientcanalsoprovidethirdpartyaddressascorrespondenceaddressindepository
account provided Participant ensures that all prescribed Know Your Client norms
arefulfilledforthethirdpartyalso.TheDPshallobtainproofofidentityandproofof
address for the third party. The DP shall also ensure that customer due diligence
norms as specified in Rule 9 of Prevention of Money Laundering Rules, 2005 are
compliedwithinrespectofthethirdparty.
b. DPshouldfurtherensurethatthestatementoftransactionsandholdingaresentto
theClientspermanentaddressatleastonceinayear.

However,theaboveprovisionshallnotapplyincaseofPMS(PortfolioManagementServices)
clients2.

The first para of point II of 4.2.1 For Corporate Investors to read as follows: All corporate
investors have to submit the following documents as prescribed by SEBI alongwith the
stipulatedKYCApplicationForm(PartI)andAccountOpeningForm(PartII)aspertheformat.
DPs shall ensure that in case of foreign entities, all transactions in the account are in
compliancewithFEMARegulations.Accordingly,DPsarerequiredtoobtainfromsuchforeign
entitiesnecessarydocumentsevidencinggeneral/specificapprovalsasmayberequiredunder
FEMA Regulations. Further, DPs are required to obtain a declaration from the foreign entity
thatithascompliedandwillcontinuetocomplywithFEMARegulations.DPsarerequiredto
useseparateKYCApplicationFormtocollectinformationforeachholderforjointaccounts(i.e.
forfirstholder,secondholderandthirdholder).

Pointsaddedafterpointno.4underthesameparawhichshouldreadas:
5. Copyofthebalancesheetsforthelast2financialyears(tobesubmittedeveryyear).

1
2

SEBICircularNo.CIR/MRD/DP/37/2010datedDecember14,2010
Referenceletterno.IMD/MT/165502/2009datedJune05,2009

6. Copyoflatestshareholdingpatternincludinglistofallthoseholdingcontrol,eitherdirectly
or indirectly, in the company in terms of SEBI takeover Regulations, duly certified by the
companysecretary/Wholetimedirector/MD(tobesubmittedeveryyear).
7. Photograph, POI, POA, PAN and DIN numbers of whole time directors/two directors in
chargeofdaytodayoperations.
8. Photograph, POI, POA, PAN of individual promoters holding control either directly or
indirectly.
9. CopyoftheBoardResolutionforinvestmentinsecuritiesmarket.

Section4.2.4:ClientParticipantAgreement
ThefirstlineofthesecondparaNSDLDPs..totheclientstandsdeleted.Thefollowingtobe
addedafterthesecondpara:
In NSDL, subsequent to opening of a depository account, certain information such as Client
MasterReportalongwithacopyoftheAgreementincludingchargestructureisrequiredtobe
providedtotheClient.
a) The Client Master Report and the scanned copy of the duly signed DP Client agreement
alongwiththechargestructureisprovidedtotheClientattheemailaddressrecordedintheDP
system.IncasetheDPisnotabletoprovidethesametoitsClientsbyemailduetoanyreason
(including bounced emails), the DP should ensure that the same is provided to the Client in
paperform.
b)Maintaintherecordsofdelivery/nondeliveryofemailstoClients.
c) When the Client provides email address at the time of account opening, inform the Client
thatsuchinformationwillbesentbyemailtotheClient.
d)IncasetheClienthasoptedforDISbookletalongwithaccountopeningorincaseofBSDA,
theDISbookletmustbeseparatelyissuedtotheClient.

Section4.2.5:TypesofApplicationForms
Point(a)shouldreadasName(s)ofaccountholder(s)DPshouldensurethename&address
of the applicant mentioned on the KYC form, should match with the documentary proof
submitted. If an application is received from a married lady, along with a PAN card in her
maidennamealongwithhermarriagecertificate,theBOaccountcanbeopenedinthemarried
nameofthelady.

In CDSL, by filling up transposition form, the share certificates with same holders but in
differentordercanbedematerialized.Investorsareadvisedtoopentheiraccountintheirfully
expandedname,i.e.,tospelltothefirstnameaswellasthemiddlename.Thiswouldobviate
any doubts about the veracity of the information. Investors can dematerialise all physical
securitiesheldinhisfullname,abridgedname,namewithinitialsoranyotherfashioninthis
account.Byopeningtheaccountinthefullest/expandedname,chancesofwrongcredits/debits
andrejectionofdematrequestsareminimised.Forexample,theremaybetwoinvestorswith
thesameinitialsandsamelastnameAKKhannamaybeeitherArunKumarKhannaorAshok
KishoreKhanna.Ifthenameisfullyspeltoutthereisnoambiguityandthereisnoneedthen
fortheDPtotakestepstoverifytheidentity.Similarly,investorcandematerialisesharesheld
inanyformofnamelikeA.K.Khanna,ArunK.Khanna,A.KumarKhanna,ArunKumarK.,etc.,
intooneaccount.
FirstParaofPoint(b)shouldreadasMailingandCommunicationAddress(es)shouldreadas
Client has the facility to mention two addresses in the KYC application form (Part I) i.e.,
correspondenceandpermanentaddress.Forboth,permanentandcorrespondenceaddresses
of a Client, DPs should ensure that they collect and verify the KYC documents. The
correspondenceaddresswouldbethedefaultaddressthatwouldbeforwardedtotheRegistrar
& Transfer Agent (RTA) as well as used for printing Transaction Statement (SOT) from
DepositorySystem.
For corporate accounts, a copy of Memorandum of Association, Articles of Association,
Certificate of Incorporation Board resolution permitting opening of account, the registered
address of the Company as well as addresses of the person(s) authorised to operate the
accountonbehalfoftheCompanyhavetobefurnished.PANcardofauthorizedsignatoriesto
be verified with original and taken on record. In case of CDSL, addresses of the person(s)
authorized to operate the account on behalf of the company need not be furnished. Also in
case of CDSL, PAN card of authorized signatories need not be verified with the originals or
maintainedforrecordpurpose.
Pointno.(e)Clearingmemberdetailsforaclearingaccount:lastlineaddedwhichshouldread
asThisisnotapplicableinNSDL,asClearingMembersmaintainingCMAccountswithDPsof
NSDLcanopenandmaintainonlyoneCMAccountperstockexchange.

Pointno.(f)Detailsofbankaccounttoreadas:Detailsofbankaccountoftheaccountholder,
including the 9digit code number of the bank and branch appearing on the MICR cheques
issuedbythebankhavetobefilledintheapplicationform.Companiesusethisinformationfor
printing them on dividend/interest warrants, etc. DPs can accept any one or more of the
documentsgivenbelowcanbeacceptedasproofofbankdetails:

a)Specimencopyofcheque/cancelledcheque

b)CopyofBankStatement
c)CopyofBankPassbook
d)LetterfromBank

The aforesaid documents must contain the following information to be acceptable as

proofforbankdetails:

a)BankName
b)BranchAddress
c)IFSC/MICRcode
d)Nameofaccountholder
e)AccountNumber

FirstlineofPointno.(i)shouldreadasInviewoftheaforesaidSEBIdecision,DPsarerequired
tofollowbelowmentionedprocedureforPANCompliance.

FirstlineofPoint(b)ofpoint(i)shouldreadasInrespectofexistingaccountsthatarefrozen
due to noncompliance of PAN requirement upon the Client submitting the PAN card, DPs
shouldfollowtheprocedureinthebelowgivensequence.

TheparaonTheOperatingGuidelinesforthesamearegivenbelow:Iftheentitysubmitsthe
PANcard,DPsshould.verifyingwiththeoriginalstandsdeleted.

ParaonDetailsofIntroducerandSupportingDocumentsstandsdeleted.

Section4.2.6FormsforJointAccounts

Pointno.(g)Offootnote8shouldreadas(g)Afterallshareshavebeendemateralised,theBO
shallopenaanewdemataccountinthenameofthreeholders(max)andtransferallsecurities
from the previous account to the new account. After all the balances in such a joint account
becomenil,theaccountshouldbeclosed.

ParaonTranspositionstandsdeleted.

Section4.2.7FormsforHinduUndividedFamily(HUF)
New para added before the existing one The depository account . With joint holders,
whichshouldreadas:AsperSEBIsMasterCircularNo.CIR/MRD/DP/13/2013datedApril15,
2013,pointno.4.6itisstatedthatitisnotedthatasperlaw,incaseofHUF,sharescanbe
held in the name of Existing Karta on behalf of HUF. Therefore, HUF demat accounts can be
openedinthenameofExistingKartabutnotinthenameofDeceasedKartaandHUFentity.
Section4.2.8FormsforCompanies:ParaonDetailsofintroducerstandsdeleted.

Section4.2.9FormsforMinors
FirstParaandpointno.Iofsection4.2.9shouldreadasAminormayholdsharesthroughhis
guardian. Accordingly, a minor may open a depository account only through his guardian.
Procedureforopeningminoraccountisasfollows:
a. Obtain photocopy of the School Leaving Certificate/Mark sheet issued by Higher
SecondaryBoard/PassportofMinor/BirthCertificate.
b. ObtainProofofIdentity,ProofofAddress,PANandthephotographoftheGuardianas
pertheprocedurestatedinthebyelawsandcirculars.Carryoutinpersonverification
oftheGuardian.
c. Accountopenedinthenameofminorshouldnothavejointholdings.
d. TwoKYCApplicationFormsmustbefilledi.e.onefortheguardianandanotherforthe
minor(tobesignedbyguardian).
e. In case minor account, PAN details of the minor should be captured by the DP in the
DepositorySystemafterdueverification.

Point(3)ofpointIIofsection4.2.9shouldreadasIncaseofNSDL,suspendtheaccountfor
debitanddisablethestandinginstructionforcreditpertainingtotheaccountofMinor.Incase
ofCDSL,suchaccountisautomaticallysuspendedfordebits.

Point (9) of point II of section 4.2.9 should read as Any request or instruction from the
guardian,whicharetobeprocessedorishavingexecutiondatefallingonorafterthedatethe
MinorhasturnedMajor,shallbeprocessed/executedonlyafterreceiptofconfirmationfrom
theClient(MinorturnedMajor).

Section4.2.10PartnershipFirms

Points (a) to (e) under Procedure for opening an account in the name(s) of Partners for
holdingsecuritiesthatbelongtothePartnershipfirmdeleted.Thenewpointsunderthesame
headtoreadas
a) Copyofthebalancesheetsforthelast2financialyears(tobesubmittedeveryyear).
b) Certificateofregistration(forregisteredpartnershipfirmsonly).
c) Copyofpartnershipdeed.
d) Authorisedsignatorieslistwithspecimensignaturesandphotograph.
e) Photograph,POI,POA,PANofPartners.
f) TheaccountshouldbeopenedonlyinthenamesofPartners,operatedbythepartners
andthesecuritiesthatbelongtothePartnershipFirmcanbeheldinthisaccount.
g) ObtainanundertakingintheprescribedformatfromthePartnerstotheeffectthatthe
Partners would comply with the provisions of the Companies Act, 1956 and other
applicable statutes in respect of securities of the Partnership firm held in the account
openedinthenamesofthePartners.
h) Where the depository account would be opened in the name of individuals, carry out
the inperson verification of such individuals and recordthe detailsof IPV as per the
currentprocedure.

i) AsperCDSLoperatinginstructions,partnershipdeedistobetakenonrecord.

Section4.2.11Signatures/ThumbImpression

Afterthebulletedpointsthefollowingparashouldbeadded:Modeofcapturingofsignature
inthedepositorysystemforDPsofNSDL:
a. The DP should capture the Clients signature(s) as given in the KYC Application Form
and/orAccountOpeningFormintheDepositorySystem.Fornonindividualsalongwith
signatureofauthorisedsignatory(ies),capturethemodeofoperationinthedepository
system.
b. In case the trustee(s)/ partner(s) etc. are individuals, capture the signature(s) of the
individuals.Incasethetrustee(s)/partner(s)etc.oftheunregisteredtrust/partnership
firmarecorporations,companiesorentitiesregisteredundertheBombayPublicTrust
Act,1950orTheIndianSocietiesRegistrationAct,1860,capturethesignature(s)ofthe
authorisedsignatoriesinthedepositorySystem.
c. IlliteratePerson:AremarkshouldbeputinthedepositorySystem(undertheauthorised
signatorydetailsunder"Signatories"screen)atthetimeofopeningtheaccountthatthe
accountholderisilliterateordisabled.
d. Blind Person: A remark should be put in the depository System (under the authorised
signatorydetailsin'signatories'screen)thattheClientis"VisuallyChallenged".

Heading added to the para which starts with Illiterate persons at the time of opening
account opening form, as a witness which should read as Process of Opening an
account of an Illiterate Person. The sentence which reads as NSDL DPs should put a
.thattheaccountholderisilliterateordisabledstandsdeleted.

Section 4.3.1 Procedure to Open Clearing Member account: The para to read as The steps
undertakentoopentheCMaccountaresameasthoseofindividuals.Thedifferenceliesinthe
type of form and details to be filled in and documents to be submitted. In NSDL, the major
differenceisthattheclearingmemberhastofirstregisteritselfwiththeclearingcorporation
and obtain a clearing corporation clearing member identification number (CCCMID). The
clearingaccountisidentifiedbythecombinationofCCCMIDgivenbytheclearingcorporation,
CMBPIDgivenbythedepositoryandtheClientIDgivenbytheDP.Beforeopeningaclearing
account, the DP should send to the depository the clearing member's account opening form,
letterissuedClearingCorporationprovidingCCCMIDandcopyofSEBIregistrationcertificate.
The Depository then allots the CMBPID. Based on the CMBPID so allotted, the account is
then activated by the DP and ClientID is generated. The date of opening of the account in
depositoryparticipantsystemtothedepositoryiselectronicallycommunicated.However,w.r.t
CDSL,theconceptofCMBPIdisnotthereandthesystemgeneratesa16digitIDsimilartothe
BO ID. The Clearing member accounts with CDSL can be opened by a DP just like any other
demat account after the formalities as mentioned in the CDSL DP Operating instructions are
fulfilled.

TheparaonDetailsofIntroducerinsection4.3.1toreadasAseparateenclosurehastobe
attachedtotheaccountopeningformspecifyingthefollowingdetails:
1.Nameandaddressoftheclearingmember
2.Nameandaddressoftheclearingcorporation
3.ClearingCorporationId(CCID)
4.ClearingMemberId(CMID)
5.StockExchangeclearingcode
6.SEBIRegistrationnumber
7.Tradename
8.CopyofBoardResolutionforauthorisedsignatoriesshouldalsobesubmitted.

LastParainsection4.3.1isnotapplicableincaseofNSDL.

Section4.4.1ClosureofClientsRequest:Para4shouldreadasBeforeclosingtheaccountthe
DP should ensure that all pending transactions have been settled. The request for closure
shouldbeprocessedonlyafterensuringthatthereisnobalancelyingintheaccount.Incase
Participant is unable to close the account due to pending demat/ remat requests, ISIN in
suspended status or due to open pledges, etc., the Participant should freeze the account i.e.
suspendedfordebitandcredit.InCDSL,accountclosurecanbeinitiatedevenifbalancesare
presentintheaccount.CDSLsystemwillchangestatusofsuchanaccounttoTOBECLOSED
andclosetheaccountwhenallbalancesarereducedtozero.Ifaclientmakesarequestfor
closureofaccounts,DPsshouldprovidetheStatementofTransaction(SOT)totheClientforthe
periodfromthebeginningofthequarterinwhichtheaccountisclosedtillthedateofclosure.
Further, the SOT should bear the words "Account Closed" and should be prominent. For this
purpose,DPscanaffixarubberstamporcreateasuitablesystemthatwillclearlyshowonthe
SOTthattheaccounthasbeenclosed.

LastparaunderFacilityforcancellationoflongpendingdematrequeststoreadasAfterthe
pending dematerialisation request(s) is/are rejected/ canceled, the Participant can close the
accountofsuchClients.

Section4.4.5:MassShiftingofAccounts:Para2standsdeleted.Point(4)lastlinetoreadas
Application needs to be made for waiver only in case of shifting of accounts through inter
depositoryandtransferstolegalheirsandnomineesincaseofNSDL.

Section4.6ChangesinClientdetails,lastlinesThenamesofthe..demataccountstands
deleted.

Section4.6,ChangeofAddressforIndividual Clients:Point(b)toreadasProofofidentity
[copyofanyoneofthedocumentsoftheClient(soleholderoreitheroftheholders)visiting
theofficeoftheParticipant](OnlyincaseofNSDL).

Section 4.6, a new heading added with content which should read as Change of name of
BeneficialAccountHolder:
For effecting change in name in the depository account of an individual BO, a request letter
duly signed by the holder whose name is changing alongwith self attested copies of the
followingdocument(s)arerequired:
Sr.No.
1

Reasonfornamechange
Onaccountofmarriage

Documentsrequired
(i)MarriageCertificateor
(ii)CopyofPassportshowinghusbandsnameor
(iii)Publicationofnamechangeinofficialgazette.
On account of reasons other (i)Publicationofnamechangeinofficialgazette.
thanmarriage
Changeinfathersname
(i)Publicationofnamechangeinofficialgazette.

Afterthenamechangeiscarriedout,theDPisrequiredtosendacommunicationvialetter/
email/ClientMasterReport/ClientModificationLettergeneratedfromtheDPSystemorits
back office or any other mode which the DP may deem fit to the Clients informing about
changescarriedoutintheirname.
Section 4.6, Change of Signature, Last Para, last line which read as Since the client
statementfromtheclientstandsdeleted.

Questionno.4deletedandnewQuestionno.4toreadasThebeneficialownersnameinthe
accountcanevenbechangedaftertheaccounthasbeenopened.StatewhetherTrueorFalse?
(a) True
(b) False
Ans:(a)

Chapter5:FunctionsofDepositoryParticipantTransmissionandNomination

7th and 8th Bulleted Points of Section 5.3.1 Transmission of Securities held singly in the
Depositorywithnominationtoreadas:
thephotographoftheNomineeisannexedtothenominationformincaseofNSDL.
theNomineehassignedthenominationformandguardianincaseofthenomineebeinga
minorincaseofNSDL.
ParaunderSection5.3.1toreadasUponthedeathofthesoleholderorthedeathofallthe
joint holders, as the case may be, the nominee shall request the DP in writing alongwith an

Originaldeathcertificateoracopyofthesame(dulynotarized/attested)NotaryPublicorbya
GazettedOfficerfortransmittingthesecuritiescoveredbythenominationtotheaccountofthe
Nominee, held with any Depository, as per the Client Master Report, submitted by the
nominee, if the nominee has a demat account in individual capacity with another DP. If the
NomineedoesnothaveanaccountwiththeDepository,theNomineeshallberequiredtoopen
anaccountwithanyDepository.
Section5.3.2TransmissionofSecuritiesheldsinglyintheDepositorywithoutnomination
Point 1 to read as Original or a copy of the death certificate, duly notarized/ attested by a
gazettedofficerorNotaryPubliccanalsobeaccepted.

Pointsiiiandivof(c)toreadas:
iii.NoobjectionCertificate(s)fromallthelegalheir(s)whodoarenotapplicants,conveyingno
objectiontosuchtransmission.
iv.AsanalternateaNoObjectionCertificatefromalllegalheir(s)whoarenotapplicants,a
copy of Family Settlement Deed duly notarised by a Notary Public or attested by a Gazetted
Officer and executed by all the legal heirs of the deceased BO, provided that the Family
Settlement Deed clearly vest the securities in favour of the person seeking transmission in
his/her name and vesting of securities in his/her name is not contingent upon any other
onerousconditionsinsuchFamilySettlementDeed.

Section 5.3.3 Transmission of Securities held jointly in the Depository: 3rd and 4th bulleted
pointstoreadas
Ensure that transmission form is accompanied with a original or copy of notarised /
attesteddeathcertificatebyagazettedofficerorNotaryPublic.
VerifysignatureofthesurvivingClient(s).

Chapter6:FunctionsofDepositoryParticipantDematerialization

Section6.2.2ProcedureforDematerialisation,PowerofAttorneyHolderaddedto6thbulletof
point(3)(DRFissignedby).

PointNo.10,thewordsthefacilityisnotavailablewithCDSLstandsdeleted.

UndersectionChecklistforInvestors,pointno.6toreadasTheorderoftheholdersshould
besameasthatintheaccountopeningform.Incaseofchangeinorderofnames,Investorhas
tofillintranspositionrequestformalongwiththeDRF.Pointno.7standsdeleted.Points8and
9renumberedaspoints7and8.

UndersectionChecklistforDPs,point(d)toreadasd. VerifythattheDRFsubmittedbythe
clienthasbeenfilledcompletelyanddulysigned.Newpoints(f)and(g)addedwhichshould
readas:
(f)TheDPhastoissuetotheclientanacknowledgementslipdulysignedandstamped.
(g)Whilesubmittingthesharestheyshouldbedefacedbymentioningonit"surrenderedfor
dematerialization".
Subsequentpoints(f)to(q)renumberedas(h)to(s).
Section6.2.3RejectionofDRF,ActiontobetakenbyDP/Clientunderpointno.9toreadas
R&T will not retain any of the incorrect or incomplete documents but will return all the
documentstotheDP.DP/ClientmaycontactR&TAgentforanyfurtherclarification,quoting
reference of Objection letter to enable R&T Agent to link related entries. DP/Client may
forwarddocumentstopertinentR&TAgentwithfreshDematRequestForm.
Action to be taken by DP/Client under point no. 11 to read as R&T Agent will return all the
documentandtheDPwillsetupnewDRNwiththecorrectsignatureanddocuments.DP/Client
maysubmittoR&TAgentafreshDematRequestFormdulysignedbyholder(s)inexactmanner
asrecordedearlierwithR&TAgent.Incaseholder(s)is/areunabletoreproducethesignatures
asrequired,specimenofsignature(s)ofsignature(s)onDematRequestFormmaybeverifiedby
a Bank Manager under his official stamp/seal, giving full particulars/details of holder(s) bank
accountnumber,etc.
Section6.2.5TransmissioncumDematerialisationofSecurities,firstparalastsentencetoread
as Original or copy of the death certificate of the deceased holder(s), duly notarized or
attestedbyaGazettedOfficerorbyanotarypublic.

Section6.2.5,ParaonProcedureforDematerializationofShareswhichareheldinmorethan
threenamestoreadasIncasethenumberofjointholdersaremorethanthree,theDPhasto
processthedematerializationrequestasperusualprocedureensuringthatthemainBOname
ismentionedas1stAccountHolderandthebalancejointholdersareaccommodatedinthetwo
jointholdersnamesbutensuringthatthepatternofholdingasperthecertificatetallieswith
thepatternofholdingaspertheaccount.IncaseofNSDL,enterthefirstholdersnameinthe
firstholdersfieldandaccommodatingtherestofthenamesinthefieldsforsecondandthe
thirdholder,eg.:IncaseofjointholdingsinfourjointnamesofMr.A,Mr.B,Mr.C&Mr.D,
the account can be opened in the DPM as follows; First Holders Name : 1. Mr. A; Second
Holders Name 2. Mr B; Third Holders Name 3. Mr. C 4. Mr. D. Further, the standing
instructions to receive credits, receipt instructions, new issue applications and any other
instructionwhichhastheeffectofcreditingthisaccountshouldnotbeaccepted.Appropriate
annexure should be attached to the account opening form in order to include various details
viz; name, address, signatures, etc. of more than three holders. An undertaking should be
obtainedfromtheClientonthelinesthat"theClientshallnotusethisaccountforthepurpose
of allotments in the primary market or purchases from the secondary market and hence no

instructionsotherthanfordematerialisation,bonus,rights&preferentialofferwillbegivenby
theClienttoanypersonwhichhastheeffectofcreditingthisaccount".

Section6.3,Rematerialisation,para5toreadasDPshouldforwardtheRRFtotheIssueror
its R&T Agent within seven days of accepting the RRF from the client. The Issuer or its R&T
Agent, after validating the RRF, should confirm to the depository that the RRF has been
accepted. On receipt of such acceptance from the Issuer or its R&T Agent, the depository
removes the balances from the respective client's account by debiting the account. On
rematerialisation,R&T Agentissuessecuritycertificatesasperthespecificationsgivenbythe
clientintheRRF.Thereafter,theIssueroritsR&TAgentdespatchesthesecuritycertificatesfor
therematerialisedsecuritiestotheclientandhisnameisenteredintheRegisterofMembers
ofthecompany.Thecertificateofsecuritiesshouldbesenttotheclientswithinaperiodof30
daysfromreceiptofsuchRRFbytheIssueroritsR&TAgent.

Section6.3.2RematerialisationProcess,pointltoreadas:TheDP,onreceivingconfirmation
ofdebitentryintheDPsystem,shouldinformtheclientaccordingly.Newpointsmandn
addedwhichwillreadas:
(m) Issuer / R & T Agent should send the certificate to BO with in 30 days from the date of
confirmingtherequestinthedepositorysystem.
(n)Notradingispossibleonthesecuritiessentforrematerialisation.

Chapter7:FunctionsofDepositoryParticipantTradingandSettlement

Section 7.2 Settlement of OffMarket Transactions, Para 3, last line to read as If adequate
balancesarenotreceivedtilltheendofthedayoftheexecutiondate,theinstructionwillfail
(InCDSLaswellasNSDL).
Section 7.3 Settlement of Market Transactions, Para 2 should read as The broker has to
ensurethatthepayininstruction[normalpayinorearlypayin]isenteredusingtheCMIDand
/orensurethatsufficientbalanceisthereinhisCMaccount/respectivesettlementnumber
andmarkettypebeforethepayindeadlineprescribedbythestockexchange.
Para3,secondsentenceshouldreadasThebrokerthengivesdeliveryinstructionstohisDPto
transfersecuritiesfromitsCMaccounttothebuyer'saccount.
Section 7.3.1.3 Clearing Member Para to read as Every broker in a stock exchange
participating in settlement process through depository is required to open clearing member

account.TheseareidentifiedwithBOIDs/CMBPIDsandcalledas'CMaccounts'.Ifabroker
dealsinmorethanonestockexchange,heisrequiredtohaveaseparatesetofCMaccounts
perstockexchange.TheDIslipshouldcontaintheBOID/CMBPIDsofaCMaccountrelevant
tothestockexchangeinwhichthetradewasdone.

Section 7.3.1.5 InterSettlement Transfers, sub heading CM Settlement to CM Settlement

InstructionstoreadasCMSettlementtoCMSettlementInstructions/CMPooltoCMPool
AccounttransferandtheparatoreadasTheCMmaygiveinstructionstoitsDPtodebitits
settlement / Pool account and credit the settlement account of another CM in a prescribed
format.TheCMmaygivereceiptinstructionstoitsDPforcreditingitssettlement/Poolaccount
fromsettlement/PoolaccountofanotherCMintheformatlaiddown.Alternatively,aCMmay
givestandinginstructiontoitsparticipanttocredititssettlement/Poolaccount.TheDPshall
ensurethattheinstructionformiscompleteandthesignatureoftheCMisvalid.TheDPshall
executetheinstructionsoftheCMtodebit/creditthesettlementaccountoftheCM.

Chapter8:SpecialServicesPledge&Hypothecation

Section 8.2.1 Creation of Pledge/Hypothecation by Pledgor, Para 2 to read as The DP then

enters the details of the request in DP system as a pledge/hypothecation. On entering the
details, a pledge sequence number for the request is generated. The DP then verifies it and
confirms the requests. Securities are then debited from the free or lockedin balances and
creditedaspledgesetupbalanceinthedemataccountofthepledgor.TheDPintimatestothe
pledgor,thepledgesequencenumber.Figure8.1givestheprocedureforpledgingofdemat
shares.
Section 8.2.2 Procedure for Confirmation of Creation of Pledge/Hypothecation by Pledgee,
Para 3, 3rd sentence to read as DP of the pledgee must confirm the creation of
pledge/hypothecation before the date of expiry of pledge/ hypothecation mentioned in the
requestformforcreationofpledgesubmittedbythepledgor(notapplicableincaseofNSDL).
Section8.2.5InvocationofPledgebyPledgee,anewparaaddedattheendwhichshouldread
as, It is important to note that lockedin securities cannot be invoked before the lockin
releasedate.Incaseofhypothecation,thepledgorinstructsitsDPtoconfirmtheinvocationof
thehypothecationinDPsystem.
Section8.2.6InvocationofHypothecation(NotapplicableinCDSL),lastparawhichreadasIt
isimportant.DPsystemstandsdeleted.

Section8.2.7SubstitutionofSecuritiesOfferedinPledgestandsdeleted.
Box8.1:Checklistforpledge/hypothecation,point2standsdeleted.Point4toreadasEnsure
that request for confirmation of pledge is given before the closure date mentioned in the
instructionform(notapplicableincaseofNSDL).Point5 toreadasTheDPshallmaintain
copiesofallPledgeRequestForms(PRF),UnpledgeRequestForms(URF)&InvocationRequest
Forms(IRF)foraminimumperiodof10yearsoranysuchperiodinformedbySEBI/NSDL/CDSL
fromtimetotime.

Chapter9:SpecialServicesCorporateActions

Section 9.2.1 Monetary Benefits, Para to read as, On the basis of the particulars of the
holdingsofbeneficialownersreceivedfromthedepositoriesonthecutoffdate,theIssuer/its
R&TAgentdistributedividend,interestandothermonetarybenefitsdirectlytothebeneficial
owners.
Advancements in the field of electronic payment systems in the last decade have made
available various other modes of electronic funds transfer viz. National Electronic Funds
Transfer (NEFT), Real Time Gross Settlement (RTGS), etc. In view of such advancements, SEBI
hasvideitscircularno.CIR/MRD/DP/10/2013datedMarch21,2013modifiedtheframeworkas
under:
(i) For making cash payments to the investors, companies whose securities are listed on
the stock exchanges shall use, either directly or through their RTI & STA, any RBI
(ReserveBankofIndia)approvedelectronicmodeofpaymentsuchasECS[LECS(Local
ECS)/RECS(RegionalECS)/NECS(NationalECS)],NEFT,etc.
(ii) Furtherinordertoenableusageofelectronicpaymentinstruments,companieswhose
securitiesarelistedonthestockexchanges(ortheirRTI&STA)shallmaintainrequisite
bankdetailsoftheirinvestors
a) Forinvestorsthatholdsecuritiesindematmode,companiesortheirRTI&STAshall
seek relevant bank details from the depositories. To this end, vide circular
SEBI/MRD/DEP/Cir3/06
dated
February
21,
2006
and
letter
MRD/DEP/PP/123624/2008datedApril23,2008,depositorieshavebeenadvisedto
ensurethatcorrectaccountparticularsofinvestorsareavailableinthedatabaseof
depositories.
b) For investors that hold physical share / debenture certificates, companies or their
RTI & STA shall take necessary steps to maintain updated bank details of the
investorsatitsend.

IncaseswhereeitherthebankdetailssuchasMICR(MagneticInkCharacterRecognition),IFSC
(Indian Financial System Code), etc. that are required for making electronic payment are not
availableortheelectronicpaymentinstructionshavefailedorhavebeenrejectedbythebank,
companiesortheirRTI&STAmayusephysicalpaymentinstrumentsformakingcashpayments
totheinvestors.Companiesshallmandatorilyprintthebankaccountdetailsoftheinvestorson
suchpaymentinstruments.
Section9.2.5,RightsofLender(UnderStockLendingScheme)(NotapplicabletoCDSL)stands
deleted.
SubsequentSections9.2.6and9.2.7renumbered9.2.5and9.2.6respectively.

Chapter10:SpecialServicesPublicIssues

Section10.1.1PublicIssuefacilitythroughDepositoryStandsDeleted
Section10.1.1.1DPswithBranchesandthefirstparastandsdeleted.
After Figure 10.1, the following para should be read: Investors who have not opened a
depository account with a DP at the time of applying for the public offer and intend to take
creditintheirdemataccounthavetofollowaslightlydifferentprocedure.
1. The investor is required to fill up the application form (except the ClientID) and
approach the DP along with the payment instrument. The DP will open an account of
theinvestorafterobtainingadulyfilledupaccountopeningformanddulyexecutedDP
ClientagreementasapprovedbySEBI.
2. The DP ensures that the clientID is mentioned on the application form before
depositingitwiththecollectingbank.

Chapter11:SpecialServicesDebtInstruments&GovernmentSecurities

Section11.4.1SpecificFeaturesofDealingsinGovernmentSecurities
Footnote19shouldreadas,However,thespecificationontheformneednotbesameforall
the depositories, such as in case of CDSL, the DRF is the same for GSec as used for other
securities.

DematerialisationofPhysicalCertificates,Para3shouldreadas,TheDPscrutinisestheform
oftransfer,theDRFGSandthecertificateswhichinvolvesthefollowing:

Compare the order of holders' names on DRFGS and certificates with the client
account.

Whether the certificate details mentioned on the DRF and the physical certificates
enclosedtally.

Verification of client's signature on the DRF with the specimen signature recorded by
theDPduringtheaccountopening.
IncaseofTrustsandCorporateBodies,DPshallensuretheregistrationnumberofthe
signatoriesintheformoftransferismentioned.Anysignaturedifferencemayresultin
rejectionofthetransferbyRBI.
ISIN
Securitydescriptor
Whether Face value as mentioned in DRFGS tallies with what is mentioned on the
Certificates
ProcedureforTransferringGovernmentSecuritiesinSGLFormtoDepositoryaccount,Para4,
Bullet1shouldreadas,VerificationofClientssignatureoroftheauthorizedsignatoryincase
ofcorportesontheDRFGSwiththespecimensignaturerecordedwiththeDP.Ifthesignature
differs,theDPshouldsatisfyhimselfoftheidentityoftheclient.
Bullet 4 should read as The DP shall scrutinise that in case of different ISIN/Loan Codes
separateDRFGSissubmittedbytheClients.
Bullet 6 should readasDP must ensure thatnumber of securities isentered in the quantity
fieldinthedepositorysystem.

SettlementofRBITrades,ParaunderCorporateBenefitswithrespecttoGovernmentSecurities
toreadasDPmustensurethatchangesinthebeneficialowner'saccounts,suchaschangein
bankdetails,changeofaddress,etc.,areupdatedwellinadvanceoftheduedateofinterest
paymentand/orredemptionpaymentduedate.Thedepositoryshoulddistributetheinterest
to clients who have balances in government securities, on which interest payment is due,
beforetheEODoftheinterestpaymentduedate,afterRBIhasbeenmadeitavailabletothe
depository. The depository pays the redemption amount to clients who have balances in
governmentsecurities,dueforredemption,beforetheEODoftheredemptionduedate,after
theredemptionamounthasbeenmadeavailabletodepositorybyRBI.Thedepositorymakes

thepaymentdirectlytotheclientsortothebankaccountoftheclientsaspertheinstructions
receivedfromtheclients.
RematerialisationofGovernmentSecurities,UnderConversionofsecuritiesinDepositoriesSGL
IItoPhysicalSecurities,Firstsentencetoreadas,Aninvestoringovernmentsecuritiesholding
electronic balances in the depositories SGL2 account can convert them into physical
certificatesortobookentryformbytheprocessofrematerialisation.
Lastsentencetoreadas,ThedepositoryshouldforwardtherematerialisationrequesttoRBIin
theprescribedformincasephysicalcertificateisrequiredbytheclient.

NewChapters
Chapter13:AdditionalServicesQualifiedForeignInvestor(QFI)
13.1Introduction
Eligibilitycriteriaforqualifieddepositoryparticipant:
TobecomeaqualifiedDepositoryParticipant,aSEBIregisteredDPshallfulfillthefollowing:
a. DPshallhavenetworthofRs.50croreormore;
b. DP shall be either a clearing bank or clearing member of any of the clearing
corporations;
c. DP shall have appropriate arrangements for receipt and remittance of money with a
designatedAuthorisedDealer(AD)CategoryIbank;
d. DP shall demonstrate that it has systems and procedures to comply with the FATF
Standards,PreventionofMoneyLaundering(PML)Act,RulesandSEBIcircularsissued
fromtimetotime;and
e. DP shall obtain prior approval of SEBI before commencing the activities relating to
openingofaccountsofQFI.

WhoisaQFI?
QFIshallmeanapersonwhofulfilsthefollowingcriteria:
a. Resident in a country that is a member of Financial Action Task Force (FATF) or a
memberofagroupwhichisamemberofFATF;and
b. ResidentinacountrythatisasignatorytoIOSCOsMMOU(AppendixASignatories)ora
signatoryofabilateralMOUwithSEBI:

Providedthatthepersonisnotresidentinacountrylistedinthepublicstatementsissuedby
FATF from time to time on(i) jurisdictions having a strategic AntiMoney Laundering/
CombatingtheFinancingofTerrorism(AML/CFT)deficienciestowhichcountermeasuresapply,
(ii) jurisdictions that have not made sufficient progress in addressing the deficiencies or have
notcommittedtoanactionplandevelopedwiththeFATFtoaddressthedeficiencies:
ProvidedfurthersuchpersonisnotresidentinIndia:
ProvidedfurtherthatsuchpersonisnotregisteredwithSEBIasForeignInstitutionalInvestoror
SubaccountorForeignVentureCapitalInvestor.

Chapter14:AdditionalServicesRajivGandhiEquitySavingsScheme,2012(RGESS)
14.1Introduction

With an objective to encourage flow of savings of the small investors in domestic capital
market, the Government of India (GOI) announced a scheme named Rajiv Gandhi Equity
Savings Scheme, 2012 (RGESS) vide its notification dated November 23, 2012 ) to offer tax
benefits to New Retail Investors. Under RGESS, New Retail Investors will be eligible for
additional tax benefit (i.e.,deduction) upto Rs.25,000 under Section 80CCG upto a maximum
investment Rs.50,000 made in eligible securities. This benefit is over and above the limit of
Rs.1,00,000currentlyavailableunderSection80CofIncomeTaxAct.
Newretailinvestormustbearesidentindividual,whohasagrosstotalincomelessthanor
equaltoRs.12Lakh.Further,suchaninvestordoesnothaveademataccountorincasehasa
demataccountthenshouldnothavedoneanytransactionsinequityorderivativesasonRGESS
accountopening/designationdate.Incasethedemataccountisopenedasfirstholderand
there are no transactions in the equity or derivative segment then such a demat account is
eligible. In case of joint accounts, the second / third holder / nominees are eligible as new
retailinvestorsirrespectiveoftransactionsdoneinsuchdemataccounts.IntheUnionbudget
2013,theRGESSwasfurtherliberalisedtoenablefirsttimeretailinvestorstoinvestinmutual
fundsandlistedsharesnotinoneyearalone,butforthreesuccessiveyears.
EligibleinvestorwillberequiredtosubmitFormAtotheDepositoryParticipantatthetimeof
account opening or designating his/her existing demat account for taking the benefits under
RGESS.InvestorwillberequiredtoinvestineligiblesecuritiesconsideredforRGESSinvestment,
whicharefollows:
a. Equitysharesofselectedcompanieswhichincludes:
1) CompaniesfallinginthelistofCNX100ofNSEorBSE100
2) PublicsectorenterprisescategorizedbytheCentralGovernmentasMaharatna,
NavratnaorMiniratna.

b. UnitsofMutualFund(MF)schemeswhichareRGESScompliant.
c. UnitsofExchangeTradedFunds(ETFs)whichareRGESScompliant
d. Followon public offers (FPOs) IPOs and New Fund Offers (NFOs) of above mentioned
companies/funds.
Investors can invest in eligible securities through Secondary Market (i.e., by approaching any
SEBI registered Stock Broker of your choice), Mutual Funds (i.e., by approaching any Mutual
Fund distributor or a SEBI registered Stock Broker) or IPO / NFO of RGESS compliant
companies/funds). Investors will be required to ensure to provide demat account details i.e.,
DematAccountNumberandDPIDontheconcernedapplicableform.
Themodeofholdingeligiblesecuritieswillbeinademataccount.Othersecurities(viz.,equity
shares, debentures, bonds, mutual fund units, etc.) can also be held in the demat account
designatedforRGESS.Further,incaseinvestorsdonotwishcertainsecuritiescreditedtotheir
demat accounts to be considered for the RGESS, then they will be required to submit
declarationinaprescribedformati.e.,FormBwithinonemonthfromthedateoftransaction.
InvestmentholdingperiodunderRGESSisforthreeyearswhichincludesFixedLockinofone
year and Flexible lockin of two years. Declared eligible securities are not allowed to sell,
pledge or hypothecateeligible securities during Fixed Lockin period. During flexible Lockin,
eligible securities can be sold subject to certain conditions. The designated RGESS demat
accountwillbeconvertedintoaregularorordinarydemataccountattheendoftheflexible
lockinperiod.
TheDepositorywillfurnishanAnnualStatementoftheeligiblesecuritiesinvestedinortraded
throughtheRGESSdemataccounttotheinvestori.e.,demataccountholder.

Chapter15:AdditionalServicesBasicServicesDematAccount(BSDA)
15.1 Introduction

Withaviewtoachievewiderfinancialinclusion,encourageholdingofdemataccountsandto
reduce the cost of maintaining securities in demat accounts for retail individual investors,
depositoryparticipants(DPs)arerequiredtomakeavailablea"BasicServicesDematAccount"
(BSDA)withlimitedservicesaspertermsspecifiedherein.
Eligibility:IndividualsshallbeeligibletooptforBSDAsubjecttothefollowingconditions
a. Alltheindividualswhohaveorproposetohaveonlyonedemataccountwheretheyare
thesoleorfirstholder.
b. Individualshavinganyotherdemataccount/swheretheyarenotthefirstholdershall
beeligibleforBSDAinrespectofthesingledemataccountwheretheyaresoleorfirst
holder.

c. TheindividualshallhaveonlyoneBSDAinhis/hernameacrossalldepositories.
d. ValueofsecuritiesheldinthedemataccountshallnotexceedRupeesTwoLakhsatany
pointoftime.
OptiontoopenBSDA:TheDPshallgiveoption:

a. To open BSDA to all eligible individuals who open a demat account after the date of
applicabilityofSEBIcircularCIR/MRD/DP/22/2012datedAugust27,2012;
b. ToalltheexistingeligibleindividualstoconverttheirdemataccountintoBSDAonthe
dateofthenextbillingcyclebasedonvalueofholdingofsecuritiesintheaccountason
thelastdayofpreviousbillingcycle.
Charges:
a. Thechargestructuremaybeonaslabbasisasindicatedbelow:
1. NoAnnualMaintenanceCharges(AMC)shallbelevied,ifthevalueofholdingis
uptoRs.50,000.
2. For the value of holding from Rs 50,001 to Rs 200,000, AMC not exceeding Rs
100maybecharged.
b. The value of holding shall be determined by the DPs on the basis of the daily closing
priceorNAVofthesecuritiesorunitsofmutualfunds,asthecasemaybe.Wheresuch
price is not available the last traded price may be taken into account and for unlisted
securitiesotherthanunitsofmutualfunds,facevaluemaybetakenintoaccount.
c. IfthevalueofholdinginsuchBSDAexceedstheprescribedcriteriaatanydate,theDPs
maylevychargesasapplicabletoregularaccounts(nonBSDA)fromthatdateonwards.
d. TheDPsshallreassesstheeligibilityoftheBOsattheendofeverybillingcycleandgive
optiontotheBOswhoareeligibletooptforBSDA.
ServicesforBasicServicesDematAccounts:
a. Transactionstatements:
1. Transaction statements shall be sent to the BO at the end of each quarter. If
therearenotransactionsinanyquarter,notransactionstatementmaybesent
forthatquarter.
2. If there are no transactions and no security balance in an account, then no
furthertransactionstatementneedstobeprovided.
3. Transactionstatementshallberequiredtobeprovidedforthequarterinwhich
theaccountbecameazerobalanceaccount.
b. HoldingStatement:

1. Oneannualphysicalstatementofholdingshallbesenttothestatedaddressof
theBOinrespectofaccountswithnotransactionandnilbalance.
2. Oneannualstatementofholdingshallbesentinrespectofremainingaccounts
inphysicalorelectronicformasoptedforbytheBO.
c. Chargesforstatements:Electronicstatementsshallbeprovidedfreeofcost.Incaseof
physicalstatements,theDPshallprovideatleasttwostatementsfreeofcostduringthe
billing cycle. Additional physical statement may be charged at a fee not exceeding
Rs.25/perstatement.
d. AllBOsoptingforthefacilityofBSDA,shallregistertheirmobilenumberforavailingthe
SMSalertfacilityfordebittransactions.

e. At least Two Delivery Instruction Slips (DIS) shall be issued at the time of account
opening.
f. All other conditions as applicable to regular demat accounts, other than the ones
mentionedaboveshallcontinuetoapplytobasicservicesdemataccount.