Hello Friends,
I would like to share a bit of knowledge about Depository Services & DP i.e Depository Participant.
Trying to put the things in simple terms...
When u buy shares or sell the shares, the transaction goes through a specific medium. The Depository Services provider settles the trade or transactions u make in stock markets. The depository is linked with Exchange boards like NSE,BSE and few others. Like banks, even the depository service providers have a clearing house where at the end of the day all the buying n selling settlements takes place between buyers n sellers through stock brokers.
Depository is a company which holds the shares you purchase. Right now there are 2 depository companies. NSDL (National Securities Depository Ltd) & CDSL ( Central Depository Services Ltd.)
And a depository participant is an institution which acts as an agent between an investor and Depository servie provider. It can be a stock broker, a bank or any NBFC.
There are few other interesting points i would like to discuss regarding depository participants and depository services providers. If the readers here show good response, i would continue to share more knowledge on this.
Thank You,
Bijoy Momaya
CAclubindia
