Must Knows

Central Depository Services Ltd or CDSL: Introduction and process of registration

[ecis2016.org] The primary aim of CDSL is to provide a centralised space for all people interested in their e-services. 

CDSL full form is Central Depository Services Ltd. CDSL was founded in 1999 as a central securities depository in India. This financial organisation serves as a storehouse for securities, shares and other tradable market instruments. The primary aim of CDSL is to provide a centralised space for all people interested in their e-services. CDSL holds shares listed on BSE only, as opposed to NSDL, which only holds NSE shares. There is a 16-digit unique DEMAT number for CDSL, which is similar to an account number.

What does CDSL do?

CDSL maintains all records of electronic transactions, which are made to all depository participants (DP). DPs act as special agents of CDSL, and they manage the assets with the company for clearing, holding and settlement. The Beneficial Owner (BO), or simply speaking, the investor, can open a dematerialisation account (DEMAT) through the DPs. This account would enable investors to transfer securities from the DP to their own accounts. There is no longer any need to issue physical certificates to determine the ownership of a share. 

CDSL also takes precautionary measures to ensure that all the company’s DPs provide clear information on the investors’ data and dealings. Additionally, they are required to provide detailed overviews to their investors and can be held accountable for their actions in the marketplace. BSE has the advantage of communicating with CDSL about their shareholders when issuing dividends. This process would allow BSE companies to transfer the amount directly to the investors or BOs.

How to open a CDSL account?

CDSL offers online services which allow investors to create their accounts entirely virtually. Investors cannot directly open a demat account on CDSL. They will require a DP or stockbroker who is connected with CDSL. The CDSL website also allows you to find the best depository participant near you.

Once investors have decided on their preferred stockbroker or DP, details about the registration process and guidelines will be shared with them through the selected DP. The DP will maintain the account on behalf of the investor. The DP and the investor or BO will constantly be in touch to examine reports and investment decisions.

Documents required to open a CDSL account

While the DP you choose will help you create and maintain an account on CDSL, you have to provide certain personal documents as well. The registration process requires people to enter and verify their personal information for legal purposes. Here is a list of documents which are required by CDSL for registrations:

  • Identity proof
  • Date of birth
  • Address proof
  • Aadhaar card details
  • Phone number
  • Email ID
  • Yearly income
  • Occupation

Note that all the KYC documents need to be updated if the investor avails of custodian services.

List of CDSL depository participants for online accounts

CDSL has a rather long list of DPs or depository participants for creating and maintaining accounts. If you are looking for a few trusted DPs with good reviews, take a look at this list below:

  • Aditya Birla Money Limited
  • SBIcap Securities Limited
  • Angel Broking Limited
  • HDFC Securities Limited
  • Paytm Money Limited
  • Bajaj Financial Securities Limited
  • Bank Of Baroda
  • Fortune Capital Services Private Limited
  • Hindustan Tradecom Private Limited

Source: https://ecis2016.org/.
Copyright belongs to: ecis2016.org

Debora Berti

Università degli Studi di Firenze, IT

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