NATIONAL SECURITIES DEPOSITORY LIMITED - NSDL
NATIONAL SECURITIES DEPOSITORY LIMITED - NSDL
NATIONAL SECURITIES DEPOSITORY LIMITED - NSDL
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<strong>NATIONAL</strong> <strong>SECURITIES</strong> <strong>DEPOSITORY</strong> <strong>LIMITED</strong>Compliance Manual for Depository Participants12 th EditionJuly 2010
PREFACEThe Depositories Act 1996, SEBI (Depositories and Participants) Regulations, 1996,the Bye Laws of <strong>NSDL</strong>, Business Rules of <strong>NSDL</strong>, Circulars issued by <strong>NSDL</strong> etc.require the Depository Participants (DPs) to comply with certain proceduresrelating to functions in depository system. This manual is a compilation of relevantsections of The Depositories Act, 1996, SEBI (Depositories and Participants)Regulations, 1996, Bye Laws, Business Rules and circulars issued by <strong>NSDL</strong> (upto30.06.2010) arranged topic wise. A further segregation is made at sub-topiclevel wherever possible for the convenience of the readers.A subject wise index based on circulars is given separately to facilitate directaccess to the circulars. Additional space is provided at the end of each topic/sub-topic for manually updating the details of circulars issued after 30.06.2010.As per Bye Law 6.2.1 (vi), the depository may make it mandatory for a DP toappoint a Compliance Officer who shall interact with the depository on behalf ofthe DP for compliance with the Bye Laws and Business Rules. This manual will beparticularly useful for the compliance officers of the DPs.We request the readers to send to us feedback on the usefulness of this manualand enhancement/improvement suggested in future editions of this manual.❏ ❏ ❏[ i ]
DISCLAIMERThis Manual provides information solely as a reference guide and is meant tosupplement the efforts of the Compliance Officer in carrying out his/her dutiesas a Compliance Officer. While every effort has been made to compile variousrelevant statues, this manual is not meant to be a substitute to the provisions ofThe Depositories Act 1996, SEBI (Depositories and Participants) Regulations, 1996,the Bye Laws of <strong>NSDL</strong>, Business Rules of <strong>NSDL</strong> and Circulars issued by <strong>NSDL</strong>. <strong>NSDL</strong>does not hold out that this compliance manual is exhaustive. Compliance Officersare advised to study original source for the sake of completeness on any compliancerelated matters.This Manual includes circulars issued by <strong>NSDL</strong> up to 30.06.2010. ComplianceOfficers should refer the circulars issued after that date to update themselves.The titles given in the manual are meant to draw attention of the reader anddoes not purport to summarize the contents of the circulars. Compliance Officersare advised to study the circulars thereof.❏ ❏ ❏[ ii ]
INDEX1. Account Openinga. General .............................................................................................. 1b. PAN ............................................................................................... 48c. Power of Attorney ............................................................................... 76d. Others .............................................................................................. 772. Dematerialisationa. General ............................................................................................ 83b. Transfer-cum-demat............................................................................. 98c. Transposition-cum-demat ..................................................................... 100d. Transmission-cum-demat ...................................................................... 1013. Instructions Processinga. General ........................................................................................... 103b. Controls on DI Forms ........................................................................... 128c. Others ............................................................................................. 1304. Transmission ............................................................................................ 1955. Provision of transaction statement ................................................................ 2056. Internal Controls/Reporting to <strong>NSDL</strong>/SEBIa. General ........................................................................................... 235b. Internal / Concurrent Audit ................................................................... 235c. Grievance Redressal ............................................................................ 272d. Termination of Participant .................................................................... 276e. SEBI Annual Fees ................................................................................ 276f. Information to SEBI ............................................................................. 2777. Grievance Redressal .................................................................................. 2798. DP Service Centres .................................................................................... 2999. Charges .............................................................................................. 31310. Anti Money Laundering ............................................................................... 33111. Connectivity/Reconciliation ......................................................................... 37312. Record Keeping ........................................................................................ 37713. Systemsa. General ........................................................................................... 383b. Backup ............................................................................................ 470c. Anti-virus ......................................................................................... 479d. Capacity Planning............................................................................... 48314. Renewal of registration .............................................................................. 50115. Matual Funds ........................................................................................... 507[ iii ]
CIRCULARS INDEXSubject Date(s) Page No.ACCOUNT OPENINGClarifications/guidelines issued afterMaster circular January 19, 2010 ...................... 1October 5, 2009 ........................ 2August 28, 2009 ........................ 3July 20, 2009 ........................... 3July 6, 2009 ............................. 3Master Circular on 'Account Opening' September, 2009 ....................... 5Bank Account details March 19, 2010 ....................... 36February 9, 2010 ..................... 36October 16 2008 ..................... 37June 4, 2008 .......................... 38April 7, 2008 .......................... 38April 30, 2002 ........................ 39Bank account details - MICR April 24, 2007 ........................ 40February 23, 2006 ................... 40Account opening Forms and New Features January 9, 2009 ...................... 42March 26, 2008 ....................... 42November 25, 2005 .................. 43September 15, 2005 ................. 43HUF accounts with joint holdings March 4, 2010 ........................ 43August 12, 2002 ...................... 44Clarification regarding capturing address in theclient master - IPO financing October 1, 2004 ...................... 44Exemption from obtaining latesttransaction statement June 18, 2007 ........................ 44SEBI Order December 24, 2009 .................. 46October 29, 2009 .................... 46February 3, 2009 ..................... 47February 3, 2009 ..................... 47March 13, 2007 ....................... 48PAN July 30, 2010 ......................... 48November 16, 2009 .................. 48June 12, 2009 ........................ 49January 9, 2009 ...................... 49November 18, 2008 .................. 50Septemer 29, 2008 .................. 50July 8, 2008 ........................... 51June 30, 2008 ........................ 51September 13, 2007 ................. 52[ iv ]
Subject Date(s) Page No.August 14, 2007 ...................... 55August 2, 2007 ....................... 56May 10, 2007 ......................... 57February 2, 2007 ..................... 58December 29, 2006 .................. 60September 27, 2006 ................. 62September 18, 2006 ................. 66August 9, 2006 ....................... 67July 24, 2006 ......................... 71July 18, 2006 ......................... 74May 22, 2006 ......................... 74March 25, 2006 ....................... 75Account operation - Power of attorney September 22, 2007 ................. 76Others July 30, 2010 ......................... 77December 3, 2009 ................... 78May 7, 2009 ........................... 79November 10, 2008 .................. 81DEMATERIALISATIONFacility for Cancellation of Pending Demat March 9, 2010 ........................ 84requests March 4, 2010 ........................ 87December 5, 2009 ................... 88September 19, 2009 ................. 92Demat request - POA holders January 1,1998 ....................... 94Demat request - Handling request in bulk January 6,1998 ....................... 94Demat request - Name matching January 11,1999 ..................... 94Demat request - Internal control on despatch February 25, 1999 ................... 94Demat Processing - Certificates submittedfor demat April 12,2004 ......................... 95Demat processing - SEBI directive to R&T Agent May 28, 1999 ......................... 95Demat processing - Time standard for rejecteddemat requests October 21,1999 ..................... 95Demat request - due care November 18, 1999 .................. 96Demat request - wrong release June 26,2000 ......................... 96Companies delaying demat request confirmation August 9, 2008 ....................... 96June 4, 2004 .......................... 97March 1,2004 ......................... 97November 6, 2001 ................... 97Request for rejection of pending demat &account closure February 22, 2003 ................... 97Transfer-cum-demat - Withdrawal of Scheme February 11, 2004 ................... 99[ v ]
Subject Date(s) Page No.INSTRUCTIONS PROCESSINGMaster Circular on Delivery Instruction Slips (DIS) September 9, 2009 ................. 104Instructions - Guidelines March 26, 1999 ...................... 122Instructions - Guidelines for Participantshaving CM accounts March 10, 2000 ...................... 123September 17, 1999 ................ 125Instructions - Acceptance deadline forRolling Settlements April 8, 2002 ......................... 126January 7, 2000 ..................... 126October 29, 1999 ................... 126Instructions - Procedure for Online InterDepository Transfer of Securities June 30, 2009 ....................... 127Precaution while processing DIS andDespatch of transaction statement October 28, 2005 ................... 127Instructions - Serial number validationfor Inter-depository instructions &NCFM certificates March 3, 2003 ....................... 128Instructions - DI form - Serial number control January 25, 1999 ................... 128Instructions - SEBI's stipulated proceduresfor issuance and verification June 2, 2000 ......................... 128Instructions - Revised DI forms March 26, 2008 ...................... 129October 30, 2002 ................... 130July 13, 2002 ........................ 130Transactions in Warehouse Receipts (Commodities)after Final Expiry Date July 31, 2009 ........................ 130July 17, 2009 ........................ 131Securities Lending & Borrowing Scheme (SLBS) January 11, 2010 ................... 131November 5, 2008 .................. 132April 16, 2008 ....................... 134January 29, 2008 ................... 135Delivery of Instructions through SPEED-e June 3, 2010 ......................... 150May 28, 2010 ........................ 150May 26, 2010 ........................ 154March 9, 2010 ....................... 155January 19, 2010 ................... 155December 31, 2009 ................. 156December 7, 2009 .................. 179September 10, 2009 ................ 180June 15, 2009 ....................... 181May 15, 2009 ........................ 182April 11, 2009 ....................... 182April 1, 2009 ......................... 183[ vi ]
Subject Date(s) Page No.March 21, 2009 ...................... 185March 13, 2009 ...................... 186December 13, 2008 ................. 187September 26, 2008 ................ 188June 26, 2008 ....................... 188April 11, 2008 ....................... 189April 04, 2008 ....................... 189April 03, 2008 ....................... 190January 3, 2008 ..................... 191Auto Cancellation of Unconfirmed Pledge/Hypothecation/SLB Orders due toAuto Corporate Actions October 13, 2001 ................... 191October 12, 2001 ................... 191Auto Corporate Action for redemption May 14, 2002 ........................ 192Stipulated time for transfer of securities fromCM Pool Account & Penalty April 22, 2004 ....................... 193TRANSMISSIONTransmission of securities in case of nomination September 1, 2009 ................. 200RBI Clarification on Transmission ofGovernment Securities March 19, 2009 ...................... 200Capturing of PAN details in the DPMASin case of transmission January 23, 2007 ................... 201January 18, 2007 ................... 201Transmission - Processing pending cases November 3, 2000 .................. 202Transmission cum Demat - Removal of time limit June 25,2001 ........................ 202PROVISION OF TRANSACTION STATEMENTTransaction Statements to clients throughInternet (Web-based or Email) May 21, 2008 ........................ 206March 7, 2002 ....................... 207Transaction statement - Provisions through Internet September 22, 1998 ................ 208Internet-based Demat Account Statement - IDeAS July 1, 2010 .......................... 210June 25, 2010 ....................... 210May 25, 2010 ........................ 211May 25, 2010 ........................ 212February 3, 2010 .................... 213September 22, 2009 ................ 213April 11, 2009 ....................... 214April 1, 2009 ......................... 214October 5, 2007 ..................... 217[ vii ]
Subject Date(s) Page No.September 29, 2007 ................ 217October 5, 2006 ..................... 217June 29, 2004 ....................... 218December 20, 2003 ................. 218Exemption from sending physical transactionstatement to subscribers of IDeAS March 24, 2006 ...................... 219Transaction Statement - Controls on despatch October 20, 1999 ................... 220Transaction Statement - Provide transactionstatement and not holding statement January 31, 2000 ................... 220Transaction Statement - RBI directive onproviding Transaction Statement to Bank clients February 22, 2003 .................. 220Transaction Statements - Footnote in the January 4, 2010 ..................... 221transaction statements sent to Clients December 23, 2004 ................. 221June 21, 2004 ....................... 221Providing Statement of transaction toBeneficial Owner consequent to account closure May 11, 2006 ........................ 222Transaction Statements - Exemption from givinghard copies of transaction statementsto Beneficial Owners by DPs August 24,2004 ...................... 222Transaction Statements - Exemption fromproviding transaction statements July 11, 2009 ........................ 223April 1, 2009 ......................... 223January 15, 2009 ................... 224September 9, 2005 ................. 224August 24, 2004 ..................... 225SMS Alert Facility March 4, 2010 ....................... 225January 6, 2010 ..................... 225August 29, 2009 ..................... 226May 6, 2009 .......................... 227April 22, 2009 ....................... 231June 5, 2008 ......................... 231April 22, 2008 ....................... 231September 29, 2007 ................ 232September 21, 2007 ................ 232August 10, 2007 ..................... 233INTERNAL CONTROLS/REPORTING TO <strong>NSDL</strong>/SEBIAlteration in memorandum of Association (MOA)for permitting the participant to undertakeDepository participant activities July 22, 2010 ........................ 236May 19, 2010 ........................ 236Submission of Form-B in softcopy (through email) August 17, 2009 ..................... 236[ viii ]
Subject Date(s) Page No.Compliance Schedule for reports/ certificatesby Participants July 28, 2009 ........................ 237Written communication to <strong>NSDL</strong> August 3, 2005 ...................... 238September 9, 2002 ................. 238Compliance Officer details December 29, 2005 ................. 239Submission of Compliance Certificate February 22, 2010 .................. 240by Participants July 6, 2006 .......................... 243Acknowledgment by <strong>NSDL</strong> for submission ofCompliance reports by Depository Participants October 19, 2006 ................... 244Format for filing charge structure January 8, 2007 ..................... 244Audited networth certificate - Financial statement September 16, 2009 ................ 245December 11, 2003 ................. 245Off-market transactions report January 1, 1998 ..................... 247Internal / Concurrent Audit November 10, 2009 ................. 247November 3, 2008 .................. 258March 22, 2007 ...................... 268June 24, 2006 ....................... 270April 20,2000 ........................ 272Internal Audit - Management comments April 4, 2001 ......................... 272Grievance redressal - Reporting April 19, 2010 ....................... 272November 25, 2003 ................. 275January 31, 2001 ................... 276October 6, 1998 ..................... 276Schedule of payment of SEBI Annual Fees January 3, 2003 ..................... 276Weekly demat information to SEBI notto be furnished December 20, 2003 ................. 277GRIEVANCE REDRESSALSEBI Circular - Exclusive E-mail Id for redressal June 18, 2010 ....................... 279of Investor Complaints February 23, 2010 .................. 279December 27, 2006 ................. 291Grievance redressal - reporting April 19, 2010 ....................... 293November 25, 2003 ................. 296January 31, 2001 ................... 296October 6, 1998 ..................... 296[ ix ]
Subject Date(s) Page No.DP SERVICE CENTRESAdequate internal controls for the branchesof Depository Participants July 9, 2007 .......................... 299Branch direct connectivity - More than5000 accounts August 27,1999 ...................... 301SEBI directive on creating awareness amongdemat account holders for PAN card November 21, 2006 ................. 301Qualified personnel - Mandatory June 30, 2000 ....................... 301June 6, 2000 ......................... 301August 13,1999 ...................... 302List of holidays June 5, 2006 ......................... 302Submission of details of all places from January 13, 2010 ................... 302where depository services are offered September 25, 2007 ................ 304Branch services - Display of type of services August 24, 2000 ..................... 309Requirement of NCFM/<strong>NSDL</strong> certified personnelat service centres February 11, 2009 .................. 309Clarification regarding franchise/servicecentre and NCFM qualifier person June 25, 2003 ....................... 309Branch Services - SEBI directiveon Branch connectivity March 6, 2003 ....................... 310Discontinuation of depository servicefrom service centers May 10, 2010 ........................ 310Procedure for Termination of Franchisee February 26, 2002 .................. 310CHARGESPolicy-SEBI Circular regarding AccountMaintenance Charges collected upfront on annualor half yearly basis on BO accounts July 2, 2010 .......................... 314Service tax on fees/charges payable March 23, 2010 ...................... 315by ParticipantsFormat for filing charge structure with <strong>NSDL</strong> January 8, 2007 ..................... 315Charges - waiver request to be submitted October 23, 2009 ................... 315within one month December 29, 2003 ................. 316June 29, 1999 ....................... 317SEBI Directive on reduction in Charges April 29, 2010 ....................... 317December 27, 2007 ................. 318August 12, 2005 ..................... 319December 29, 2003 ................. 320Closure of accounts with zero balances March 4, 2002 ....................... 322SEBI directive on non levy of charges for transferof securities consequent to account closure October 5, 2007 ..................... 323January 30, 2006 ................... 326January 5, 2006 ..................... 326[ x ]
Subject Date(s) Page No.Closure of accounts - SEBI Directive onabolishing account closure charges November 1, 2002 .................. 327Closure of accounts - Request receivedon plain paper December 18, 2002 ................. 327Monthly Bills March 5, 2004 ....................... 327Fees for Rematerialisation of Securities July 3, 2009 .......................... 328ANTI MONEY LAUNDERING June 18, 2010 ....................... 331March 26, 2010 ...................... 331February 19, 2010 .................. 334January 19, 2010 ................... 353December 2, 2009 .................. 356October 29, 2009 ................... 357October 15, 2009 ................... 357September 18, 2009 ................ 358June 9, 2009 ......................... 359January 29, 2009 ................... 361December 30, 2008 ................. 361October 16, 2008 ................... 363July 26, 2008 ........................ 364April 23, 2008 ....................... 365January 17, 2008 ................... 366November 12, 2007 ................. 367July 11, 2007 ........................ 368August 25, 2006 ..................... 370July 17, 2006 ........................ 370CONNECTIVITY / RECONCILIATIONReadiness for Dial-up connectivity Nov 11, 2006 ......................... 373October 9, 2002 ..................... 374WAN to WAN Connectivity December 18, 2001 ................. 374RECORD KEEPINGSEBI circular on maintenance of records December 12, 2009 ................. 379and documents August 12, 2005 ..................... 380SYSTEMSDirect connectivity of DPM System with the Back June 30, 2010 ....................... 384Office System of the Participant May 21, 2010 ........................ 384December 7, 2009 .................. 386December 5, 2009 .................. 386[ xi ]
Subject Date(s) Page No.November 14, 2009 ................. 386November 9, 2009 .................. 386November 6, 2009 .................. 387August 21, 2009 ..................... 387Master Circular on back office file formats August 9, 2008 ...................... 387Multi Protocol Label Switching (MPLS) September 29, 2009 ................ 389December 29, 2008 ................. 390October 10, 2008 ................... 390September 6, 2008 ................. 392July 10, 2008 ........................ 394June 9, 2008 ......................... 395EOD timing for Participants October 10, 2008 ................... 395May 30, 2008 ........................ 395Version Releases and Features July 16, 2010 ........................ 396July 2, 2010 .......................... 396June 25, 2010 ....................... 396June 24, 2010 ....................... 408April 8, 2010 ......................... 408March 27, 2010 ...................... 409October 1, 2009 ..................... 413September 14, 2009 ................ 414September 5, 2009 ................. 415June 17, 2009 ....................... 417June 1, 2009 ......................... 417February 27, 2009 .................. 417December 16, 2008 ................. 419September 1, 2008 ................. 422February 5, 2008 .................... 425October 5, 2007 ..................... 437PAN Import Utility to upload PAN details July 21, 2006 ........................ 446Software utilities for making queries in DPM system November 24, 2006 ................. 448October 16, 2006 ................... 450September 23, 2006 ................ 453Caution to be exercised while executing freezein Client accounts using Freeze Utilities December 20, 2006 ................. 454DPM Software - Modification only withprior permission of <strong>NSDL</strong> September 13, 1997 ................ 457Additional Software permitted on DPM System September 7, 2002 ................. 458March 8, 2002 ....................... 458DPM System - General operating instructions December 28, 1997 ................. 459[ xii ]
Subject Date(s) Page No.DPM system - Guidelines for monitoringhard-disk space August 13,1998 ...................... 463DPM system - Monitoring hard-disk failure July 29, 2002 ........................ 464May 18, 2001 ........................ 465DPM system - Monitoring messages &Releasing instructions June 22, 2002 ....................... 465DPM System - Reporting problem to <strong>NSDL</strong> Helpdesk December 15, 2009 ................. 467October 12, 1998 ................... 467DPM System - Upgrading DPM hardware-Prior permission of <strong>NSDL</strong> February 18, 1999 .................. 467DPM System - Security administration October 26, 2002 ................... 467May 31, 2000 ........................ 467DPM setup after upgradation -Checklist for Compliance April 10,2004 ........................ 468<strong>NSDL</strong> email server April 19,2004 ........................ 469Phasing out of CISCO Router 2500 series July 27, 2005 ........................ 470August 9,2004 ....................... 470Creation of Automated System Recoverybackup in Windows 2003 server October 10, 2008 ................... 470Backup on holidays & Penalty March 21,2002 ....................... 471January 6,1998 ...................... 471FAQs for backup June 5, 1998 ......................... 472DPM System - Backups December 7, 2009 .................. 476August 28, 2009 ..................... 477August 27, 2009 ..................... 477July 21, 2009 ........................ 477March 3,2003 ........................ 478May 13, 2002 ........................ 478August 31,1999 ...................... 478Anti-virus October 3,2002 ...................... 479FAQs on Anti-virus October 28,2002 .................... 481Disablement of User IDs that are not complyingto System Security Policy April 26, 2008 ....................... 483DPM Systems - Capacity planning and operationalguidelines for performance optimization January 29,1999 .................... 483DPM Capacity Enhancement - server configuration June 16, 2008 ....................... 485March 24, 2006 ...................... 485DPM System-Recommended hardware configuration November 6, 2002 .................. 490May 12, 2000 ........................ 491January 12,2000 .................... 492[ xiii ]
Low End DPM System - Recommended hardwareconfiguration February 21, 2003 .................. 493DPM Systems - Recommended hardwareconfiguration after implementing archival system November 28, 2000 ................. 493Upgradation of DPM Server operating system (OS)software from Windows 2000 server OS toWindows 2003 Server OS May 20, 2008 ........................ 494Change in Operating System for DPM Serverto Windows 2000 and changes inServer Configurations December 2, 2002 .................. 495July 18, 2002 ........................ 496November 6, 2001 .................. 497July 30, 2001 ........................ 497RENEWAL OF REGISTRATIONSubmitting Documents Or information to SEBI March 4, 2005 ....................... 501MUTUAL FUNDS July 20, 2010 ........................ 507July 16, 2010 ........................ 508July 7, 2010 .......................... 508July 1, 2010 .......................... 508❑ ❑ ❑
1. Account Openinga. GeneralSection 5Regulation 41Regulation 42 (1)Bye Law 6.4.1Bye Law 9.1.2Bye Law 9.1.5Bye Law 9.1.6Rule 12.1.2Any person, through a participant, may enter into an agreement, in suchform as may be specified by the bye-laws, with any depository for availing itsservices.Every participant shall enter into an agreement with a beneficial owner beforeacting as a participant on his behalf, in a manner specified by the depositoryin its bye-laws.Separate accounts shall be opened by every participant in the name of eachof the beneficial owners and the securities of each beneficial owner shall besegregated, and shall not be mixed up with the securities of other beneficialowners or with the participant's own securities.No Participant shall conduct business as a Participant with its Clients unless ithas entered into an agreement with its Clients.The Participant shall maintain separate accounts in respect of each Clientand its own account. The Participant shall intimate the balances held in itsown account and Client account to Depository on a daily basis.The Client will be required to enter into an agreement with the Participant inaccordance with the provisions of Chapter 6 of these Bye Laws.Once the application has been accepted by the Participant, the applicantwill be issued a Client account number.The Participant shall ensure that the application form submitted by the Clientis completely filled, including the Bank Account particulars of the Client, andproperly signed.Master circular on Account Opening version 2.6 was issued in July 2010. Circulars issued thereafterand other relevant circulars are listed belowCircular No:Sub: Mandatory requirement of 'In-person' verification of Clients<strong>NSDL</strong>/POLICY/Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2008/2010/0009 0030 dated April 30, 2008 wherein Participants were advised that 'in-person'Date: January 19, 2010 verification of Beneficial Owners at the time of account opening should becarried out by the Participant staff only.SEBI has now clarified vide its Circular No. SEBI/MIRSD/Cir. No. 02/2010 datedJanuary 18, 2010 (copy enclosed) that the 'in-person' verification done foropening Beneficial Owners account by a Participant will hold good for openingtrading account by a stock broker and vice versa, if the stock broker andParticipant is the same entity or if one of them is the holding or subsidiarycompany of the other.Participants are advised to take the note of the above and ensure compliance.[ 1 ]
General ManagerMarket Intermediaries Regulationand Supervision Department· IIEmail: sundaresanvs@sebi.gov.in1. The Managing Directors of Stock Exchanges2. Managing Directors and CEOs of DepositoriesSEBI/MIRSD/Cir. No. 02/2010January 18, 2010Dear Sir/sSub : Mandatory requiremtn of ‘In-person’ verification of clients1. Pursuant to SEBI letter F. No. 47-2006/ISD/SR/122539/2008 dated April 04, 2008 (addressed toDepositories) and SEBI letter NO.MIRSD/DPSIII/130466/2008 dated July 02, 2008 (addressed toStock Exchanges), SEBI has received requests and suggestions from various market participants onthe captioned subject.2. Accordingly, it is clarified that the ‘in person’ verification done for opening beneficial owner’saccount by a Depository Participant (DP) will hold good for opening trading account by a stockbroker and vice versa, if the stock broker and DP is the same entity or if one of them is theholding or subsidiary company of the other.3. Stock Exchanges & Depositories are advised to :(a) issue necessary instructions to bring the provisions of this Circular to the notice of theirconstituents and also disseminate the same on their websites;(b) make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above; and(c) communicate to SEBI, the status of the implementation of the provisions of this Circular byJanuary 31, 2010 .4. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities andExchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996, to protect theinterests of investors in securities and to promote the development of, and to regulate the securitiesmarket and shall come into effect from the date of this Circular.Circular No:Sub: RBI intimation - Updation of new bank account numbers<strong>NSDL</strong>/POLICY/Participants may be aware that Reserve Bank of India (RBI) has introduced a2009/0091 new variant of Electronic Clearing System (ECS) called National ElectronicDate: October 5, 2009 Clearing Services (NECS) which aims to centralize the ECS operation and bringin uniformity and efficiency to the system. RBI has informed that with effectfrom January 1, 2010 necessary validations will be built into the ECS/NECSprocess flow to ensure that instructions with old/legacy account numbers arerejected at the ECS centre level itself. RBI has advised member banksparticipating in ECS/NECS to initiate necessary steps to update the oldinformation pertaining to customer account numbers by December 31, 2009.In view of the aforesaid, Participants are advised to inform their Clients toprovide the new bank account numbers in case of change in the existing bankaccount numbers to ensure that instructions of ECS/NECS are not rejected onaccount of old/legacy account numbers. At the time of updation of new bankaccount details in the DPM system, Participants are advised to ensurecompliance with point no. (I) (2) (2.3) of <strong>NSDL</strong> Master Circular No. <strong>NSDL</strong>/POLICY/2009/0029 dated April 16, 2009 for capturing of Bank details.[ 2 ]
Circular No:Sub: Capturing of Indian Financial System Code (IFSC) in the depository<strong>NSDL</strong>/POLICY/account of the Client2009/0073 As Participants are aware, the activities related to distribution of dividends,Date: August 28, 2009 interest payments, IPO refunds etc., are carried out by the Issuers / R & TAgents. In this regard, <strong>NSDL</strong> has been providing to the Issuers / R & T Agentsa mapping file containing MICR code and IFSC of the depository accountholdersto facilitate them to process the payments through RTGS / NEFT.In light of the above, Participants are not currently required to undertakethe task of capturing the IFSC in the depository accounts.Circular No:Sub: SMS alert for depository accounts operated by Power of Attorney<strong>NSDL</strong>/POLICY/Further to Circular Nos. <strong>NSDL</strong>/POLICY/2009/0035 dated May 7, 2009, <strong>NSDL</strong>/2009/0060 POLICY/2009/0039 dated May 14, 2009 and <strong>NSDL</strong>/POLICY/2009/0041 datedDate: July 20, 2009 May 29, 2009, SEBI has clarified vide its letter no. SEBI/MRD/DEP/VM/169784/09 dated July 15, 2009 that SMS alert is mandatory for all depository accountsoperated through Power of Attorney except in case of accounts held by nonindividuals,foreign nationals and NRIs.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>officials on telephone numbers (022) 2499 4488 / 4494 / 4214 / 4348 (email:participant-interface@nsdl.co.in).Circular No:Sub: Amendment in Annexure JA to Business Rules.<strong>NSDL</strong>/POLICY/All Participants are hereby informed that minor modifications are carried out2009/0054 in the "Form for Nomination / Cancellation of Nomination" i.e. Annexure JADate: July 6, 2009 to Business Rules so as to incorporate certain details which are already a partof the nomination portion of the "Application for opening an account (forindividuals only)" i.e. Annexure J to Business Rules.The revised "Form for Nomination / Cancellation of Nomination" i.e. AnnexureJA is enclosed.ANNEXURE JAFORM FOR NOMINATION / CANCELLATION OF NOMINATION(To be filled in by individual applying singly or jointly)I/We _________________ and _______________ the holders of beneficiary owneraccount bearing Client Id No. ___________ held with M/s ___________________a <strong>NSDL</strong> Depository Participant bearing DP Id No; _________________ wish to*make a nomination / cancel the nomination dated ________ and dohereby *nominate / cancel the nomination made by me/ us on the ______ dayof _______ the following person in whom all rights of transfer and / oramount payable in respect of securities held in the Depository by me/ us inthe said beneficiary owner account shall vest in the event of my/our death/* and consequently all rights and liabilities in respect of beneficiary ownershipin the securities held by me/ us in the said account shall vest in me/us.(* strike out whichever is not applicable)Photograph of NomineeSignature of Nomineeacross PhotographPhotograph of Guardian(in case of minor)Signature of Guardianacross Photograph[ 3 ]
Name and Address of NomineeName: ....................................................................................Relationship with the Applicant (if any) : ...........................................Address: ..................................................................................Date of Birth* : ..........................................................................(to be furnished in case the Nominee is a minor)Signature of the Nominee : ..........................................................**The Nominee is a minor whose guardian is :Address of the Guardian ............................................................................................................................................................Signature of the guardian: ..................................(in case of guardian his photograph should be affixed) (to be deleted if notapplicable)Beneficial OwnerSr. No. Name Address Signature with date1.2.3.Signature of two WitnessesName and Address1.2.Signature with dateInstructions:1. The nomination can be made only by individuals holding beneficiaryowner accounts on their own behalf singly or jointly. Non- individualsincluding society, trust, body corporate, partnership firm, karta of HinduUndivided Family, holder of power of attorney cannot nominate. If theaccount is held jointly all joint holders will sign the nomination form.2. A minor can be nominated. In that event, the name and address of theGuardian of the minor nominee shall be provided by the beneficialowner.3. The Nominee shall not be a trust, society, body corporate, partnershipfirm, karta of Hindu Undivided Family or a power of Attorney holder. Anon-resident Indian can be a Nominee, subject to the exchange controlsin force, from time to time.4. Nomination in respect of the beneficiary owner account stands rescindedupon closure of the beneficiary owner account. Similarly, the nominationin respect of the securities shall stand terminated upon transfer of thesecurities.[ 4 ]
5. Transfer of securities in favour of a Nominee shall be valid discharge bythe depository against the legal heir.6. The cancellation of nomination can be made by individuals only holdingbeneficiary owner accounts on their own behalf singly or jointly by thesame persons who made the original nomination. Non- individualsincluding society, trust, body corporate, partnership firm, karta of HinduUndivided Family, holder of power of attorney cannot cancel thenomination. If the beneficiary owner account is held jointly, all jointholders will sign the cancellation form.7. On cancellation of the nomination, the nomination shall stand rescindedand the depository shall not be under any obligation to transfer thesecurities in favour of the Nominee.Sr.NoMaster Circular on Account Opening Version 2.6 May 2010Topic(I)Guidelines in respect of account opening in case of individuals (Non-Body Corporate)1 Individuals, Karta of HUF, Partners in case of Partnership firm, Guardian in case of minoraccount1.1 In-person verification of applicant(s) at the time of opening depository account1.2 Execution of agreement1.3 Submission of valid proof of identity / proof of address1.4 Collection of KYC documents in case of joint holdings1.5 Verification of Documents1.6 Exercising of due diligence1.7 Application of stricter criteria in selecting KYC documents1.8 Concurrent Audit with respect to account opening2 Procedure for capturing of demographic details of the account holder(s)2.1 Capturing of PAN details2.2 Capturing of local and correspondence address2.3 Capturing of Bank details3 Mode of capturing the details in the DPM System4 Procedure for opening HUF account5 Procedure for opening of a minor account5.1 Procedure to be followed by Participants on minor attaining majority6 Accounts opened in the names of Partners for holding securities that belong to a Partnershipfirm7 Non-Resident Indian / Foreign National (NRI/FN)7.1 KYC documentation and PAN for NRI and FN Clients7.2 Opening of NRI (Repatriable/Non- Repatriable) account7.3 Reserve Bank of India (RBI) Clarification with respect to NRI / FN8 Opening of account of an illiterate person9 Opening of an account of a Blind person10 Procedure to be followed with respect to Nomination11 Procedure for change in demographic details11.1 Change of address11.2 Change of Signature11.3 Change in status of Standing Instruction11.4 Change in bank details such as account type, account number, name, address and MICR11.5 Change in SMS flag and/or mobile numbers11.6 Addition / Deletion / Modification of Power of Attorney holder(s)11.7 Make a nomination / Cancel the Nomination[ 5 ]
(II) Guidelines in respect of account opening in case of Body-Corporate1 Procedure for opening account of a Body-Corporate1.1 Documents to be obtained at the time of opening depository account1.2 Verification of documents1.3 Verification of PAN, address and bank details2 Additional requirement with respect to Foreign Corporate Bodies3 Other Types of Body Corporate Accounts3.1 Opening of an Escrow Account3.2 Procedure for opening depository account for unclaimed shares of listed companies4 Procedure for opening depository account for Limited Liability Partnership (LLP)5 Procedure for change in demographic details5.1 Change of address5.2 Change of authorised signatory5.3 Change in status of standing instruction5.4 Change in bank details such as account type, account number, name, address and MICR5.5 Addition / Deletion / Modification of Power of Attorney holder(s)6 Change in name of Body-Corporate Accounts(III) Depository accounts opened in the capacity of Individual/Body Corporate as applicable1 Opening of depository accounts in case of Trusts such as Provident Fund trusts, Gratuitytrusts, Superannuation trusts etc.2 Opening of promoter account3 Opening of DR account4 Opening of a Commodity Account5 Procedure regarding operation of account through Power of Attorney5.1 Sample Clause5.2 General points regarding Power of Attorney5.3 Review of Power of Attorney document(IV) Procedure for opening and shifting/closing of Clearing Member (CM) Account1 Opening of CM Account1.1 Shifting/Closure of CM Account1.2 Procedure for change of name of CM account2 Opening of Margin Account(V)(I)FAQs related to Account openingAnnexure IGuidelines in respect of account opening in case of individuals (Non-Body Corporates)(1) Individuals, Karta of HUF, Partners in case of Partnership firm, Guardian in case of minoraccount(1.1) In-person verification of applicant(s) at the time of opening depository account(<strong>NSDL</strong>/POLICY/2007/0016 dated March 16, 2007, <strong>NSDL</strong>/POLICY/2008/0030 datedApril 30, 2008 <strong>NSDL</strong>/POLICY/2008/0076 dated October 27, 2008 & <strong>NSDL</strong>/POLICY/2010/0013 dated February 6, 2010)(a) At the time of opening depository accounts, the staff of the Participant shouldestablish the identity of the applicant(s) (including guardian in case of minoraccount) by verifying the photograph(s) affixed in the account opening form(Annexure J) as well as proof of identity document(s) as mentioned below inpoint no.(I)(1)(1.3), with the person concerned. Further, in case of joint accounts,‘in-person’ verification needs to be carried out for all the holders of the account.(b) The staff of the Participant only should carry out ‘in-person’ verification. TheParticipant should not outsource or assign the activity of ‘in-person’ verificationto an outside agency.[ 6 ]
(c) Upon the applicant(s) submitting the account opening form, proof of identity &address documents and PAN details, staff of the Participant should follow theprocedure as given below:(i) Verify the identity of the applicant(s) as clarified in point no.(I) (1) (1.1)(a) above.(ii) After due verification, affix a stamp on the face of the account openingform or on the document(s) collected as proof of identity to the effectthat the identity of the applicant(s) is verified ‘in-person’.The stamp should carry the following details: Name of the Participant and Participant ID, Name / Details of Branch/Service Centre, Details of the Participant staff who has carried out ‘in-person’verification (Name, Employee code if any, Signature), Date and place where ‘in-person’ verification was carried out.(iii) If ‘in-person’ verification is done through web camera, then mention “IPVthrough webcam”.(d) The ‘in-person’ verification done for opening trading account by a stock brokerwill hold good for opening depository account by a Participant, if the stock brokerand Participant is the same entity or if one of them is the holding or subsidiarycompany of the other. In case ‘in-person’ verification done for opening tradingaccount by stock broker is used for opening depository account, Participant mustensure that the details of ‘in-person’ verification as is required to be maintainedby stock broker under stock exchange regulations are available with appropriatecross-referencing (i.e. mention trading account number on depository accountopening form or on proof of identity at the place for ‘in-person’ verification).(e) If the Participant wishes to keep the above records mentioned in point (I) (1) 1.1(c) (ii) (i.e. verification details) in an electronic form, prior approval from <strong>NSDL</strong>should be obtained as per the <strong>NSDL</strong> Business Rule 16.4.1. Further, the Participantshould ensure that the records are made available to <strong>NSDL</strong> officials, SEBI or anyother Statutory Authority, whenever required.(f) Participants can stamp or print the ‘in-person’ verification details on the accountopening form (Annexure J). Such details may be stamped or printed on any page,as the Participant may deem fit without making illegible the other detailsmentioned in the account opening form. However, attachment of separate sheetto the account opening form or affixing stickers on the account opening formcarrying ‘in-person’ verification details will not be permitted. (<strong>NSDL</strong>/POLICY/2007/0022 dated April 18, 2007).(g) Participants may use ‘web-camera’ for carrying out ‘in-person’ verification foropening of depository accounts at the branch/franchisee offices of the Participantsubject to compliance with other SEBI guidelines/circulars relating to opening ofdepository accounts including verification of documents.(1.2) The applicant should fill up the Account Opening Form as per the format given in AnnexureJ of the Business Rules of <strong>NSDL</strong> and submit the same to the Participant alongwith theagreement (as per Annexure B of <strong>NSDL</strong> Bye Laws) duly executed on a stamp paper ofappropriate value. Further, the Participant shall be responsible in deciding the value ofthe stamp paper. The schedule of fees to be charged by the Participant to the Clientshould form a part of the agreement.(1.3) The applicant should submit any one of the following as a valid proof of identity / proofof address alongwith a photocopy (<strong>NSDL</strong>/PI/2004/1622 dated September 7, 2004):[ 7 ]
(a) Proof of Identity (POI):I. PassportII. Voter ID CardIII. Driving licenseIV. PAN card with photographV. Identity card/document with applicant’s Photo, issued bya) Central/State Government and its Departments,b) Statutory/Regulatory Authorities,c) Public Sector Undertakings,d) Scheduled Commercial Banks,e) Public Financial Institutions,f) Colleges affiliated to Universities (this can be treated as valid onlytill the time the applicant is a student),g) Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., totheir Members andh) Credit cards/Debit cards issued by Banks.(b) Proof of Address:I. Ration cardII. PassportIII. Voter ID CardIV. Driving licenseV. Bank passbook / Bank Statement (<strong>NSDL</strong>/POLICY/2007/0074 dated December1, 2007 and <strong>NSDL</strong>/POLICY/2008/0037 dated May 27, 2008)VI. Verified copies ofa) Electricity bills (not more than two months old),b) Residence Telephone bills (not more than two months old) andc) Leave and License agreement / Agreement for saleVII. Self-declaration by High Court & Supreme Court judges, giving the newaddress in respect of their own accounts.VIII. Identity card/document with address, issued bya) Central/State Government and its Departments,b) Statutory/Regulatory Authorities,c) Public Sector Undertakings,d) Scheduled Commercial Banks,e) Public Financial Institutions,f) Colleges affiliated to Universities (this can be treated as valid only tillthe time the applicant is a student) andg) Professional Bodies such as ICAI, ICWAI, Bar Council etc., to their Members.(1.4) In case of joint holdings, POI and Proof of address documents must be collected inrespect of all the account holders.(1.5) An authorised official of the Participant should verify the photocopies of documentssubmitted with their corresponding originals and put his/her signature on them withremarks “verified with original” before proceeding to open the account.(1.6) The aforesaid documents are the minimum requirement for opening of a beneficiaryaccount. Participants are advised to exercise due diligence while establishing identityof the person to ensure the safety and integrity of the depository system.(1.7) Participants can apply stricter criteria and accordingly, decide to accept selected[ 8 ]
documents out of the list of documents prescribed above (point no. (I) (1) (1.3)), as POIand Proof of Address (<strong>NSDL</strong>/PI/2004/2117 dated November 25, 2004).(1.8) 100% verification needs to be carried out in respect of account opening by the ConcurrentAuditor of the Participant. The Concurrent Auditor should conduct the audit in respectof all accounts opened during the day, by the next working day. In case the audit couldnot be completed within the next working day due to large volume, the auditor shouldensure that the audit is completed within a week’s time. Participants would be requiredto appoint a firm of qualified Chartered Accountant(s) or Company Secretary(ies) or aCost and Management Accountant, holding a certificate of practice for conducting theconcurrent audit. Participants in case they so desire, may entrust the Concurrent Auditto their Internal Auditors. (<strong>NSDL</strong>/POLICY/2006/0021 dated June 24, 2006, <strong>NSDL</strong>/POLICY/2007/0017 dated March 22, 2007 and <strong>NSDL</strong>/POLICY/2009/0020 dated March 16, 2009).(2) Procedure for capturing of demographic details of the account holder(s)(2.1) Capturing of PAN details (<strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006 and <strong>NSDL</strong>/POLICY/2006/0031 dated August 9, 2006):(i) Participants should obtain a photocopy of the PAN card of the person(s) seekingto open the account and verify the same with the original PAN card.(ii) Further, the name of depository account holder(s) should be compared with thename appearing on the website of the Income Tax Department (ITD) i.e. https://incometaxindiaefiling.gov.in/knowpan/knowpan.do. Alternatively, subscribe tothe internet based service of <strong>NSDL</strong> (<strong>NSDL</strong>/POLICY/2007/0048 dated August 14,2007) so that the name can be sought against the given PAN.(iii) In case the name(s) do not match or the PAN is not present in the Income Taxdatabase, Participants should seek necessary clarification from the accountholder(s) and activate such accounts in the DPM System only after the discrepancyis resolved.(iv) In case of joint accounts, the PAN of each of the joint holder should be capturedin the DPM System after making verification as explained above. As all Participantsare aware, DPM System is enabled to capture PAN of all joint holder(s) of adepository account.(v) After verifying the details of PAN as mentioned above, the staff of the Participantshould affix a stamp as ‘PAN verified’, on the photocopy of the PAN card(s).(vi) Thereafter, PAN flag(s) should be enabled in the DPM System (<strong>NSDL</strong>/POLICY/2006/0012 dated March 25, 2006).(2.1.1) With respect to PAN, Clients may have reported the following problems: :(a) PAN card has been lost / misplaced or PAN card was never received but has thePAN allotment letter from the ITD;(b) Change in the name of the Client due to marriage or voluntary action etc., (incase of individuals) or due to merger, amalgamation etc. (in case of a corporateentity).In this regard, Participants are advised that the ITD issues a new PAN card withthe same PAN with changes in PAN data, for the above reported problems. Fordetailed procedure, Participants may refer http://www.incometaxindia.gov.inor http://www.tin-nsdl.com (<strong>NSDL</strong>/POLICY/2006/0024 dated July 7, 2006).In cases where there is minor mis-match in the name of Client as is mentioned inthe account opening form and the name displayed on the ITD website, theParticipants can collect the PAN card proof as submitted by the account holder.However, this would be subject to the Participants verifying the veracity of theclaim of such Clients by collecting sufficient documentary evidence in support ofthe identity of the investors as provided in the SEBI Circular No. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 (Refer point no. (I)(1)(1.3) above for list of[ 9 ]
documents which can be accepted as a valid proof of identity). The Participantshould call for any additional documents and / or clarification to ascertain andsatisfy itself about the identity of the entity.(2.1.2) Participants are restricted from modifying the PAN of a holder in a Client account inDPM System, once the PAN flag has been enabled. However, Participant may approach<strong>NSDL</strong> for modifying the PAN or PAN flag and <strong>NSDL</strong> will provide a facility for Participantsto register a request for modification of PAN for such holders in Client account (<strong>NSDL</strong>/POLICY/2007/0052 dated September 13, 2007).(2.1.3) Participants may note that PAN may not be insisted in the case of Central Government,State Government and the officials appointed by the courts e.g. Official liquidator,Court receiver etc. (under the category of Government) for transacting in the securitiesmarket on behalf of the Central and State Government. Further, SEBI has clarified thatthe exemption from mandatory PAN requirement applies to transactions undertaken onbehalf of the Central and State Government, but not to the transactions of the employeesof Central and State Government in their personal capacity. (SEBI Circular No. MRD/DoP/Cir-20/2008 dated June 30, 2008 and <strong>NSDL</strong> Circular Nos. <strong>NSDL</strong>/POLICY/2008/0048dated June 30, 2008 & <strong>NSDL</strong>/POLICY/2008/0049 dated July 8, 2008).(2.2) Capturing of local and correspondence address (<strong>NSDL</strong>/PI/2005/1102 dated June 22,2005 & <strong>NSDL</strong>/POLICY/2008/0040 dated June 4, 2008)(a) Participants can capture two addresses in the DPM System for a Client (firstholder/sole holder) i.e. local and correspondence addresses. The Client MasterReport and Export will carry both these addresses.(b) For both, local and correspondence addresses of a Client, Participants shouldensure that they collect and verify the KYC documents as mentioned in pointnos. (I) (1) (1.3) (Individual) and (II) (1) (1.1) (Body-Corporate) and only then thesame should be captured in the DPM System.(c) The local address would be the default address that would be forwarded to theRegistrar & Transfer Agent (RTA) as well as used for printing Transaction Statement(SOT) from DPM System. However, the Client has the option to request theParticipant to use the other address i.e. correspondence address for the aforesaidpurposes. In such a situation, the Participant should disable the default indicatorunder the option “Beneficiary Address Local” (referred to as ‘Address PreferenceFlag’ in batch file import format).(d) Participants may capture the landmark details in the DPM System, which are notmentioned in the proof of address submitted by the Client but are mentioned byClient in the account opening form. The landmark details could include detailslike name of the building / mall / junction / school / garden / hotel / bank /railway station / company name / bus depot etc with the preceding words suchas ‘near by’, ‘adjacent to’, ‘behind’, ‘next to’, ‘opposite to’, ‘off’ etc.(2.3) Capturing of Bank details (<strong>NSDL</strong>/PI/2000/2295 dated December 20, 2000):Complete bank address including 9-digit MICR code is necessary for the Issuers toundertake distribution of corporate benefits directly to the bank accounts of beneficialowners. Participants are hereby advised to obtain a specimen copy of cheque and capture9-digit MICR codes for all the accounts opened with them. Further, Participants areadvised to capture bank address details strictly in the manner described below:Row 1 :Building / Tower / Apartment / Palace / Chamber / MansionRow 2 :Street / Road / Marg / Lane / Avenue / RastaRow 3 :Area nameRow 4 :City namePin code : Bank address PIN code[ 10 ]
(3) Mode of capturing the details in the DPM System(a) The Participant should enter the details of the Client as mentioned in the AccountOpening Form, in the DPM System after verifying with the POI and Proof of Address. Itmay be mentioned that Participants can avail the facility of Bulk Verify and Releasewith respect to opening of Client accounts in the DPM System (<strong>NSDL</strong>/PI/2007/0019dated April 4, 2007).(b) The Participant should capture the Client’s signature(s) as given in the Account OpeningForm in the DPM System.(c) For ease of data entry, the Standing Instruction indicator in the DPM System would be inan enabled status with respect to all types of Client accounts except for accounts withsub-type “DR” at the time of opening depository accounts. For those Clients who havenot opted for Standing Instructions, the Participant should disable the Standing Instructionindicator in the DPM System.(d) For ease of data entry, the SMS flag of the account holder will automatically get enabledin the DPM System after the Participant captures the mobile number (Participants areadvised to strictly capture the ten digit mobile number with the first digit as “6” / “7”/ “8” / “9”) of the respective account holders at the time of opening of depositoryaccounts. If the Client submits the mobile number but does not wish to opt for the SMSAlert facility, the Participant should capture the mobile number in the DPM System anddisable the SMS flag either from the front end of the DPM System or through back officefile import (<strong>NSDL</strong>/POLICY/2008/0059 dated September 1, 2008 & Circular No.: <strong>NSDL</strong>/POLICY/2010/0010 dated January 28, 2010).(e) The Participant should save the details and enter the Client account number (Client ID)generated by DPM System in the Account Opening Form.(f) The Participant should print the Client Master Report and give it to the Client alongwitha copy of the Agreement. Such information should be provided only after the account isin “Active” status in the DPM System. (<strong>NSDL</strong>/PI/98/583 dated November 18, 1998).(4) Procedure for opening HUF account(a) Open the beneficiary account in the name of the Karta of the HUF. The HUF accountshould not have joint holdings (<strong>NSDL</strong>/PI/2002/1346 dated August 12, 2002).(b) POI and Proof of Address of ‘Karta’ should be obtained as mentioned in point no. (I) (1)(1.3).(c) PAN details of the HUF should be captured in the DPM System after due verification(<strong>NSDL</strong>/POLICY/2006/0031 dated August 9, 2006).(d) Since Clients are required to open HUF (depository) accounts in the name of ‘Karta’,they may face difficulty in encashing cheques / demand drafts in respect of dividend /interest warrant, since the bank account may have been opened in the name of HUF.For this purpose, RBI has clarified that a mandate may be taken by banks from theaccountholder that the cheques drawn in favour of ‘Karta’ can also be collected in theaccount of HUF and vice-versa. Participants are advised to take note of the above andprovide a copy of ‘Client Master Report’ so as to enable the Clients to suitably take upthe matter with their banks. A copy of the letter received from RBI, clarifying the standto be taken with respect to bank account that is opened in the name of HUF may beprovided at the request of the Client’s bank (<strong>NSDL</strong>/PI/2005/0159 dated January 27,2005 and <strong>NSDL</strong>/POLICY/2007/0064 dated October 19, 2007).(5) Procedure for opening of a minor accountSEBI has intimated to <strong>NSDL</strong> clarifying the position on operation of the depository accounts heldin the name of minors as follows:“Under [The] Hindu Minority and Guardianship Act, 1956, permission of court is required inthe case of transfer by a natural guardian of immovable property of a minor. However, shares[ 11 ]
are not immovable property. Section 2(7) of Sale of Goods Act, 1930 includes shares within thedefinition of “goods”. Neither the Indian Contract Act nor the Sale of Goods Act provide fortransfer by sale or otherwise by guardian/natural guardian of goods/movable property in thename of minor to the effect that permission of court is required in the matter of such transfer.In the case of accounts of minor in banks also, the guardian is entitled to open, operate andeven close the account also. The depository account can, therefore, be operated by a naturalguardian without any order from the court though the same is neither expressly permitted norprohibited.” (<strong>NSDL</strong>/PI/2000/323 dated March 17, 2000)Participants should follow the below given procedure for opening depository account of aminor: (<strong>NSDL</strong>/POLICY/2007/0004 dated January 11, 2007, <strong>NSDL</strong>/POLICY/2009/0015 datedFebruary 27, 2009 and <strong>NSDL</strong>/POLICY/2010/0051 dated May 13, 2010)(i) Account opened in the name of minor should not have joint holdings.(ii) Obtain POI, Proof of Address and the photograph of the Guardian as per the procedurelaid down in point no. (I) (1) (1.3) above.(iii) Photocopy of school leaving certificate / Marksheet issued by Higher Secondary Boardof respective states, ICSE, CBSE / passport of the minor / birth certificate of the minorto ascertain the date of birth of the minor. At the time of accepting either of thesedocuments, Participant should verify the same with the original. However, in case theclient submits an original birth certificate, Participant can accept the same as proof ofdate of birth.(iv) PAN details of the minor should be captured in the DPM System after due verification.(<strong>NSDL</strong>/POLICY/2006/0031 dated August 9, 2006)(5.1) Procedure to be followed by Participants on minor attaining majority (<strong>NSDL</strong>/POLICY/2008/0034 dated May 21, 2008).On minor attaining majority (i.e. 21 years of age in case of minor whose Guardian is courtappointedor 18 years where minor’s account is represented by a natural guardian), Participantsshould follow the procedure given hereunder:S. No. ProcedureReference Remark(i) Ascertain the cases whereMinors have attained Majority.Access the module ‘Reports’ /Master List / Minor turnedAdult available in the DPMSystemReport displays accounts thatare in status ‘Active’,‘Suspended for Debit’ and‘Suspended for Debit & Credit’(ii)Communicate to the Client(Minor attained Majority)immediately advising him/herto submit a fresh accountopening form alongwithnecessary KYC documents &PAN card alongwith photographof the Client and also complywith ‘in-person’ verification.Point no. (I) (1) of this Circularand Annexure J of BusinessRulesIncome Tax Department (ITD)issues a new PAN card withsame PAN with relevantchanges on PAN card, on Minorattaining majority. Fordetailed procedure,Participants may refer http://www.incometaxindia.gov.inor http://www.tin-nsdl.com.(iii) Suspend the account for debitand disable the standingDPM System. This is in case where the Clientdoes not respond within oneinstruction for creditmonth from the date ofpertaining to the account ofMinor.communication as mentionedin point no. (ii) above.[ 12 ]
S. No. ProcedureReference Remark(iv) Verify the account openingform alongwith necessary KYCPoint nos. (I) (1) and (2) (2.1)of this Circular and Circular no.documents and PAN as <strong>NSDL</strong>/OLICY/2008/ 0030 datedmentioned under point no.(ii) April 30, 2008.herein above.(v)Execute a fresh Participant-Client agreement with theClient.Annexure B of the Bye Laws of<strong>NSDL</strong>.Retain the KYC documents ofGuardian alongwith Participant– Client agreement executedearlier at the time of accountopening by the Guardian onbehalf of the Client as a partof account openingdocuments.(vi)Capture the new demographicdetails in the DPM System afterdue verification of same.Point no. (I) (11) of thisCircularEnsure that the demographicdetails captured in the DPMSystem match with the detailsin the new account openingform, KYC documents and PANcard submitted by the Client.If there is mismatch in thedemographic details capturedin the DPM System or if Clientsubmits a request formodification of such detailslike change of Bank details,address details, etc. follow therelevant procedure.(vii)Capture the signature of theClient (Minor turned Major) inthe system in place of thesignature of the Guardian(captured earlier).DPM System(viii)Select “None” or “Nominee” asthe case may be in the field‘Nominee/Guardian’ in theDPM System to disable theentire Guardian details in thesaid account. If “Nominee” isselected enter the nominationdetails.Point nos. (I) (10) of thisCircular and Annexure JA ofBusiness RulesSelect the option after theaforesaid procedure asmentioned in aforesaid pointsis followed and the identity ofthe Client is verified. As theClient has become Major, he/she can now make anomination in his/her accountin favour of any person by filingwith the Participant a requestfor making a nomination inprescribed form.[ 13 ]
S. No. ProcedureReference Remark(ix)Any request or instruction(s)from the guardian, which is/are to be processed or is havingexecution date falling on orafter the date the Minor hasturned Major, shall beprocessed/executed only afterreceipt of confirmation fromthe Client (Minor turnedMajor).As Clients who have attainedMajority are legally entitled toexecute a contract,Participants are advised NOTto accept any requests orinstructions signed by theGuardian on behalf of theClient on or after the date theClient has turned Major.(x)Client (Minor turned major) account is suspended for debit for non-compliance with PANrequirementFollow the procedurementioned in point nos. (i) to(viii) above and capture thePAN details in the DPM Systemand enable the PAN flag.Point no. (I) (2) (2.1) of thisCircular(xi)Accounts already suspended in cases where Clients have not respondedFollow the procedure asmentioned under point no. (ii)to (viii) above.Point no. (I) (5), (5.1) and (5.2)of this CircularThis is in cases where theaccounts pertaining to MinorClients are suspended for debitand the standing instructionfor credit is disabled onaccount of failure of theClients to respond within theperiod of one month from thedate of communication toClient from Participants.(6) Accounts opened in the names of Partners for holding securities that belong to a Partnershipfirm (<strong>NSDL</strong>/POLICY/2007/0009 dated February 12, 2007)(i) The account should be opened only in the names of Partners and the securities thatbelong to the Partnership Firm can be held in this account.(ii) Obtain POI and Proof of Address of the Partners as per the documents mentioned inpoint no. (I) (1) (1.3). Further, obtain a copy of the Partnership Deed to verify thenames of Partners.(iii) Obtain an undertaking in the prescribed format from the Partners to the effect that thePartners would comply with the provisions of the Companies Act, 1956 and otherapplicable statutes in respect of securities of the Partnership firm held in the accountopened in the names of the Partners (<strong>NSDL</strong>/POLICY/2006/0008 dated March 4, 2006).(iv) PAN details of the Partnership firm should be captured against the names of all thePartners after due verification (<strong>NSDL</strong>/POLICY/2006/0031 dated August 9, 2006).(v) Capture the bank details of the Partnership firm.[ 14 ]
(7) Non-Resident Indian / Foreign National (NRI/FN)(7.1) Procedure to be followed by Participants with respect to KYC documents and PAN ofNRI (Repatriable/Non-Repatriable) and FN at the time of opening an account in therespective category:(i) Obtain POI and Proof of Address of the applicant as per the procedure laid downin point no. (I) (1) (1.3) above.(ii) Obtain a declaration from the Client that he/she has complied and will continueto comply with FEMA regulations.(iii) Participants are advised to obtain photocopies of Proof of Address in respect offoreign address where the NRI/FN is residing and verify the same with originals.In case the NRI/FN Clients have Indian address, Participants are advised to obtainphotocopies of Proof of local address and verify the same with originals. Further,in case if the NRI/FN has submitted only Proof of Address of the country (foreignaddress) where the NRI/FN is residing, in such a situation, Participants may capturethe foreign address in both local and foreign address fields given in the DPMSystem.(iv) If Participants find it infeasible to carry out ‘in-person’ verification of the NRI/FN Client by their staff and/or verify the original KYC documents (POI and Proofof Address i.e. foreign address, where the NRI/ FN is residing) alongwith PANcard, in such a situation, it is clarified that:(a) the account opening form and photocopies of the KYC documents and PANcard should be duly signed by the account holder; and(b) photocopies of the KYC documents and PAN card is attested by any of theentities viz; Notary Public, Court, Magistrate, Judge, Local Banker, IndianEmbassy / Consulate General of the country where NRI/FN is residing[outside India]; and(c) the attestation is to the effect that it has been verified with the originals.Participants should open the depository accounts or accept the PAN cardonly after it is satisfied with the authenticity of the documents (POI,Proof of Address and PAN card).(v) In case where ‘in-person’ verification for NRI/FN Client has been carried out bythe staff of the Participant or if he/she personally visits the office of the Participantto submit the KYC documents and PAN card, in such a situation, the NRI/FNwould be exempted from obtaining attestation, on KYC documents and PAN card.(<strong>NSDL</strong>/POLICY/2008/0030 dated April 30, 2008, <strong>NSDL</strong>/POLICY/2007/0022 datedApril 18, 2007, <strong>NSDL</strong>/POLICY/2006/0067 dated December 28, 2006 and <strong>NSDL</strong>/POLICY/2006/0049 dated October 19, 2006).(7.2) NRI (Repatriable/Non- Repatriable) account (<strong>NSDL</strong>/PI/98/007 dated January 2, 1998):(i) While opening an account for an NRI Client, the Participant should obtain copy ofthe RBI approval letter, if any, for acquiring securities, alongwith the accountopening form and other necessary documents.(ii) The account should be opened in the name of the NRI in the DPM System underrepatriable category when securities are held on repatriable basis and undernon-repatriable category when securities are held on non-repatriatable basis.(iii) Participants are advised to capture the following details in the DPM System againstthe RBI reference number and date :(a) If the NRI has at any time purchased securities from the secondary market,i.e., under Portfolio Investment Scheme, then the RBI reference numberand date mentioned in the RBI approval letter should be entered.[ 15 ]
(b) If the NRI has never purchased securities from the secondary market, butthe securities have been allotted in the primary market, i.e., under DirectInvestment Scheme, then the Participant should mention the following :RBI Reference No. : “Under General Permission”RBI Approval Date : Present date(Subsequently, whenever the NRI gives dematerialisation or receiptinstructions in respect of purchase of securities from the secondary market,the RBI reference number and date should be entered therein)(c) If the NRI does not hold any securities, then the Participant should mentionthe following :RBI Reference No. : “No Holdings”RBI Approval Date : Present date(Subsequently, whenever the NRI gives dematerialisation or receiptinstructions in respect of purchase of securities from the secondary market,the RBI reference number and date should be entered therein)(iv) While processing dematerialisation, receipt, delivery or pledge instructions fromNRI Client, the Participant must obtain a copy of the relevant RBI approval letter(e.g., RBI approval letter for sale in case of delivery instructions). The Participantneed not obtain copy of the RBI approval letter for every instruction, if the sameapproval applies to each such instruction.(7.3) RBI Clarification with respect to NRI/FN :(<strong>NSDL</strong>/PI/2000/1891 dated October 6, 2000)RBI vide its letter dated July 18, 2000 to one of the Participant of <strong>NSDL</strong> has issued the followingclarifications with regard to permission to open Bank Account and Depository Account to sellshares acquired under ESOP by FN:(a) RBI approval is not required for opening depository account.(b) RBI has not put any condition that for opening of depository account, the non-residentshareholder must have a bank account. The depository account may be opened as perthe norms of <strong>NSDL</strong> and the concerned bank.(c) RBI has already granted General Permission for sale of shares on stock exchanges bynon-residents and for sale of shares by negotiated deals, application in TS-1 form maybe submitted to concerned Regional Office of RBI for obtaining permission.(d) FN can sell the shares held under ESOP on stock exchange without RBI permissionParticipants are required to ensure that all transactions in the account are in compliance withFEMA regulations. Accordingly, Participants are advised to obtain from the NRI/FN, necessarydocuments evidensing general/specific approvals as may be required under FEMA regulations.(8) Opening of account of an Illiterate person (<strong>NSDL</strong>/PI/2002/0709 dated May 3, 2002):<strong>NSDL</strong> has prescribed the procedure for affixing thumb impression (in Annexure J of BusinessRules) while filling an account opening form by an illiterate person. In this context, Participantsare advised to follow the below mentioned procedure:(a) Illiterate person(s), at the time of opening an account with a Participant must affix thethumb impression (left hand thumb in case of a male and right hand thumb in case of afemale) on the agreement as well as on the account opening form.(b) All accounts opened by illiterate person(s) (hereinafter referred as Clients) must beeither introduced by an existing account holder or must be attested by applicant’sbank.(c) The Client(s) must come in person to open the account and submit instruction formsand affix his/her thumb impression in the presence of the official of the Participant.[ 16 ]
The Participant should identify the Client(s) by verifying the photograph submitted bythe Client(s) and read out/explain the contents of the account opening form, Participant-Client agreement and delivery instruction form to the Client(s). The official of theParticipant should then put his signature and remarks “Details explained to the Client(s)”,on the account opening form, copy of the agreement and delivery instruction form.(d) In case such Client(s) is/are temporarily or permanently disabled due to which he/shecannot come in person to submit the instruction form as mentioned in point (c) above,the thumb impression of the Client(s) on the instruction forms must be attested by aMagistrate or a Notary Public or a Special Executive Magistrate or a similar authorityholding a Public Office and authorised to use the Seal of his office or a manager of theaccount holder’s bank. The Client should also produce a medical certificate about his/her disability.(e) A remark should be put in the DPM System (under the authorised signatory details under“Signatories” screen) at the time of opening the account that the account holder isilliterate or disabled. Further, the instruction forms issued to such Client(s) should bepre-stamped as “Thumb Impression”.(f) At the time of opening of account, the aforesaid rules should be explained to theClient(s) in the presence of a witness, who will have to sign the agreement and theaccount opening form, as a witness.Participants should note that the aforesaid guidelines are in addition to the existing guidelineswith regard to opening of an account and executing instructions.(9) Opening of an account of a Blind person (<strong>NSDL</strong>/POLICY/2007/0049 dated August 21, 2007):(a) Obtain POI, Proof of Address and the photograph of the blind person(s) (hereinafterreferred as Client) as per the procedure laid down in point no. (I) (1) (1.3). Carry-out‘in-person’ verification of the Client as per the procedure laid down in point no. (I) (1)(1.1). Obtain PAN card of the Client and follow the procedure laid down in point no. (I)(2) (2.1).(b) The Participant should read out and explain to the Client, the contents of the accountopening form and Participant-Client agreement whenever so requested by the Clients.In case the Client is an illiterate, Participant should follow the procedure laid down inpoint no. (I) (8).(c) The Participant should capture the Client’s signature(s) as given in the Account OpeningForm in the DPM System. Further, a remark should be put in the DPM System (under theauthorised signatory details in ‘signatories’ screen) that the Client is “VisuallyChallenged”. Further, if the Client is illiterate, then Participant should put in the remarkas “Visually Challenged and Thumb Impression”.(d) For issuance, re-issuance and processing of Delivery Instruction Slips (DIS) of such Clients,Participants are advised to follow the procedure laid down in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/PI/2004/1401 dated August 5, 2004. Participants would also be required to comply with<strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0011 dated February 15, 2007 regarding SEBIcircular on DIS. It is also added that the DIS issued to such Clients should be prestampedas “Visually Challenged” or “Visually Challenged and Thumb Impression” asthe case may be. Further, these Client(s) should visit the office of the Participant todeliver the DIS, only if they are illiterate.Participants are requested to note that the above mentioned procedures will beapplicable for new accounts opened since August 21, 2007 (issuance of the revisedcircular) as well as for processing of DIS for the existing Clients.(10) Procedure to be followed with respect to Nomination (<strong>NSDL</strong>/POLICY/2009/0002 datedJanuary 3, 2009, <strong>NSDL</strong>/POLICY/2009/0004 dated January 9, 2009 and <strong>NSDL</strong>/POLICY/2009/0081 dated September 5, 2009):(a) At the time of opening his/their account, the Client will be required to tick the[ 17 ]
appropriate option as given below:(i) “I/We wish to make a nomination and do hereby nominate the following personin whom all rights and / or amount payable in respect of securities held in theDepository by me / us in the said beneficiary owner account shall vest in theevent of my / our death.”(ii) “I/We do not wish to make a nomination.”(b) For Client(s) who make a nomination of his/their account in favour of any person, may,fill-up with the relevant Participant the form laid out in Annexure JA of the BusinessRules. In the case of joint accounts, all the account holders shall be required to affixtheir signatures to the said form. Such nomination shall be conclusive evidence of theClient(s) disposition in respect of all the securities in the account for which nominationhas been made.(c) The nomination can be made only by individuals holding beneficiary accounts on theirown behalf singly or jointly. Non-individuals including society, trust, body corporate,partnership firm, karta of HUF, holder of power of attorney cannot nominate. If theaccount is held jointly, all joint holders will sign the nomination form.(d) A minor cannot nominate. However, a minor can be a ‘nominee’. In that event, thename and address of the Guardian of the minor nominee shall be provided by thebeneficiary owner. The details with respect to date of birth of the minor nominee andthe flag to indicate such nominee should be captured in the DPM System (<strong>NSDL</strong>/PI/2005/1102 dated June 22, 2005).(e) The Nominee shall not be a trust, society, body corporate, partnership firm, karta ofHUF or a power of attorney holder. A non-resident Indian can be a Nominee, subject tothe exchange controls in force, from time to time.(f) Nomination in respect of the beneficiary account stands rescinded upon closure of thebeneficiary account. Similarly, the nomination in respect of the securities shall standterminated upon transfer of the securities.(g) Transfer of securities in favour of a Nominee shall be valid discharge by the depositoryagainst the legal heir.(h) The cancellation of nomination can be made by individuals only holding beneficiaryaccounts on their own behalf singly or jointly by the same persons who made the originalnomination. Non-individuals including society, trust, body corporate, partnership firm,karta of HUF, holder of power of attorney cannot cancel the nomination. If the beneficiaryaccount is held jointly, all joint holders will sign the cancellation form.(i) On cancellation of the nomination, the nomination shall stand rescinded and thedepository shall not be under any obligation to transfer the securities in favour of theNominee.(j) Participants must send a communication to their existing Clients who have not yetopted for nomination, to submit a declaration specifically stating the following:• I/We the undersigned wish to make a nomination in respect of my BeneficialOwner (BO) account and the nominee details are as follows:• I/We the undersigned do not wish to make a nomination in respect of my BOaccount.Further, Participants are also requested to refer rule 12.6.3 of Business Rules of <strong>NSDL</strong>with respect to details on nomination.(11) Procedure for change in demographic details(11.1)Change of address (<strong>NSDL</strong>/PI/2004/1622 dated September 7, 2004 & <strong>NSDL</strong>/POLICY/2008/0040 dated June 4, 2008):(a) While processing requests for change of address received from Clients, Participantsshould obtain the following documents:[ 18 ]
(i)a written application for change of address from the Client (In case ofjoint holdings, all holders must sign the application);(ii) POI [copy of any one of the documents mentioned in (I) (1) (1.3) (a) aboveof the Client (sole holder or either of the holders) visiting the office of theParticipant];(iii) latest transaction statement of the account received from the Participant.In case a Client (sole holder or either of the holders) personally visits theParticipant’s office to submit an application (signed by all holders in caseof joint holdings) for change of address alongwith necessary documents(POI / proof of address) mentioned in point no. (I) (1) (1.3), the Participantneed not obtain the transaction statement from such Client (<strong>NSDL</strong>/POLICY/2007/0030 dated June 18, 2007);(iv) Proof of new address (copy of any one of the documents mentioned in (I)(1) (1.3) (b) above) alongwith the original documents of the new addressfor verification.(b) The Client should personally visit the office of the Participant where the Clientmaintains and operates his/her account and submit the application for change ofaddress. However, in case the Client expresses inability to personally visit theoffice of the Participant, the application for change of address alongwith otherdocuments can be submitted through an authorised representative, whose identitythe Participant must verify by collecting any of the proof of identity documentsas stated in (I) (1)(1.3) above.(c) The Client or its authorised representative should sign the application once againin the presence of the officials of the Participant.(d) The Participant should verify the signature of the Client on the application andthe identity documents with the documents maintained with the Participant.Further, the document pertaining to new address should be verified with theoriginal. After due verification, an authorised official of the Participant shouldput his/her signature on the application with remarks “verified with original”and thereafter record the change of address in the DPM System.(e) However, in case Participant could not verify the documents because the recordsof the documents submitted by the Client are kept at a different place, then theParticipant must verify the same within a period of seven working days and onlythen effect the change.(f) After effecting the change of address in the DPM System, the Participant shouldsend a communication to the Client, confirming the change of address, to the oldand the new addresses.(g) In case of change (addition/deletion/modification) in the landmark details forthe address which is already captured in the DPM System, Participants may limitthe changes to the landmark details, after obtaining a request from the Clientson a plain paper, which is signed by all the holder(s) (in case of joint holdings).Participants are advised to note that the address of the Client captured in theDPM System, as mentioned in the proof of address, should not change and onlylimit the change in the landmark details.(11.2)Change of Signature (<strong>NSDL</strong>/PI/2004/0045 dated January 7, 2004):Participants are advised to follow the below mentioned procedure for effecting changeof signature of Clients:(i) The Client should make a request in writing specifying reasons for change insignature.(ii) New signature should be duly attested by Client’s banker.[ 19 ]
(iii) Client should visit the Participant’s office personally and produce valid POI. (<strong>NSDL</strong>/POLICY/2007/0030 dated June 18, 2007)(iv) In the presence of officials of Participant, Client should affix his/her new signature.(v) An authorised official of the Participant shall, under his signature, verify theidentity proof with the proof and photograph that were furnished at the time ofopening of account and thereafter, if found satisfactory, make necessary changesin its records.(11.3) Change in status of Standing InstructionIf the Client requests for change in standing instruction, Participant should carry outthe changes in the DPM System based on proper authorisation received from the Client(signed by all the holders in case of joint holdings). In case the ‘execution date’ forchange in standing instruction is provided by the Client that date must be entered inthe DPM system. If ‘execution date’ for change in standing instruction is not providedby the Client, then the ‘current date’ of execution of such instruction must be entered(<strong>NSDL</strong>/POLICY/2009/0090 dated October 1, 2009).(11.4) Change in bank details such as account type, account number, name, address andMICR(i) Participant should obtain written request signed by the Client. Participant shouldensure that the request submitted by the Client is completely filled, includingthe bank account particulars of the Client and properly signed (signed by all theholders in case of joint holdings) (<strong>NSDL</strong>/PI/97/119 dated July 22, 1997).(ii) Obtain a specimen copy of cheque and capture the changes in the DPM System.(iii) Update the MICR code while updating the bank account details of the depositoryaccount holder(s) (<strong>NSDL</strong>/POLICY/2007/0023 dated April 24, 2007).(11.5) Change in SMS flag and / or mobile numbers:(i) Participant must obtain a written request from the Client for change in mobilenumber and/or SMS flag.(ii) For joint holdings, the written request must be signed by the holder whose mobilenumber and / or SMS flag is being changed.(iii) Participants are advised to strictly capture the ten digit mobile number with thefirst digit as “6” / “7” / “8” / “9” and/or update the SMS flag, as requested bythe client.(iv) For ease of data entry, the SMS flag gets enabled automatically upon capture /modification of mobile numbers in DPM System. Thus, Participants must take duecare at the time of modifying mobile numbers in the DPM System, particularly forClients who have not opted for SMS alert facility. If the Client submits the mobilenumber but does not wish to opt for the SMS Alert facility, the Participant shouldcapture the mobile numbers in the DPM System and disable the SMS flag fromfront end of DPM System or through back office.(11.6) Addition / Deletion / Modification of Power of Attorney holder(s)In case the depository account is operated by Power of Attorney and there is anaddition / deletion / modification of power of attorney holder(s) of such an account,Participants should carry out the changes in the DPM System after obtaining writtenrequest which is duly signed by the Client (signed by all the holders in case of jointholdings) and new Power of Attorney in case of addition / modification. In case ofdeletion, Participants should ensure to dislodge the signature of the Power of Attorneyholder(s) from the DPM System.(11.7) Make a nomination / Cancel the NominationIn case the Clients request to make a nomination / cancel the nomination in theirdepository accounts, Participants should carry out the changes in the DPM System[ 20 ]
(II)after obtaining written request alongwith Annexure JA, which is duly signed by theClient (signed by all the holders in case of joint holdings).After effecting the changes in the DPM System for the abovementioned demographicdetails (11.3 to 11.7), the Participant should send a communication (letter / email /Client Master Report generated from the DPM System or its back office or any othermode which the Participant may deem fit) to such Client informing about the changeseffected in the account of the Client.Guidelines in respect of account opening in case of Body-Corporate (<strong>NSDL</strong>/PI/2002/1319 datedAugust 8, 2002)(1) Procedure for opening account of a Body-Corporate:(1.1) Participants shall obtain the following documents at the time of account opening:(a) Memorandum & Articles of Association, board resolution for opening and operatingdepository account and the list of authorised signatories alongwith their specimensignatures and photographs, etc.(b) Introduction by an existing account holder or by the applicant’s bank.(c) Proof of Address of the corporate evidenced by the document registeredelectronically with Registrar of Companies (ROC) or Bank Statement or Leave andLicense agreement/Agreement for sale or telephone bill (not more than twomonths old) or electricity bill (not more than two months old) in the name ofbody-corporate.(1.2) An authorised official of the Participant should verify the proof of address with theoriginal documents and put his/her signature on them with remarks “verified withoriginal” before proceeding to open the account. In case of documents filed electronicallywith ROC, Participants can accept such documents as a valid proof of address providedthey ensure the following:(a) Obtain copies of challans of payments made to ROC(b) Verify the details viz. name of Client, company identification number and addresson the website of Ministry of Corporate Affairs viz. http://www.mca.gov.in andkeep a copy of screen shot.(1.3) PAN, address and bank details of the body-corporates should be captured after dueverification as mentioned in point no. (I) (2.1), (2.2), (2.3) and (3) above. Participantsshall capture the name & specimen signatures of the authorized signatory(ies) andmode of operation in the “signatory name” panel of the DPM System.(2) Additional requirement with respect to Foreign Corporate Bodies:(a) Participants are advised to obtain photocopies of Proof of Address in respect of foreignaddress in case of FII, Foreign Corporate Bodies, Foreign Banks, Overseas CorporateBodies etc. (referred as foreign entities) and verify the same with originals. In casethese foreign entities also have an Indian address, Participants are advised to obtainthe photocopies of Proof of Address of local address and verify the same with originals.Further, in case if these entities have submitted only Proof of Address as foreign address,in such a situation, Participants may capture the foreign address in both local andforeign address fields given in the DPM System.(b) If Participants find it infeasible to verify the original KYC documents (foreign address ofthese foreign entities) and PAN card, in such a situation it is clarified that(i) the KYC documents and PAN should be duly signed by the authorised signatories;and(ii) attested by the Indian Embassy / Consulate General of the country where theregistered office of the foreign entity is situated and(iii) the attestation is to the effect that it has been verified with the originals.[ 21 ]
Participants should open the depository account or accept the PAN card only after it issatisfied with the authenticity of the documents (Proof of Address and PAN card)(c) As regards proof of address of FIIs/sub-accounts, a copy of the Power of Attorney givenby the FIIs/FII sub-accounts to the Custodians (which are duly notarized and/or apostiledor consularised) that gives the registered address of the FIIs/sub-accounts can be acceptedas proof of address.(d) U.N. entities/multilateral agencies which are exempt from paying taxes/filing tax returnsin India are exempted from the mandatory requirement of PAN. The exemption, however,would be subject to the Participants collecting documentary evidence in support ofclaim of such entities/agencies. After the Participants are satisfied that such entitiesare exempt from paying taxes/filing tax returns in India, Participants are advised tocapture the description “EXEMPTCATG” under the PAN field and enable the PAN flag inDPM System.(e) Participants need not enter into Participant-Client agreement provided:(i) FIIs are registered with SEBI and have entered into an agreement with theParticipant either directly or through their power of attorney holders in accordancewith the provisions of sub-regulation (1) of regulation 16 of the SEBI (ForeignInstitutional Investors) Regulations, 1995; and(ii) Such agreement gives the Participant an authority to act on behalf of the FIIs foravailing the services of the Depository; and(iii) Such agreement has been filed with SEBI;(iv) International Multilateral Agency, who has entered into an agreement with theParticipant under regulation 17 of the SEBI (Custodians of Securities) Regulations1996, and such agreement states that the Custodian will also act as a Participantand all provision pertaining to Participant shall be applicable; then such Participantneed not enter into an agreement as per Annexure B of the Bye Laws.(f) Participants shall ensure that in case of foreign entities, all transactions in the accountare in compliance with FEMA Regulations. Accordingly, Participants are advised to obtainfrom such foreign entities necessary documents evidencing general/specific approvalsas may be required under FEMA Regulations.(g) Obtain a declaration from the foreign entity that it has complied and will continue tocomply with FEMA Regulations.(3) Other Types of Body Corporate Accounts (<strong>NSDL</strong>/PI/2009/0065 dated July 25, 2009):(3.1) Opening of an Escrow Account:Participants should accept the following documents for opening of an escrow account:(a) KYC documents of Corporate and Escrow Agent.(b) Copy of escrow agreement duly signed by all the parties.(c) The account should be opened in the name as mentioned in the Scheme, which isapproved by a competent authority and is in accordance with SEBI regulations.Further, the operation of such account should be governed by the terms andconditions of escrow agreement.(d) Copy of PAN card of both parties involved in such an arrangement. However, PANdetails of the Corporate should be captured in the account after the same hasbeen verified in accordance with point above (I) 2 (2.1).(e) The account should be used only for holding securities, which are required to betransferred under the specific scheme and in accordance with the SEBI regulations.(f) As the account is opened for specific purpose, the same shall be closed immediatelyafter the shares held in the account are transferred to the respective demataccounts or are extinguished as required under the said scheme.[ 22 ]
(3.2) Procedure for opening depository account for unclaimed shares of listed companies(a) The depository account may be opened in the name as “ –Unclaimed Shares Demat Suspense Account” under the type “Body Corporate”and sub-type “Others” by the Issuer.(b) The Issuer shall submit a declaration on its letterhead, signed by the authorizedsignatories, stating that: “We hereby undertake that we will ensure compliancewith the provisions of the applicable SEBI guidelines for dealing with unclaimedshares. We further undertake that the said depository account will only be usedfor specified purposes”.(c) Procedure mentioned above in point no. (II) (1) about opening of depositoryaccount in case of body corporate should be followed.(4) Procedure for opening depository account for Limited Liability Partnership (LLP).(4.1) Obtain the following documents at the time of account opening:(a) Limited Liability partnership agreement and certificate of registration.(b) Resolution/Authority Letter for opening and operating account alongwith list ofauthorised signatories, specimen signatures and photographs.(c) Introduction by existing account holder or by applicant’s bank.(d) Any of the following documents as valid proof of address of LLP:(i) Documents registered with ROC; or(ii) Acknowledged copy of Income Tax return;or(iii) Bank statement; or(iv) Leave and License agreement / agreementfor sale; or(v) telephone bills (not more than two monthsold); or(vi) electricity bills (not more than two months old).(e) PAN, address and bank details of LLP.(4.2) An authorised official of the Participant should verify the proof of address with theoriginal documents and put his/her signature on it with remarks “verified with original”before proceeding to open the account.(4.3) PAN, address and bank details of LLP should be captured after due verification as perthe procedure mentioned in point no. (I) (2.1), (2.2), (2.3) and (3) of Master Circularno. <strong>NSDL</strong>/POLICY/2009/0029 dated April 16, 2009.(4.4) Participants shall capture the name & specimen signature(s) of the authorizedsignatory(ies) and mode of operation in the “signatory name” panel of the DPM System.(4.5) Participant may open the depository account in the name of LLP Client under the Type‘Body Corporate’ and sub-type ‘Limited Liability Partnership’.(5) Procedure for change in demographic details of body-corporate account.(5.1) Change of Address: (<strong>NSDL</strong>/POLICY/2009/0032 dated May 4, 2009)(a) A written application for change of address of the corporate entity, signed by theauthorised signatories should be submitted to the Participant.(b) Atleast one of the authorised signatories should visit the office of the Participantin person to submit its application for change of address alongwith necessarydocuments and sign the application once again in the presence of the officials ofthe Participant.[ 23 ]
(c) Participant should collect Proof of new address (copies of documents mentionedunder (II) (1) (1.1) alongwith the original document of new address, for verificationby the Participant).(d) An authorised official of the Participant shall verify the application and theabovementioned documents with the original and put his/her signature on theapplication with remarks “verified with original” and thereafter record thechange of address in the DPM System.(e) The Participant should write a letter to the Client (Body-Corporate) at the oldaddress as well as the new address to confirm the change of address.(5.2) Change of authorised signatory:In case of change in authorised signatory, the Client should provide a fresh board resolutionmentioning authorised signatories who shall operate the depository account alongwiththe specimen signature and photograph of the new authorised signatory. Participantsneed not obtain the details of the existing authorised signatories if they remainunchanged. Thereafter, Participants are advised to capture the signature of the newauthorised signatories in the DPM System. Participants should ensure that the signaturesof the outgoing authorised signatories should be dislodged from the DPM System.(5.3) Change in status of Standing Instruction:If the Client requests for change in standing instruction, Participant should carry outthe changes in the DPM System based on proper authorisation signed by the authorisedsignatories of such an account.(5.4) Change in bank details such as account type, account number, name, address andMICR:(i) Participant should obtain written request signed by the authorised signatories.Participant should ensure that the request submitted by the Client is completelyfilled, including the bank account particulars of the Body-Corporate and properlysigned by authorised signatories (<strong>NSDL</strong>/PI/97/119 dated July 22, 1997).(ii) Obtain a specimen copy of cheque and capture the changes in the DPM System.(iii) Update the MICR code while updating the bank account details of the Client(<strong>NSDL</strong>/POLICY/2007/0023 dated April 24, 2007).(5.5) Addition / Deletion / Modification of Power of Attorney holder(s)In case the depository account is operated by Power of Attorney and there is an addition/ deletion / modification of Power of Attorney holder(s) of such an account, Participantsshould carry out the changes in the DPM System after obtaining written request whichis duly signed by the authorised signatories and new Power of Attorney in case of addition/ modification. In case of deletion, Participants should ensure to dislodge the signatureof the Power of Attorney holder(s) from the DPM System.(6) Change in name of Body-Corporate accounts (<strong>NSDL</strong>/POLICY/2008/0085 dated December16, 2008):(i) The DPM System allows Participants to make name change in Corporate accounts forClient types viz., Body-Corporate, Bank, Financial Institution (FI), FII, Mutual Fund(MF), Trust and various sub-types as given in the enclosed Annexure I.(ii) Documents required to be collected by Participants at the time of change of name ofCorporates are given below:(a) In case the entity is registered under the Companies Act, 1956, the followingdocuments should be obtained from the Client:• Letter requesting for change of name signed by the authorized signatories.• Certified true copy of fresh certificate of incorporation consequent uponchange of name issued by the Registrar of Companies.[ 24 ]
• Certified true copy of Board Resolution for change of name.(b) In case of other corporate entities, the following documents should be obtainedfrom the Client• Letter requesting for change of name signed by the authorized signatories.• Certified true copy of Board Resolution for change of name.• Certificate of registration issued by SEBI / relevant Statutory Authorities,as applicable.(iii) The change of name for a Corporate account can be carried out in the DPM Systemthrough Client Modification Module - Primary and Address Details Modification.(iv) While carrying out the modifications, the name of any existing account holder of anaccount can neither be deleted nor any new name can be added. Participants can onlymake changes to the name(s) of existing account holder(s) of the account.(v) When the instruction is captured and verify/released, the DPM System will flash:(a) an alert message on the screen as to whether the Participant wishes to makechanges to the PAN, email ID, mobile number etc. of the account holder.Participants may ignore such message if there are no changes to be carried outwith respect to the aforesaid details.(b) a warning message on the screen to re-capture the signatures of the authorizedsignatories. Participants may ignore such message if Participants have alreadyre-captured the signatures of the authorized signatories or there is no change tothe authorized signatories.(vi) The Client Name Audit Report in the DPM System will display the old as well as newname of the CorporateNote :1. In case of amalgamation / scheme of arrangement, Participants are requested to close theexisting account and open new account by following the prevailing process, as at present.2. Name change to the Corporate account can be carried out only through the front end applicationof the DPM System.3. The pledge details in the DPM System of the Participant of the pledgee will continue to reflectthe old name of the Corporate, if the Corporate is the pledgor.4. Subsequent to name change, the Transaction Statement (SOT) report will reflect the newname of the Corporate for the SOT generated for the past dates as well. The Statement ofHolding (SOH) report will also reflect the new name of the Corporate. Hence, it is for theCorporate to decide whether it wants to open a new account or continue with the existingaccount with the new name.After effecting the changes in the DPM System for the abovementioned demographic details(point nos. 5.2 to 5.5 and 6), the Participant should send a communication (letter / email /Client Master Report generated from the DPM System or its back office or any other modewhich the Participant may deem fit) to such Client informing about the changes effected inthe account of the Client.(III) Depository accounts opened in the capacity of Individual/Body Corporate as applicable(1) Procedure for opening depository account in case of Trusts such as Provident Fund trusts,Gratuity trusts, Superannuation trusts etc. (<strong>NSDL</strong>/POLICY/2008/0018 dated March 24, 2008)The procedure and documents required for the opening of depository accounts in case ofregistered trusts/ public trusts, un-registered / private trusts and trusts established byorganisations for providing terminal benefits to its employees is as follows:(A) Registered Trust:In case the depository account is to be opened by a registered trust where a registrationcertificate is issued by a Statutory Authority under the provisions of the Bombay Public[ 25 ]
(B)Trust Act, 1950 or The Indian Societies Registration Act, 1860, Participants are advisedto obtain the following documents:(i) Requisite KYC documents, PAN Card and Bank details of the registered trust asper the requirement mentioned at Point Nos. II (1) above for body corporate.(ii) Notary certified true copy of the trust deed,(iii) Certified true copy of registration certificate issued by the authority underprovisions of the Bombay Public Trusts Act, 1950 or The Indian Societies RegistrationAct, 1860,(iv) Certified copy of the resolution passed by the Board of Trustees giving the namesof trustees authorised by the Board of Trustees to open and operate the depositoryaccount.After obtaining the documents, Participants are advised to follow the below mentionedprocedure:(i) Open the depository account under the category and in the name of “Trust”,(ii) Capture the PAN and Bank details of the registered trust in the DPM System afterdue verification,(iii) Capture the signature of the trustee(s) in the DPM SystemUnregistered Trust:The Department of Company Affairs had vide its circular dated June 12, 1957 clarifiedthat the shares in a company which are the property of trust can be held in the namesof trustees being Individuals, Corporations, Companies or Societies registered underthe Societies Registration Act, 1860 without the addition of the statement that they aretrustees. It is also further clarified in the said circular that the shares can be held in thename of a trust if the trust is a separate legal entity such as registered society. Hence,unless the trust is a separate legal entity, the depository accounts have to be opened inthe names of trustees irrespective of whether they are Individuals, Corporations orCompanies.As per the circular issued by the Department of Company Affairs, the relationship oftrust between a trustee and the beneficiary is not required to be taken note of in theaccount by the Participants while opening the depository account. Trusts establishedfor holding of securities for the benefit of family members, holding of securities for thebenefits of employees etc would fall in this category. In these cases, Participants areadvised to treat the applicant as a private trust and obtain the following documents:(i) Notary certified true copy of the trust deed,(ii) If the trustee(s) are individuals, then open the depository account in the individualname under the category ‘Individual’ by obtaining documents viz. Account openingform, POI, Proof of Address, etc. of the Client / Applicant, including carrying out‘in-person’ verification, as per the procedure laid down in Clause No. (I) (1)above for non body-corporate accounts,(iii) In case the trustee(s) of the unregistered trust are corporations, companies orentities registered under the Bombay Public Trust Act, 1950 or The Indian SocietiesRegistration Act, 1860, then open the accounts in their respective names underthe Type ‘Body-Corporate’ and Sub-type ‘Others’ by obtaining documentsmentioned at Point No. (II) (1) above for body corporate. Further, Participantsshould obtain certified copies of the resolution passed by such entities giving thenames of the authorised official(s) i.e. trustee(s) who shall open and operate thedepository account,(iv) Only those securities that belong to the trust can be held in such a depositoryaccount. Securities belonging to the trustee(s) in their individual capacities willhave to be held in separate depository account(s) of such person(s),[ 26 ]
(v)Capture the PAN and Bank details of the unregistered trust in the DPM System,after due verification,(vi) Capture the signature of the individuals in case the trustee(s) are individuals. Incase the trustee(s) of the unregistered trust are corporations, companies or entitiesregistered under the Bombay Public Trust Act, 1950 or The Indian SocietiesRegistration Act, 1860, capture the signature of the authorised signatories in theDPM System.(C) Opening of accounts for Terminal Benefit Funds operated as Trusts:In case of terminal benefit funds such as Provident Fund / Gratuity Fund / SuperannuationFund that are operated as Trusts and where a Recognition Certificate is issued by theIncome Tax Authorities and / or the Regional Provident Fund Commissioner, as the casemay be, Participants are advised to obtain the following documents:(i) Requisite KYC documents, PAN and Bank details of the trust as mentioned atPoint No. II (1) above for body corporate,(ii) Notary certified true copy of the trust deed,(iii) Certified true copy of Recognition Certificate issued by the Income Tax Authoritiesand / or the Regional Provident Fund Commissioner, as the case may be,(iv) Certified copy of the resolution passed by the Board of Trustees giving the namesof trustee(s) authorised by the Board of Trustees to open and operate thedepository account,(v) Only those securities that belong to the trust can be held in such an account.Securities belonging to the trustee(s) in their individual capacities will have toheld in a separate depository account(s) of such person(s).After obtaining the documents, Participants are advised to follow the below mentionedprocedure:(i) Open the depository account under the category and in the name of “Trust”,(ii) Capture the PAN details and Bank details of the registered trust in the DPM Systemafter due verification,(iii) Capture the signature of the trustee(s) in the DPM System.(2) Opening of promoter account (<strong>NSDL</strong>/POLICY/2007/0047 dated August 13, 2007)Separate sub-types are available in the DPM system to enable promoters to separately holdsecurities issued as “Promoter” of the company. While opening such accounts, Participants areadvised to obtain an undertaking from the Client that said beneficiary account(s) are openedfor the sole purpose of holding and transacting for the securities held as promoter and noother securities will be held/transacted in the said account.(3) Opening of DR account (<strong>NSDL</strong>/PI/2002/0846 dated May 29, 2002, <strong>NSDL</strong>/PI/2002/1336 datedAugust 9, 2002 and <strong>NSDL</strong>/PI/2009/0059 dated July 18, 2009):A sub-type “DR” is present for the Client types viz.; ‘Resident’, ‘Non Resident Indian’, ‘ForeignInstitutional Investor’, ‘Corporate Bodies’, ‘Foreign National’ and ‘Mutual Fund’. This subtypeis for the purpose of enabling investors to separately hold equity shares issued uponcancellation of Depository Receipts (GDR/ADR) held by them. Further, the existing accountholders under Client type ‘Foreign National’ have been categorised under the sub-type “FN”.In this context, Participants are advised as follows(a) In order to receive the securities issued upon cancellation of the Depository Receipts(DRs) held by the investors, they will have to open a separate account with sub-type“DR” under the relevant Client type/category and ensure that only such securities arecredited in this account.(b) The standing instruction indicator in the DPM System should not be enabled for accountswith sub-type “DR”. The Clients will have to give specific receipt instructions to the[ 27 ]
Participants for receiving securities issued upon cancellation of DRs.(c) In this regard, it is also clarified that since the Client has already been identified by theParticipant (the Client should be an existing account holder), a separate agreementmay not be required. However, Participants must ensure that the Client gives a lettermentioning its intention to open a separate account for holding DR-cancelled securitiesand that it will be bound by the agreement it had earlier signed with the Participant(<strong>NSDL</strong>/PI/2002/0899 dated June 7, 2002).(4) Opening of a Commodity Account (<strong>NSDL</strong>/PI/2003/1882 dated November 27, 2003, <strong>NSDL</strong>/PI/2005/1441 dated August 9, 2005 and <strong>NSDL</strong>/POLICY/2009/0007 dated January 20, 2009)(i) Account opening procedure will be similar to depository account. All precautions andprocedures for account opening, change in address, etc. as applicable to securitiesaccount shall be followed. For the purpose, Participant should be empanelled withCommodity Exchanges (who have established connectivity with <strong>NSDL</strong>) for providingdepository services relating to warehouse receipts.(ii) Accounts opened under this agreement shall hold only electronic warehouse receipts ofrespective Commodity Exchanges and cannot be mixed up with other securities. Further,the Participant needs to open separate accounts and enter into separate agreementswith the Clients for holding warehouse receipts of NCDEX and MCX. In case the Clientintends to hold warehouse receipts of National Spot Exchange Limited (NSEL), the accountopened for holding warehouse receipts of MCX can be used, provided the Participant isempanelled with both MCX and NSEL. If the Participant is exclusively empanelled withNSEL, Clients need to open a depository account and execute the prescribed agreementwith the Participant for holding electronic warehouse receipt of NSEL.(iii) Participants may make their own business/contractual agreement with the CommodityExchanges / warehouse owners, as they deem fit, including terms and conditions relatedto collection of rent, etc. If Participants are required to collect any charges/tax/renton behalf of Commodity Exchanges / Warehouse, Participants may have to ensure thatsuch function has adequate legal basis.(iv) <strong>NSDL</strong> will issue circular relating to activation of Commodities Identifier [ICIN] (equivalentto ISIN) as and when such ICINs are activated in the system. The transaction statementwill contain ICIN-wise balances. Commodity descriptor will contain unit of measurement,for e.g.:- “(ICIN No.) Castor Seed Grade A, Ahmedabad ( in MTs).” MT = Metric Tonnes.(v) Initial credit of electronic warehouse receipts into depository account will be effectedby way of corporate action.(vi) Procedure for transfer, pledge and freeze will be the same as is applicable to securities.(vii) Participants are advised to note that for making a request for delivery of commodities/metals represented by warehouse receipts “Physical Delivery Request Form” (PDRF) inthe prescribed format should be filled-up by the Clients and after processing the requestssuch instructions should be executed in the DPM System by the Participants using ‘Remat/Repurchase Screen’ under the type ‘Remat’. The procedure for rematerialisation ofwarehouse receipts will be same as is applicable for securities. Participant shall issueacknowledgment for receipt of the remat request by entering remat request (transaction)number on the acknowledgment portion and attest the signature of the Client on thecopy of PDRF. Client will submit this acknowledgment and attested copy of PDRF to thewarehouse at the time of taking delivery.(5) Procedure regarding operation of account through Power of Attorney (<strong>NSDL</strong>/PI/2000/982dated June 23, 2000):(5.1) Sample ClauseA sample clause is given hereunder which if it forms a part of the Power of Attorneycould suffice:“To sell or otherwise deal with or dispose of and to purchase, subscribe or otherwise[ 28 ]
acquire in any manner from the market or under public or rights issues or otherwise andaccept the transfers of any stocks, funds, shares, debentures, Government and otherpromissory notes, securities, bonds, debentures, annuities or other mercantile negotiableinstruments which shall or may at any time belong to me or which hereafter be transferredto me, whether solely or jointly and whether in my own right or having any otherinterest of whatsoever nature and however arising and in any capacity whatsoeverincluding those belonging to others with my name and for such purposes to sign, executeor endorse all instruments of transfer and other documents for any purpose what soever by the virtue of these present.”(5.2) General points regarding Power of Attorney(i) A Power of Attorney executed prior to the promulgation of The Depositories Act isvalid and enforceable.(ii) It is the responsibility of the Participant to verify whether the Power of Attorneyis adequate and sufficiently authorising the holder of the Power of Attorney i.e.,the donee to operate the account of the beneficial owner.(iii) Power of Attorney should be notarized in case of photocopy.(iv) Depository accounts can be operated both by the account holder(s) as well as bythe Power of Attorney holder i.e. donee. For this purpose, Participants shouldensure that the signatures of the account holder(s) and the Power of Attorneyholder are captured in the DPM System (<strong>NSDL</strong>/POLICY/2007/0054 dated September22, 2007).(v) With respect to accounts that are operated through Power of Attorney, Participantshould ensure to enable the Power of Attorney flag of such accounts. (<strong>NSDL</strong>/PI/2005/1102 dated June 22, 2005)(5.3) Participants are advised to review the Power of Attorney document and if the Power ofAttorney contains any clause similar to what has been stated below, the Power of Attorneyshould be modified suitably(i) Power of Attorney Holder i.e. Donee has the sole authority to operate the accountand the account holder(s) is/are restrained from operating the account;(ii) DIS books are denied to the account holders who have executed a Power ofAttorney;(iii) Participants are authorised to merge the securities kept under various accountsof the Clients; and(iv) Participants will have a lien on the securities of the Clients.The above clauses are against the interests of investors and Participants are advised todesist from including such clauses in the Power of Attorney.Participants are advised to provide DIS books to the Clients who have executed a Powerof Attorney and allow the Clients to operate their accounts as well.Further, Participants are advised to maintain separate accounts of the clients, inconformity with Regulation 42 of SEBI (Depositories and Participants) Regulations, 1996.Lien on the securities can be created only as per Regulation 58 of SEBI Regulations andas per the procedure laid down in the Bye Laws and Business Rules of <strong>NSDL</strong> (<strong>NSDL</strong>/PI/2005/2329 dated November 25, 2005).(IV) Procedure for opening and shifting of Clearing Member (CM) Account:1) Opening of CM Account(a) The CM should fill up the Account Opening Form as per the format given in Annexure Kof the Business Rules of <strong>NSDL</strong> and submit the same to the Participant alongwith theagreement (as per Annexure B in the Bye Laws) duly executed on a stamp paper ofappropriate value. Further, the Participant shall be responsible in deciding the value ofthe stamp paper. The schedule of fees to be charged by the Participant to the CM shouldform a part of the agreement.[ 29 ]
(b)(c)(d)Following documents are required for opening a CM account:(i)(ii)(iii)(iv)(v)A copy of the letter from the Clearing Corporation/Stock Exchange intimatingallotment of the CC-CM-ID to the CM signed by its authorised official.A copy of the latest SEBI registration certificate (not applicable for CMs ofCommodity Exchanges).Board Resolution for authorised signatories.Memorandum of Association and the Articles of Association (in case of Corporates).Specimen copy of the cheque for capturing the 9-digit MICR code.Participant should verify the completeness of the account opening form and verify thecopies submitted with the original documents.If the documents are in order, the Participant should accept them and give anacknowledgement duly signed and stamped to the CM.(e) The Participant should forward the following documents to <strong>NSDL</strong> for allotment of CM BPID(i) Copy of Account opening form,(ii) Copy of the letter from the Clearing Corporation/Stock Exchange intimatingallotment of the CC-CM-ID signed by its authorised official and copy of the latestSEBI registration certificate (not applicable for CMs of Commodity Exchanges).These documents should be verified with the original document and stamped“Verified with Original” alongwith the stamp of the Participant, signature ofCompliance Officer, name and designation(f) <strong>NSDL</strong> will allot the CM-BP-ID and intimate to the Participant electronically.(g) The Participant should capture the signature(s) of the authorised signatories as given inthe Account Opening Form in the DPM System.(h) The Participant should enter the Client account number generated from the DPM Systemin the Account Opening Form.(i) The Participant should print the Client Master Report and give it to the CM alongwith acopy of the Agreement.(1.1) Shifting/Closure of CM Account (<strong>NSDL</strong>/PI/005 dated February 5, 1997)The CM may close an existing clearing account and open a new clearing account with anotherParticipant. The CM will have to submit an application for closure of account to its Participantand an application for opening a CM account along with other documents for shifting of the CMaccount as explained below to the new Participant. The existing CM account will be closed bythe old Participant after balances are moved out by the CM. The CM will be assigned a newCM-BP-ID by <strong>NSDL</strong> and a new CM account will be opened by the new Participant. Further, theCM may also submit the closure application upon closure of business/suspension, Participantmay close the account.The procedure for closure and shifting of CM account is as follows:(a) The CM will submit the application for closing the clearing account to the Participant(old) in duplicate.(b) The Participant (old) will verify that the application for closing the clearing account isduly filled and if in order issue an acknowledgement to the CM on the duplicate copy.(c) If the application is not in order the Participant will return the application to the CM forrectification.(d) The CM will submit the following documents to the Participant (new):(i) Application for opening a CM account (as mentioned in point no. (IV) (1))(ii) Letter from Clearing Corporation/Stock Exchange regarding allotment of CC-CM-ID signed by its authorised official.[ 30 ]
Date:(iii)(iv)(v)Application for shifting of clearing account. (as per the below given format)Acknowledgement copy (signed & stamped by the authorised official) of theapplication for closure of the account from the previous Participant.Copy of the latest SEBI registration certificate (not applicable for CMs ofCommodity Exchanges).Participant should verify the completeness of the account opening form and verify the copiessubmitted with the original documents.(a) If the application is not in order the Participant will return the application to the CM forrectification.(b) If the application is in order, the Participant (new) will execute the agreement and givea copy of it to the CM.(c) The Participant (new) will forward the copy of the account opening form along with theabove mentioned documents to <strong>NSDL</strong>. All the documents should be verified with itsoriginal and a stamp “Verified with Original” should be put on the same alongwith thename, designation and signature of compliance officer. <strong>NSDL</strong> will allot the ClearingMember a new CM-BP-ID.(d) The Participant (new) will open the clearing account after the new CM-BP-ID isdownloaded to its DPM System and intimate <strong>NSDL</strong> about opening of the account and thedate from which pay out is intended to be received in new CM account, however, notlater than seven days from opening of CM account by the Participant (new).(e) The new account will be marked to receive receipts-in due on pay-out after <strong>NSDL</strong>receives intimation from Participant (new).(f) <strong>NSDL</strong> will intimate the Participant (old) to commence the procedure for closure of theaccount.(g) On receipt of intimation from <strong>NSDL</strong>, the Participant (old) will disable the standinginstruction (if any). After the completion of one BOD/EOD cycle, the Participant willverify the balances in the clearing account. If the balances happen to be zero and thereare no outstanding instructions for the clearing account, the Participant will change thestatus of the account to “To be closed” and intimate <strong>NSDL</strong> accordingly.(h) On receipt of intimation from the Participant (old), <strong>NSDL</strong> will revoke the old CM-BP ID ofthe CM.(i) In case balances in its clearing account are not zero, the Participant (old) will informthe CM to move its balances out of the CM Pool account in a reasonable time.(j) The Participant (old) will again verify the balances in the account. If the balanceshappen to be zero, the Participant will follow the procedure mentioned in point no. (g)above.(k) If the balance in the old clearing account has not been reduced to zero within one weekof opening of the new account, the Participant (old) shall inform <strong>NSDL</strong> forthwith thatthe balance has not been reduced to zero.APPLICATION FOR SHIFTING OF CLEARING ACCOUNTTo be forwarded through Depository Participant (new)Mr. Prashant VagalVice PresidentNational Securities Depository LimitedTrade World 4th FloorKamala Mills CompoundSenapati Bapat Marg Lower ParelMumbai - 400 013[ 31 ]
Dear Sir,Sub: Shifting of Clearing Member AccountThis is to inform you that we wish to shift our Clearing Member Account as per the details mentionedbelow:Name of Clearing Member (CM)Name of Clearing Corporation (CC)CC - CM -ID (Allotted by CC)CM- BP-ID (existing) (Allotted by <strong>NSDL</strong>)Name of Depository Participant ( Old)Name of Depository Participant (New)We request you to please allot a new CM-BP-ID to facilitate shifting of the Clearing Member Account.Yours faithfully,(Clearing Member)(1.2) Procedure for name change of CM accountThe following documents should be forwarded to <strong>NSDL</strong> for effecting change of name inthe CM account.(a) Copy of the latest SEBI registration certificate in the new name (not applicablefor CMs of Commodity Exchanges).(b) Letter from the Clearing Corporation/Stock Exchange signed by its authorisedofficial mentioning the CC-CM-ID and effecting the change of name in its system.(c) Copy of document/ certificate received from ROC notifying the name change.(d) Copy of High Court Order in case of name changes due to mergers/amalgamations.These documents should be verified with the original document and a stamp “Verifiedwith Original” should be affixed on the documents alongwith name, designation andsignature of Compliance Officer.(2) Opening of Margin Account (<strong>NSDL</strong>/POLICY/2007/0029 dated June 15, 2007)A new sub-type viz. “Margin Account” has been added to the Client types viz.; ‘Resident’ and‘Body Corporate’ under Client Maintenance Module in DPM System.The new sub-type “Margin Account” is added to enable CMs to open beneficiary accounts tohold securities for Client margin purposes. While opening such accounts, Participants areadvised to obtain an undertaking from the CM/Brokers that the said beneficiary account(s) areopened for the sole purpose of holding and transacting for Client margin purposes and noother securities will be held/transacted in the said account.(V)FAQs related to Account opening(1) What is the procedure for accepting telephone bills as Proof of address?(<strong>NSDL</strong>/POLICY/2006/0026 dated July 17, 2006)Telephone bills in respect of landline telephones provided by any service provider can beaccepted as proof of address. It is hereby clarified that telephone bills (not more than twomonths old) pertaining to only Landline telephones (other than Fixed Wireless Phone)irrespective of the service provider can be accepted by Participants as proof of address.[ 32 ]
Participant may ascertain the fact that such telephone number exists in the name of theentity, by making a call or by any other means.(2) In case of Corporate Client whether proof of address filed electronically can be acceptedas proof of address?As per the recent amendments in Income Tax Act, 1961 and Companies Act, 1956, Companiesare required to file various documents, returns etc electronically. In this regard, it is herebyclarified that acknowledged copy of Income Tax Return, if filed electronically, will not beaccepted as a valid proof of address in case of corporate Clients. Further, in case of documentsfiled electronically with ROC, Participants can accept such documents as a valid proof ofaddress provided they ensure the following:a. obtains copies of challans of payments made to ROC.b. verify the details viz. name of Client, company identification number and address onthe website of Ministry of Corporate Affairs viz. http://www.mca.gov.in and keep acopy of screen shot.(3) What is procedure for opening a beneficiary account in the name of a proprietorship firm?Participants are advised to note that a depository account cannot be opened in the name ofthe proprietorship firm. The account has to be opened in the name of the proprietor byobtaining the documents mentioned in point no. (I) (1) (1.3) above and capturing the PANdetails of the proprietor.(4) Can a commodity depository accounts be opened in the name of “Partnership firm” and“Proprietorship firm”?Commodity depository accounts can be opened in the name of “Partnership firm” and“Proprietorship firm” under type/sub-type “Body Corporate/Others”, as the structure andregulations governing transactions in commodities do not prohibit a partnership/proprietorshipfirm to hold commodities in the name of partnership/ proprietorship firm. For the purpose,Participant should be empanelled with Commodity Exchanges for providing depository servicesrelating to warehouse receipts.(5) What is the procedure to be followed if there are more than three holders? (<strong>NSDL</strong>/PI/99/231 dated April 8, 1999)In the account opening module of the DPM System, there is a provision for only three jointnames as presently, allotments in the primary market and purchases in the secondary marketare permitted only with a maximum of three joint names. However, there are very old casesof shareholdings where the number of joint holders are four or even more. The issue ofdematerialisation of such holdings was discussed in the SEBI meeting held on February 12,1999 and it was decided that Depositories shall formulate a system to incorporate more thanthree joint names for Client accounts and Participants shall be advised accordingly. It was alsodecided that no credits, other than on account of dematerialisation of securities would beallowed to such accounts. In view of this, Participants are advised to follow the proceduregiven below for the same :A separate account must be opened in the name of the joint holders with four or more names.The standing instructions to receive credits, receipt instructions, new issue applications andany other instruction which has the effect of crediting this account should not be accepted.Appropriate annexure should be attached to the account opening form in order to includevarious details viz; name, address, signatures, etc. of more than three holders. An undertakingshould be obtained from the Client on the lines that “the Client shall not use this account forthe purpose of allotments in the primary market or purchases from the secondary market andhence no instructions other than for dematerialisation, bonus, rights & preferential offer willbe given by the Client to any person which has the effect of crediting this account”While opening the account, the Participant shall capture the names of the four or more jointholders by numbering them in the DPM and entering the first holder’s name in the first holder’sfield and accommodating the rest of the names in the fields for second and the third holder,[ 33 ]
eg. : - In case of joint holdings in four joint names of Mr. A, Mr. B, Mr. C & Mr. D, the accountcan be opened in the DPM as follows; First Holder’s Name : 1. Mr. A; Second Holder’s Name 2.Mr B; Third Holder’s Name 3. Mr. C 4. Mr. D.The Participant shall process the dematerialisation request as per the usual procedure whileensuring that the pattern of holding as per the certificate tallies with the pattern of holding asper the account. After the balances in such joint account become nil, the aforesaid jointaccount should be closed.Participants are further advised that in case of holdings of a “Trust” held in the joint names offour or more trustees, the procedure given above for opening the account can be adoptedwithout any restrictions on receiving credits into that account.(6) Whether bank statement can be accepted as Proof of Address?(<strong>NSDL</strong>/POLICY/2007/0074 dated December 01, 2007, <strong>NSDL</strong>/POLICY/2008/0037 dated May 27,2008 and <strong>NSDL</strong>/POLICY/2009/0076 dated August 28, 2009)Yes. The bank statement should not be more than two quarters old as on the date of receiptof the account opening form. Further, the bank statements may be monthly or for any otherperiod, subject to the foregoing.Examples:Sr. Date of receipt of Account Bank statement shouldNo. Opening Form not be older than1. September 15, 2009 March 31, 20092. October 15, 2009 June 30, 2009(i)(ii)(iii)Original bank statement:Conditions:(a) The original bank statement is printed on the stationery of the bank, carries logo& name of the bank, displays the name and address of the Client.(b) Obtain a cancelled cheque leaf in original OR a photocopy of cheque and theauthorized official of Participant should verify the same with the original chequeand put his/her signature on it with the remarks “verified with original”.(c) Match the bank details including the account number mentioned on the chequewith that mentioned in the bank statement.Copy of bank statement:Conditions:(a) All the conditions mentioned at point no. (i) (a) to (c) are followed.(b) The authorised official of the Participant should verify the photocopy of the bankstatement submitted with the corresponding original and put his/her signatureon it with the remarks “verified with original”.Original Bank statement on plain paper (Computer generated):Conditions:(a) The bank statement clearly mentions the name and address of the Client.(b) The bank statement is duly attested (signed and stamped) by the authorisedofficial of the bank mentioning the name and designation of such authorisedofficial.(c) Obtain a cancelled cheque leaf in original OR a photocopy of cheque and theauthorized official of Participant should verify the same with the original chequeand put his/her signature on it with the remarks “verified with original”.[ 34 ]
(iv)Bank statement issued in electronic form:Conditions:a) Print out of the bank statement clearly mentions the name and address of theClient.b) Obtain a cancelled cheque leaf in original OR a photocopy of cheque with thename of the Client pre-printed on it. However, in case of a photocopy of chequeit can be accepted provided the authorized official of Participant verifies thesame with the original cheque and puts his/her signature on it with the remarks“verified with original”.Disclaimer : While every care has been exercised by <strong>NSDL</strong> in compiling the master circular out of thevarious circulars/guidelines issued by <strong>NSDL</strong> from time to time, <strong>NSDL</strong> does not warrant completenessor accuracy of information and disclaims all liabilities, losses and damages arising out of the use ofthis information. For any specific/latest information, Participants are requested to refer to the relevantcircular(s) issued by <strong>NSDL</strong> from time to time.Annexure I – Types and Sub-types for Corporate accounts where change of name can be effected inDPM SystemSr. No. Type Sub-Type1 FI Govt. sponsored FI2 FI SFC3 FI Others4 FI Govt. sponsored FI – Promoter5 FI SFC-Promoter6 FI Others-Promoter7 FII Mauritius Based8 FII Others9 FII DR10 Body Corporate Domestic11 Body Corporate OCB-Repatriable12 Body Corporate Govt.Companies13 Body Corporate Central Government14 Body Corporate State Government15 Body Corporate Co-operative Body16 Body Corporate NBFC17 Body Corporate Non-NBFC18 Body Corporate Broker19 Body Corporate Group Company20 Body Corporate Foreign Bodies21 Body Corporate Others22 Body Corporate OCB-NonRepatriable23 Body Corporate OCB-DR24 Body Corporate Foreign Bodies – DR25 Body Corporate Margin Account26 Body Corporate Domestic-Promoter27 Body Corporate Govt.Companies - Promoter[ 35 ]
28 Body Corporate Central Government - Promoter29 Body Corporate State Government - Promoter30 Body Corporate NBFC-Promoter31 Body Corporate Non-NBFC-Promoter32 Body Corporate Group Company - Promoter33 Body Corporate Foreign Body-Promoter34 Body Corporate Others-Promoter35 Body Corporate Co-operative Body - Promoter36 Body Corporate Foreign Venture Capital37 Body Corporate Domestic – DR38 Body Corporate Limited Liability Partnership39 Body Corporate Limited Liability Partnership - DR40 Mutual Fund DR41 Mutual Fund MF42 Bank Foreign Bank43 Bank Co-operative Bank44 Bank Nationalised Bank45 Bank Others46 Bank Others-Promoter47 Bank Nationalised Bank - Promoter48 Bank Foreign Bank - Promoter49 Bank Co-operative Bank - Promoter50 TrustAccount Opening - Bank Account detailsCircular No:Sub: SEBI clarification on bank account details to be captured in depository<strong>NSDL</strong>/POLICY/accounts of PMS clients.2010/0025 Attention of Participants is invited to Circular No. <strong>NSDL</strong>/POLICY/2009/0047Date: March 19, 2010 dated June 13, 2009 informing about SEBI's clarifications regarding issuesraised by Portfolio Managers especially in respect of bank account details tobe captured in the depository accounts of PMS clients.SEBI has now vide its letter no. MRD/DoP/<strong>NSDL</strong>/ST/198672/2010 dated March17, 2010 informed that bank account details of Portfolio Managers cannot becaptured in the depository system in place of bank details of PMS clients.Participants are advised to take note of the above for opening and operatingdepository accounts.Circular No:Sub: Utility to identify Client accounts with no MICR code or MICR code<strong>NSDL</strong>/POLICY/captured with invalid format in the DPM System2010/0014 All Participants are hereby informed that based on the representation receivedDate: February 9, 2010 from Participants, utility is being provided to identify Client accounts withno MICR code or MICR code captured with invalid format in the MICR field.Examples; Client accounts with no MICR code, MICR Code not equal to 9digits, MICR code consists of alphanumeric characters / only alphabets / specialcharacters or spaces in between MICR code.[ 36 ]
Participants can download this utility from <strong>NSDL</strong> SQLASSIST Intranet site(https://sqlassist) under the head (https://sqlassist/utility to identifyincorrect MICR details). The process to install the utility in the DPM System isgiven below:1. Copy the folder i.e. "Utility to identify incorrect MICR details" (afterdownloading it from SQLASSIST) into C:\ drive of your GISMO.2. Double click on the file named as "Double_Click.Bat".3. TAB delimited text file would be generated containing Client ID, contentscaptured in the MICR field, Client name, Client status, bank name,bank account number, Client address, mobile number of the first holder.The aforesaid output will facilitate Participants to re-verify with accountopening documents / take up with their Clients and obtain correct informationabout MICR details for re-capturing of the same in the DPM System.For information / clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inCircular No:Sub: Updation of Bank account number of Punjab National Bank from the<strong>NSDL</strong>/POLICY/present 16 digits to 15 digits and Updation of Bank name from UTI Bank2008/0070 Limited to Axis Bank LimitedDate: October 16, 2008 All Participants are hereby informed that Punjab National Bank (PNB) hasintimated to <strong>NSDL</strong> to modify / truncate the bank account number of PNBfrom the present 16 digits to 15 digits for demat accounts with bank detailsof PNB. In this regard, Participants are advised to note that <strong>NSDL</strong> wouldfacilitate updation by truncating/deleting the fifth digit having '0' in 16 digitbank account number under the field name 'Bank A/c No.' with bank name'Punjab National Bank' / 'PNB' under the field name 'Bank name', captured inthe DPM System under the head 'Financial Details' in the Client MaintenanceModule. In addition, Bank Name also will be updated to 'Punjab NationalBank'.Similarly, in light of change of name of UTI Bank Limited to Axis Bank Limited,<strong>NSDL</strong> would update bank name to "Axis Bank Limited" for those beneficiaryaccounts that carry bank name as "UTI Bank Limited" / "UTI Bank", in the fieldname 'Bank name', captured in the DPM system under the head 'FinancialDetails' in the Client Maintenance Module.After the updation has been carried out, Participants are advised tocommunicate to all such Clients about the changes carried-out in their bankdetails alongwith the transaction statement for the month of October 2008or earlier, as the Participants may deem fit. Further, a batch utility would beprovided to Participants to generate a report containing list of Client accountswhere the updation could not be effected. Participants may take appropriateaction based on this utility.For new demat accounts opened or change in bank details requested by Clients,[ 37 ]
Participants are advised to capture the correct 15 digit bank account numbersof PNB or bank name as 'Axis Bank Limited' as the case may be.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>officials on telephone numbers (022) 2499 4482 / 4488 / 4494 / 4214 / 4479/ 4363 / 4212 / 4348 (email : participant-interface@nsdl.co.in).Circular No: Sub: Updation of HDFC Bank account numbers - Prefixing the existing 13<strong>NSDL</strong>/POLICY/digit account numbers with '0' in beneficiary accounts under bank account2008/0041 number field.Date: June 04, 2008 As all Depository Participants (DPs) are aware, HDFC Bank Limited (HBL) haschanged the length of the bank account numbers from 13 digits to 14 digitsby prefixing the existing 13 digit account numbers with '0'. In this regard,DPs are advised to note that in respect of:1) Existing HBL account numbers captured in the DPM system :<strong>NSDL</strong> would facilitate updation of the bank account numbers by prefixingthe existing 13 digit account numbers with '0' for those beneficiaryaccounts that carry 13 digit HBL account number with name 'HDFC Bank',captured in the DPM System under the field names 'Bank A/c No.' and'Bank name' respectively under the head 'Financial Details' in ClientMaintenance Module. After the updation has been carried out, DPs areadvised to communicate to all such Clients about the changes carriedoutin their bank details alongwith the transaction statement for themonth / quarter ended June 2008 or earlier, as the DP may deem fit.Further, a batch utility would be provided to DPs to generate a reportcontaining list of Client accounts where the updation could not beeffected. DPs may take appropriate action based on this utility.2) New demat accounts opened / change in bank details after issuanceof this circular:DPs would be required to capture the correct 14 digit bank accountnumbers of HBL for new demat accounts opened or change in bankdetails requested by Clients.For any information/clarifications, DPs are requested to contact <strong>NSDL</strong> officialson telephone numbers (022) 2499 4482 / 4488 / 4494 / 4214 / 4479 / 4363 /4212 / 4348 (email : participant-interface@nsdl.co.in).Circular No.Sub : RBI intimation - Updation of new bank account numbers<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that Reserve Bank of2008/0022 India (RBI) vide its letter no. DPSS (CO) No. 1432 / 04.03.02/2007-08 datedDate : April 7, 2008 March 12, 2008 has informed <strong>NSDL</strong> about allotment of new bank accountnumbers by banks who have implemented Core Banking Solution (CBS) andthe need to update the same in demat accounts by DPs. The relevant extractsfrom the letter of RBI is reproduced for information and necessary action ofthe DPs.[ 38 ]
"Retail electronic payment system such as Electronic Clearing Services (ECS)and National Electronic Funds Transfer (NEFT) are being used extensively forpayments of IPO refunds by IPO managers, since these electronic paymentproducts facilitate direct, speedy and secured credit of funds to the investors'accounts.However, of late, we have been receiving complaints from the managers tothe issues that funds routed through the electronic modes are gettingreturned by the destination banks. We further observe that such returns aremostly due to providing incorrect or old account numbers of the beneficiarycustomers.As you may be aware, most of the banks have operationalised their CoreBanking Solution (CBS) and new account numbers have been allotted tocustomers under CBS. Majority of banks are posting their inward electronictransactions in Straight Through Processing (STP) manner. Due to this seamlessprocessing, truncated or old account numbers, if any, are being rejected bythe system leading to manual intervention at bank's end. In order to avoidmanual intervention, all customers are required to update their accountnumbers with their respective depositories."In view of the aforesaid, all DPs are requested to advise their Clients toprovide the new bank account details in case of change in the existing bankaccount details. As all DPs are aware, updation of correct bank particulars ofthe Clients would facilitate receipt of IPO refunds, dividend, redemptionpayments etc., into correct bank account of the Clients. At the time ofupdation of new bank account details in the DPM system, DPs are advised toensure compliance with point no. (I) (2) (2.3) of <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/PI/2007/0077 dated December 19, 2007.Circular No:<strong>NSDL</strong>/PI/2002/0698Date: April 30, 2002All Participants are hereby informed that SEBI vide its Circular No. DCC/FITTCIR-3/2001 dated October 15, 2001 has advised that companies shouldmandatorily use ECS facility for distribution of dividends and other cashbenefits to the investors. However, where ECS facility is not available,companies may use warrants for distribution of dividends. Further, SEBI hasinformed vide its Circular no. D&CC/FITTC/CIR-04/2001 dated November 13,2001 that it has received complaints about fraudulent encashment ofinstruments pertaining to distribution of dividends and other cash benefits.In order to avoid such situations, it has advised that companies shouldmandatorily print the bank account details furnished by the Depositories onthe payment instruments.In view of the aforesaid, Participants are once again advised that they shouldcapture the details or record changes in the bank details including MICR numberin the DPM system as per the procedure communicated by <strong>NSDL</strong> in this regardvide its Circular <strong>NSDL</strong>/PI/2000/2295 dated December 20, 2000.[ 39 ]
Account opening - Bank account details - MICRCircular No.Sub : SEBI Circular - Updation of bank accounts and corresponding change<strong>NSDL</strong>/POLICY/ in MICR code by Depository Participants2007/0023 Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/Date : April 24, 2007 POLICY/2006/0006 dated February 23, 2006 wherein DPs were advised toupdate the MICR code in the DPM system if not updated in respect of Clientsresiding in 15 centers where clearing houses are managed by Reserve Bank ofIndia (RBI).Securities and Exchange Board of India (SEBI) vide its letter no. MRD/DEP/PP/91405/07 dated April 17, 2007 has again informed <strong>NSDL</strong> to instruct DPs toupdate MICR code while updating the bank account details of the demataccount holders. Extract from the letter is reproduced for the informationand necessary action of the DPs."Some of the Merchant Bankers & Registrars to Issue had brought to SEBI'snotice that in some cases, when the investors change their bank accounts,the DPs do not update the corresponding change in MICR code whileupdating their bank account details. This results in the refund advice sentthrough Electronic Clearance System (ECS) being rejected or credit doneto wrong bank account."In view of the aforesaid, all DPs are hereby advised to :(i)Communicate to all Clients residing at 15 centers (for the list centersrefer RBI website http://www.rbi.org.in under Electronic ClearingService) to provide details of MICR code, if not already updated in theDPM system.(ii)Ensure that the details of MICR code are updated in the DPM system forall new accounts as well as changes in bank details of existing accountswith respect to Clients residing in 15 centres by following the procedurementioned in Circular No. <strong>NSDL</strong>/PI/2000/2295 dated December 20, 2000.Circular No.Sub : Updation of MICR code, pursuant to SEBI circular on Electronic<strong>NSDL</strong>/POLICY/Clearing System (ECS) for refund in public issues2006/0006 All Participants are hereby informed that SEBI vide its circular no. SEBI/MRD/Date : February 23, DEP/Cir-3/06 dated February 21, 2006 (copy enclosed) has mentioned that2006 applicants residing in 15 centers where clearing houses are managed by ReserveBank of India (RBI) will get refunds through Electronic Clearing System onlyfor public issues. In view of the above, Participants are advised as under :(i)(ii)Inform all the clients residing in 15 centers (For the list of centers referRBI website http://www.rbi.org.in under Electronic Clearing Service)to provide the details of MICR code, if not already updated in the DPMsystem.For all new accounts that are opened or changes in bank details ofexisting accounts, who are residing in 15 centers, Participants shouldensure that the details of MICR code are updated as per the procedurementioned in circular no. <strong>NSDL</strong>/PI/2000/2295 dated December 20, 2000.[ 40 ]
ANNEXUREGENERAL MANAGERMarket Regulation DepartmentSEBI/MRD/DEP/Cir-3/06February 21, 2006The Chairman & Managing DirectorThe Managing Director and CEONational Securities Depository Ltd.Central Depository Services (India) Ltd.Trade World, Kamala Mills Compound,Phiroze Jeejeebhoy Towers,Senapati Bapat Marg, Lower Parel,Dalal Street, Fort,Mumbai – 400 013. Mumbai 400 023.Dear Sirs,Sub. :Use of Electronic Clearing System (ECS) for refund in public issues - Instructions forupdation of MICR code for refunds through ECS1. SEBI vide circular No. SEBI/CFD/DIL/DIP/18/2006/1 dated January 20, 2006 has amended SEBI(DIP) Guidelines, 2000 providing for use of various modes for making refunds in public issues. Acopy of the said circular is available on the SEBI website, namely, www.sebi.gov.in.2. It was mentioned in the aforesaid circular that applicants in 15 centers where clearing houses aremanaged by Reserve Bank of India will get refunds through ECS only and the bank details of suchapplicants will be taken directly from the database of the depositories in respect of issues madecompletely in dematerialised form. It is, therefore, necessary that the MICR code maintained atthe database of the depositories is updated on a real time basis as and when changes take placeto ensure credit of refunds to the bank accounts of the applicants. For this purpose, DPs have toupdate the MICR Code and other bank details of the applicants in the database of the depositories.This is to ensure that the refunds through ECS are made in a smooth manner and that there are nofailed/wrong credits.3. In view of the above, you are advised to issue suitable instructions immediately to your DepositoryParticipants to comply with the aforesaid requirement.4. The Depositories are advised to:-a) make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/ necessary;b) communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report.5. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,V S SUNDARESAN[ 41 ]
Account opening Forms and New FeaturesCircular No:Sub: Nomination details and usage of existing Account Opening<strong>NSDL</strong>/POLICY/Forms (AOF)2009/0004 Attention of all Participants is invited to <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/Date: January 9, 2009 2009/0002 dated January 3, 2009 regarding the new format of Account OpeningForm (AOF) in the context of declaration of nomination details by Clients.Participants may use the existing stock of AOFs provided a stamp with thewords "I/We do not wish to make a nomination" is affixed at the relevantplace to enable the Client to tick the appropriate option.Alternatively, Participants may obtain a separate letter from Client(s) dulysigned by the Client(s) (all the holders in case of joint account) stating thatthey do not wish to make a nomination, if the Client(s) so desires.As regards the declaration to be obtained from the existing accountholderswho have not opted for nominations, Participants are advised to inform theirClients that the declaration must be submitted by April 30, 2009.Circular No.Sub: Extension of deadline for usage of existing Account Opening Form<strong>NSDL</strong>/POLICY/(AOF) & Delivery Instruction Slip (DIS)2008/0019 Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular Nos.Date: March 26, 2008 <strong>NSDL</strong>/POLICY/2007/0069 / 0070 and 0071 dated November 12, 2007 regardingModification of AOF & DIS under the advise of Financial Intelligence Unit-India (FIU-IND). As all DPs are aware, <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/POLICY/2007/0071 dated November 12, 2007 had informed the DPs to use the existingAOF and DIS till March 31, 2008 or till such time the existing AOFs and DIS areexhausted, whichever is earlier. As an interim measure, DPs were advised toaccept the existing AOF and DIS for opening new accounts and executingtransactions respectively, alongwith the 'Additional Details', in a prescribedformat, on a plain paper, duly signed by the applicant(s)/Clients.In this regard, DPs have represented to <strong>NSDL</strong> with a request to extend theaforesaid deadline of March 31, 2008, citing a few practical difficulties asmentioned below:1) Existing stock of AOF / DIS are yet to be exhausted and hence printingof revised AOF / DIS will be a financial burden on the DPs.2) The process of dispatching of the revised DIS in lieu of the existing DIS(which are lying with the Clients) would put the DPs and the Clientsinto hardship. The process would also increase the overheads (cost,man hours etc) of the DPs.In light of the above representations, all DPs are hereby informed that thedeadline for usage of the existing AOFs / DIS is extended till September 30,2008 or till such time the existing AOF / DIS are exhausted, whichever isearlier. During this interim period, DPs are advised to follow the procedurementioned in the aforesaid Circular No. <strong>NSDL</strong>/POLICY/2007/0071 datedNovember 12, 2007 regarding obtaining of 'Additional Details' alongwith theAOF / DIS.In case the stock of the existing AOF / DIS are exhausted before, September30, 2008, DPs would be required to print and distribute the revised AOF andDIS in the format mentioned in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0069dated November 12, 2007.For further information, DPs are requested to contact Mr. Amit Shinde on TelNo. (022) 2499 4486 (email: shindea@nsdl.co.in) / Mr. Vinith Nair on Tel. No.(022) 2499 4414 (email: vinithn@nsdl.co.in).[ 42 ]
Circular No.Sub : Updation of email id and mobile no. in the DPM system.<strong>NSDL</strong>/PI/2005/2328 As all Participants are aware, DPM version 3.9 enabled the Participants toDate : November 25, capture certain additional information of account holders viz., mobile2005 numbers, e-mail addresses etc. Participants have been seeking clarificationfrom <strong>NSDL</strong> whether the mobile numbers and e-mail addresses collected /received from the account holders prior to the release of DPM version 3.9 canbe captured.It is hereby clarified that Participants can capture the aforesaid detailsprovided Participants have verified the same.Circular No.Attention of Participants is invited to point no. (E) (c) of Circular no. <strong>NSDL</strong>/<strong>NSDL</strong>/PI/2005/1726 PI/2005/1102 dated June 22, 2005, which enabled Participants to key-in fromDate: September 15, front end application or upload from back office interface, a few special2005 characters. In this regard, all Participants are advised not to use (key-in orupload) the special character Colon (":") in any of the module of the DPMsystem.Account opening - HUF accounts with joint holdingsCircular No:Sub: Launch of ACE - Alerts to Clients through Email<strong>NSDL</strong>/POLICY/As Participants are aware, SMS Alerts are being sent to Clients upon change of2010/0020 address in respect of their demat accounts. As a measure to further strengthenDate: March 4, 2010 the risk containment mechanism, ACE – Alerts to Clients through Email, afacility is being launched whereby emails will be sent by <strong>NSDL</strong> to the emailaddress (captured in the DPM System) of the account holder(s) in case ofchange of address. The salient features of ACE are as follows: The parameters for sending email alerts will be similar to SMS Alertfacility (Refer Circular No. <strong>NSDL</strong>/POLICY/2009/0077 dated August 29,2009). Email alerts will be sent to the email address of the account holder(s)available in the DPM System. Account holder(s) will receive email alerts from the Email ID :nsdl_alerts@nsdl.comA sample text of the email is enclosed at Annexure A.Annexure ASubject line : Your demat account with ____________(DP name) - addressupdationDear _____________ (name of the holder),As you are aware, your demat account (Client ID XXXX9999) is with_____________ (name of DP) (DP Id IN_______), a Depository Participant ofNational Securities Depository Limited (<strong>NSDL</strong>). As per your request, the addressin your demat account (Client ID XXXX9999) is updated by your DepositoryParticipant. The updated address is mentioned below:Address Line 1Address Line 2Address Line 3[ 43 ]
Address Line 4For more information, please contact your Depository ParticipantRegards,National Securities Depository Limited (www.nsdl.co.in)Circular No:<strong>NSDL</strong>/PI/2002/1346Date : August 12, 2002This is an auto generated email, Please do not reply.As per Business Rules of <strong>NSDL</strong>, penalty points are imposed on Participants ifHUF accounts are opened with joint holdings. In this regard, while someParticipants have taken steps to rectify such accounts, it is observed thatmany HUF accounts with joint holding are still in 'Active' status.In this context, Participants are advised to inform all such Clients to opennew accounts in the name of Karta of the HUF, transfer the securities to suchnew accounts and close the old accounts on or before October 31, 2002.Participants are also advised to note that if such accounts are not closed byOctober 31, 2002, then the standing instructions to receive credits should beremoved. Further, Participants should not accept any fresh dematerialisationrequests, receipt instructions, new issue applications and any other instructionwhich may result in credit to such accounts and inform all such Clients suitably.Further, if transfers are effected on or before October 31, 2002 and waiverrequest alongwith necessary supporting documents are submitted to <strong>NSDL</strong>within one month from the date of the bill, the same may be considered forexemption from settlement fee.Clarification regarding capturing address in the client master - IPO financingCircular No:<strong>NSDL</strong>/PI/2004/1794Date : October 1, 2004Participants have represented to <strong>NSDL</strong> whether they can capture in the DPM,address details of a person different from that of the accountholder. Thisrequest was received mainly in respect of accounts opened for the purposeof IPO financing where the accounts are opened with financier's address insteadof the first holder's. The matter was referred to SEBI and SEBI has expressedits inability to accede to the request.In view of the aforesaid, all Participants are advised to strictly comply withthe guidelines prescribed by SEBI and communicated by <strong>NSDL</strong> vide CircularNo. <strong>NSDL</strong>/PI/2004/1622 dated September 7, 2004 by capturing the addressdetails and other particulars of the account holder.Exemption from obtaining latest transaction statementCircular No.Sub : Requirement of submission of Transaction Statement for various<strong>NSDL</strong>/POLICY/depository related activities2007/0030 As all Depository Participants (DPs) are aware, DPs are required to obtainDate: June 18, 2007 latest transaction statement from the Client at the time of:(a) Change of address in the depository account of the Client (non-bodycorporates) (refer Circular No. <strong>NSDL</strong>/PI/2004/1622 dated September7, 2004),[ 44 ]
(b) Change of address in the depository account of the Corporate (referCircular No. <strong>NSDL</strong>/PI/2002/1319 dated August 8, 2002),(c) Change of signature (refer Circular No. <strong>NSDL</strong>/PI/2004/0045 datedJanuary 7, 2004),(d) Registration, reset of password etc. in case of SPEED-e and IDeAS,(e) Requisition for loose-leaf delivery instruction slip (DIS) (refer CircularNo. <strong>NSDL</strong>/PI/2004/1401, dated August 5, 2004).In this regard, DPs have requested for exemption from the requirement ofobtaining the latest transaction statement from the Client, in case the Clientpersonally visits the DP’s office.1) Revised guidelines - exemption from obtaining the latest transactionstatement(a) Change of address in case of non-body corporate accounts:In case a Client (sole holder or either of the holders) personallyvisits the DP’s office to submit an application (signed by all holdersin case of joint holdings) for change of address alongwith necessarydocuments (proof of identity / proof of address) mentioned inCircular No. <strong>NSDL</strong>/PI/2004/1622 dated September 7, 2004, theDP need not obtain the transaction statement from that Client.(b) Change of address with respect to Corporate Accounts:As one of the authorised signatories is required to personally visitDP’s office as stated in Circular No. <strong>NSDL</strong>/PI/2002/1319 datedAugust 8, 2002, the DP need not obtain transaction statementfrom the authorised signator(ies).(c) Change of signature :Since the Client in case of change in his/her signature is requiredto personally visit the DP’s office, as stated in Circular No.<strong>NSDL</strong>/PI/2004/0045 dated January 7, 2004, the DP need not obtain thetransaction statement from that Client.(d) SPEED-e and IDeAS :In case of SPEED-e and IDeAS, if a Client [sole holder or either ofthe holders who is authorised on behalf of the other holder(s) tooperate SPEED-e or IDeAS] personally visits the DP’s office tosubmit an application (signed by all holders in case of jointholdings) for the following cases, the DP need not obtain thetransaction statement from the Client.SPEED-e : (i) Registration of password based User (ii) Addition topre-notified accounts and (iii) Resetting of password.IDeAS : (i) Registration of password based User and (ii) Resettingof password.(e) Requisition for Loose leaf DIS :In case of requisition for loose leaf DIS, if the Client personallyvisits DP’s office and signs (all the holders in case of joint holdings)the DIS in the presence of the authorised official of DP, the DPneed not obtain transaction statement from such Client(s). Inthis regard, DPs will also have to ensure compliance with CircularNo. <strong>NSDL</strong>/POLICY/2007/0011 dated February 15, 2007 regardingSEBI guidelines regarding safeguards to be followed to addressthe concerns of the investors in case of transfer of securities in[ 45 ]
dematerialized mode. The procedure for processing and recordingthe details of the Client(s) as mentioned in the Circular No. <strong>NSDL</strong>/PI/2004/1401 dated August 5, 2004 will remain unchanged.2) Procedure for processing above mentioned requests from theClient(s):The authorised official (including the staff of the approved franchisee)of the DP will verify the identity of the Client(s) to its satisfaction andnote the following details on the documents/ back of the DIS:(i) Details of the Authorised official (name, designation, employeecode if any and signature) who verified the documents,(ii) Name of the DP and DP Id,(iii) Date and place;(iv) Remark to the effect that the Client had personally visited theDP’s office.In case the authorised representative of the Client visits DPs office to submitthe application, the requirement of obtaining transaction statement fromthe Client will have to be followed as per the procedures laid down in theaforesaid circulars.DPs are advised to note that other processes mentioned in the aforesaidcirculars remain unchanged and DPs will have to ensure compliance withthe same.SEBI OrderCircular No.Sub: SEBI order in the matter of illegal trading - dealings by Shri Bhadresh<strong>NSDL</strong>/POLICY/Sanghvi, Sub-Broker affiliated to Anand Rathi Share & Stock Brokers2009/0124 LimitedDate: December 24, SEBI has passed an ad interim ex-parte order no. WTM/MSS/MIRSD-2/30/092009 dated December 21, 2009 against Shri Bhadresh Sanghvi. The details of thisentity as mentioned in the SEBI order are given below:Sr. No. Name PAN Office Address1 Shri Bhadresh Sanghvi AXDPS8704K 4, Ankruti Apartments,(Trade Name: ArihantSwastik Society,Investment)Navrangpura,Ahmedabad – 380009,GujaratThe detailed SEBI order is available on SEBI website (http://www.sebi.gov.in).In this context, we invite Participants attention to Para no. 5 (b) of theaforesaid SEBI order and advise Participants not to act upon debit instructionsgiven by the above mentioned entity on the authority of Power of Attorneyobtained by him from any other beneficial owner.Circular No.Sub: SEBI Order under sections 11(4) and 11B of the Securities and<strong>NSDL</strong>/POLICY/Exchange Board of India Act, 1992, in respect of Sunchan Securities Ltd.,2009/0102 Mr. Sunil Mansinghani, Ms. Kanchan Mansinghani, Mr. Ajay JanardanDate: October 29, 2009 Kotwal and Mr. Riyaz Ismail Shaikh.[ 46 ]
Attention of Participants is invited to Circular No. <strong>NSDL</strong>/POLICY/2009/0011dated February 10, 2009 in respect of SEBI ad interim ex-parte Order WTM/MSS/MIRSD/DPS-I/160/09 dated January 30, 2009 against a company viz.,Sunchan Securities Limited, its Directors and Compliance Officer.Participants are requested to note that SEBI vide its Order WTM/KMA/MIRSD/156/10/2009 dated October 26, 2009 has confirmed the directions passedvide SEBI ad interim ex-parte Order dated January 30, 2009 against StockBroker, Sunchan Securities Ltd., its Directors viz., Mr. Sunil Mansinghani,Ms. Kanchan Mansinghani and its Compliance Officer Mr. Riyaz IsmailShaik and revoked the directions issued against Mr. Ajay Janardan Kotwal.In light of SEBI Order dated October 26, 2009, Participants may act upondebit instructions given by Mr. Ajay Janardan Kotwal (PAN AANPK8226F)as a Power of Attorney holder. However, SEBI’s advice to not to act upondebit instructions given by the below mentioned entities on the authority ofPower of Attorney obtained by them from any beneficial owner as per thedirections issued in Point no. 6.1 (e) of SEBI Order dated January 30, 2009continues:Sr. Name Description of the entity PANNo.1 Sunchan Securities Limited Company AAFCS8953A2 Mr. Sunil Mansinghani Director AARPM7113P3 Mrs. Kanchan Mansinghani Director AAQPM1032Q4 Mr. Riyaz Ismail Shaikh Compliance Officer AAVPS2375KThe detailed SEBI Orders are available on SEBI website (http://www.sebi.gov.in).Circular No.Sub : SEBI's instructions relating to consolidated UN List of individuals<strong>NSDL</strong>/POLICY/ and entities subject to sanction measures under UNSC Resolutions 12672009/0010 and 1822 on Taliban / Al-QaidaDate: February 3, 2009 Securities and Exchange Board of India (SEBI) vide its letter no. ISD/SR/AK/AML/151335/2009 dated January 20, 2009 (copy enclosed) has informed theStock Exchanges and the Depositories to bring the contents of the consolidatedUN List to the notice of their Members and Participants respectively forinformation, necessary action and compliance. The full and updated versionof the consolidated United Nations' List is accessible at the United Nations'Securitiy Council's Al-Qaida and Taliban Sanctions Committee's website at thefollowing URL:http://www.un.org/sc/committees/1267/consolist.shtmlParticipants are advised to take note of the above and ensure compliancewith SEBI's instructions.Circular No.Sub: SEBI's instructions relating to UN Security Council Resolutions - EU<strong>NSDL</strong>/POLICY/Common Position and Regulations2009/0009 Securities and Exchange Board of India (SEBI) vide its letter no. ISD/SR/AK/Date: February 3, 2009 AML/151748/2009 dated January 22, 2009 (copy enclosed) has informed theStock Exchanges and the Depositories to bring the contents of the UN Security[ 47 ]
Council Resolutions / EU Common Position and Regulations to the notice oftheir Members and Participants respectively for information, necessary actionand compliance. The UN resolutions and EU measures are available on thefollowing websites:1. http://www.un.org/Docs/sc/unsc_resolutions06.htm [UNSCR 1737 of2006]2. http://www.un.org/Docs/sc/unsc_resolutions07.htm [UNSCR 1747 of2007]3. http://www.un.org/Docs/sc/unsc_resolutions08.htm [UNSCR 1803 of2008]4. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:213:0058:0070:EN:PDF[EU Council Common position 2008/652/CFSP of August 07, 2008]5. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:300:0001:0028:EN:PDF[Regulation 2008/1110/EC of November 10, 2008]6. http://www.fatf-gafi.org/dataoecd/47/41/41529339.pdf[FATF Guidance Note on implementation of financial measurescontained in UNSCR 1803]Participants are advised to take note of the above and ensure compliancewith SEBI's instructions.Circular No.CONFIDENTIAL<strong>NSDL</strong>/POLICY/Sub : Confidential-SEBI Order-Three persons debarred from opening2007/0015 demat accounts upto January 30, 2012Date: March 13, 2007 This circular is sent to the Compliance Officer in hard copy form.b. PANCircular No.Sub: SEBI’s directive for Mandatory requirement of PAN.<strong>NSDL</strong>/POLICY/All Participants are hereby informed that SEBI has issued Circular No. CIR/2010/0085 MRD/DP/22/2010 dated July 29, 2010 (copy enclosed) regarding mandatoryDate: July 30, 2010 requirement of Permanent Account Number (PAN). The aforesaid SEBI circularspecifies that in order to ensure better compliance with the Know Your Client(KYC) norms, it has been decided that with effect from August 16, 2010depository accounts which are PAN non-compliant shall also be ‘suspendedfor credit’ other than the credits arising out of automatic corporate actions.It is clarified that other credits including credits from IPO/FPO/Rights issue,off-market transactions or any secondary market transactions shall not beallowed into such accounts.Participants are advised to ensure compliance with the requirement andcommunicate the same to all the concerned Beneficial Owners.Circular No.Sub: Modification in reason- Request for modifying incorrect PAN details<strong>NSDL</strong>/POLICY/in SQLASSIST2009/0108 Attention of Participants is invited to Circular No. <strong>NSDL</strong>/POLICY/2009/0003Date: November 16, dated January 9, 2009 regarding facility to incorporate reasons for modifying2009 incorrect PAN details in SQLASSIST Intranet site (https:\\sqlassist). Based on[ 48 ]
the feedback received from Participants, description with respect to reasoncode no. 2 has been modified as follows:Reason codeDescription2 PAN of Individual entered in HUF/ Partnership Firm/Unregistered Trust/ Association of Persons depositoryaccount & vice versa.Participants are requested to mention the appropriate reason while makingrequests in SQLASSSIST.For further information/clarification, Participants are requested to contactMr. Sandip Patel on Tel No. (022) 2499 4413 (email: sandipp@nsdl.co.in) / Ms.Kirti Samant on Tel. No. (022) 2499 4424 (email: kirtis@nsdl.co.in).Circular No.Sub: Requests for modifying incorrect PAN details - revision of penalty<strong>NSDL</strong>/POLICY/fee2009/0046 Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/Date: June 12, 2009 0045 dated August 2, 2007 regarding penalty for PAN modification. In view ofamendments to the penalty structures pursuant to adoption of uniform penaltystructure by both depositories, with effect from May 1, 2009, the penalty formodifying incorrect PAN details in the DPM System where PAN flag is enabledis revised from Rs.500 to Rs.50. This penalty will be levied on Participants formodification of PAN for each holder unless the reasons for modification arebeyond the control of the Participant.Participants may refer <strong>NSDL</strong> Circular Nos. <strong>NSDL</strong>/POLICY/2007/0052 and <strong>NSDL</strong>/POLICY/2009/0003 dated September 13, 2007 and January 9, 2009 respectivelyregarding procedure to be followed for making requests in SQLASSIST Intranetsite (https://sqlassist) for modifying incorrect PAN details where the PANflag is enabled with reason thereof.For further information, Participants are requested to contact Mr. SandipPatel on Tel No. (022) 2499 4413 (email: sandipp@nsdl.co.in) / Mr. Vinith Nairon Tel. No. (022) 2499 4414 (email: vinithn@nsdl.co.in).Circular No.Sub: Requests for modifying incorrect PAN details - Incorporation of<strong>NSDL</strong>/POLICY/reasons / reason code in SQLASSIST2009/0003 As all Participants are aware, the procedure to be followed by ParticipantsDate: January 9, 2009 for making requests in SQLASSIST Intranet site (https:\\sqlassist) for modifyingincorrect PAN details where the PAN flag is enabled was informed vide CircularNo. <strong>NSDL</strong>/POLICY/2007/0052 dated September 13, 2007. A facility toincorporate reasons for modification has now been provided. This facility isfor both, front end data entry as well as batch mode (the file format of thebatch file is available on SQLASSIST). The various reasons and correspondingcodes are given below:[ 49 ]
Reason codeDescription1 Allotment of new PAN by Income Tax Department (ITD)2 PAN of Individual entered in HUF demat account & vice versa3 Typographical mistake4 PAN of first holder wrongly entered in second holder, thirdholder or vice versa5 PAN of Karta wrongly entered in HUF demat account6 Proactive measures to cleanup incorrect PAN details7 PAN of Guardian wrongly entered in Minor accountParticipants are advised to mention the appropriate reason while makingrequests.Other procedural aspects with respect to making of requests for PANmodification as mentioned in Circular No. <strong>NSDL</strong>/POLICY/2007/0052 datedSeptember 13, 2007 remain unchanged.For further information, Participants are requested to contact Mr. SandipPatel on Tel No. (022) 2499 4413 (email: sandipp@nsdl.co.in) / Mr. Vinith Nairon Tel. No. (022) 2499 4414 (email: vinithn@nsdl.co.in).Circular No.Sub: Revised deadline for closure of PAN non-compliant beneficiary<strong>NSDL</strong>/POLICY/accounts with no security balances.2008/0082 Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2008/Date: November 18, 0066 dated September 29, 2008 regarding closure of beneficiary accounts2008 that are frozen due to non compliance with PAN requirements and having nosecurity balances by November 15, 2008.In light of the representation received from Participants, the deadline forclosure of such aforesaid accounts has been extended till November 29,2008.Participants are strictly advised to commence the closure of such accountsimmediately and ensure to complete the activity by November 29, 2008.For further information, Participants are requested to contact Mr.Rahul Gupta[Tel No. (022) 24994372 / email: rahulg@nsdl.co.in] / Mr. Sandip Patel [TelNo. (022) 24994413 / email: sandipp@nsdl.co.in] / Mr. Vinith Nair [Tel. No.(022) 24994414 (email: vinithn@nsdl.co.in).Circular No.Sub: Deadline for closure of PAN non-compliant BO accounts with no<strong>NSDL</strong>/POLICY/security balances.2008/0066 Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/POLICY/2006/Date: September 29, 0007 dated March 3, 2006 regarding SEBI directive on PAN as a mandatory2008 requirement for demat account opening. Further, Participants were advisedvide our Circular No. <strong>NSDL</strong>/POLICY/2006/0043 dated September 27, 2006 to'Suspend for Debit' all such accounts where the PAN requirement is notcompleted by December 31, 2006.In this context, Participants are hereby advised to give 30 days notice forcompliance of the PAN requirement to the clients whose accounts are frozendue to PAN non-compliance and having no security balances stating that incase of non-compliance of the same at the end of the notice period, theseaccounts will be closed. Participants may communicate this to the clients[ 50 ]
alongwith the Transaction Statements for the quarter ending on September30, 2008.All such PAN non-compliant accounts which do not have any securitybalances (except accounts with pending demat requests or frozen due tocourt / enforcement / regulatory authority orders) should be closed latestby November 15, 2008.For further information, Participants are requested to contact Mr.Rahul Guptaon Tel No. (022) 24994372 (email: Rahulg@nsdl.co.in) / Mr. Vinith Nair on Tel.No. (022) 24994414 (email: vinithn@nsdl.co.in).Circular No.Sub: SEBI clarification on PAN as a mandatory requirement for demat<strong>NSDL</strong>/POLICY/account opening2008/0049 Further to <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2008/0048 dated June 30, 2008Date: July 8, 2008 regarding SEBI clarification on PAN, SEBI has now vide its Press Release PR No.131/2008 dated July 4, 2008 issued a clarification which is enclosed forinformation and necessary action.AnnexurePRESS RELEASEMandatory requirement of Permanent Account Number (PAN)PR No.131/2008SEBI vide circular dated June 30, 2008 has clarified that Permanent Account Number (PAN) may not beinsisted in the case of Central Government, State Government, and the officials appointed by theCourts e.g. Official Liquidator, Court Receiver etc. (under the category of Government) for transactingin the securities market.It is observed that certain media reports have wrongly reported the aforesaid provision of the said SEBIcircular. It is hereby clarified that the exemption from mandatory PAN requirement applies to transactionsundertaken on behalf of the Central and State Government, but not to the transactions of the employeesof Central and State Government in their personal capacity.MumbaiJuly 04, 2008Circular No.Sub: SEBI clarification on PAN as a mandatory requirement for demat<strong>NSDL</strong>/POLICY/account opening2008/0048 Attention of Participants is invited to Circular no. <strong>NSDL</strong>/POLICY/2006/0007Date: June 30, 2008 dated March 3, 2006, and SEBI Circular no. MRD/DoP/Cir-05/2007 dated April27, 2007 regarding SEBI directive on PAN. In this regard, SEBI has vide itsCircular no. MRD/DoP/Cir-20/2008 dated June 30, 2008 issued certainclarifications on PAN which are enclosed for information and necessary action.AnnexureChief General ManagerMarket Regulation Department-Division of PolicyE-mail: mdrao@sebi.gov.in1. The Executive Directors/Managing Directors of All Stock Exchanges2. MD & CEO, <strong>NSDL</strong>3. MD & CEO, CDSL4. All SEBI Registered IntermediariesMRD/DoP/Cir-20/2008June 30, 2008[ 51 ]
Dear Sirs,Sub: Mandatory requirement of Permanent Account Number (PAN)1. Please refer to SEBI circular No.MRD/DoP/Cir-05/2007 dated April 27, 2007 making PAN mandatoryfor all transactions in the securities market.2. Subsequent to the issuance of the aforesaid circular, SEBI has received representations from certaincategories of investors requesting for exemption from mandatory requirement of PAN for transactingin the securities market.3. Upon consideration of the said representations, and in view of Rule 114 C (1) (c) of Income TaxRules, it is clarified that PAN may not be insisted in the case of Central Government, StateGovernment, and the officials appointed by the courts e.g. Official liquidator, Court receiver etc.(under the category of Government) for transacting in the securities market.4. However, the aforementioned clarification would be subject to the intermediaries verifying theveracity of the claim of the specified organizations, by collecting sufficient documentary evidencein support of their claim for such an exemption.5. The Stock Exchanges and the Depositories are advised to :5.1. make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision immediately.5.2. bring the provisions of this circular to the notice of the member brokers/clearing membersof the Exchange and depository participants of the Depositories and also to disseminate thesame on the website.5.3. communicate to SEBI, the status of the implementation of the provisions of this circular inthe Monthly Development Report.6. SEBI Circular No.MRD/DoP/Cir-05/2007 dated April 27, 2007 stands amended to the extent asclarified under Para 3 of this Circular.7. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securitiesand Exchange Board of India Act, 1992, and Section 19 of the Depositories Act, 1996, to protectthe interests of investors in securities and to promote the development of, and to regulate thesecurities market.Yours faithfully,S V MURALI DHAR RAOCircular No. In continuation to <strong>NSDL</strong> circular <strong>NSDL</strong>/POLICY/2007/0045 dated August 2,<strong>NSDL</strong>/POLICY/2007 wherein Depository Participants' (DPs) were informed that DPs will be2007/0052 restricted from modifying the PAN of a holder in a client account in DPMASDate: September 13, once the PAN flag has been enabled. Further, it was informed that a DP may2007 approach <strong>NSDL</strong> for modifying the incorrect PAN captured in the DPMAS wherePAN flag has been enabled.DPs are hereby informed that from September 15 2007, DPs will be restrictedfrom modifying the PAN of a holder in a client account in DPMAS once the PANflag has been enabled. If a modification request is sent for such accountholders with modification in PAN or PAN flag (i.e. "Y" to "N"), the modificationrequest would be rejected by <strong>NSDL</strong> with rejection reason as "PAN ModificationNot Allowed" and "PAN Flag Modification Not Allowed" respectively. However,<strong>NSDL</strong> would provide a facility for DPs to register a request for modification ofPAN for such holders in client account.[ 52 ]
In this regard, DP would be required to send a request containing the list ofaccount holders to <strong>NSDL</strong> for enabling PAN modification for such holders inclient account. (It may be noted that PAN flag once enabled would not beallowed for disabling after September 15, 2007). <strong>NSDL</strong> would flag the accountholders for such client accounts in Depository Module (DM) such that the PANmodification request sent by DP for these account holders would be acceptedby <strong>NSDL</strong>. Once the PAN modification request is accepted by <strong>NSDL</strong>, any furthermodification of PAN of the holder for the account would be disabled in DPMAS.A new request will have to be initiated by DP for any subsequent PANmodifications in this client account.DPs will be enabled to carry out PAN modification for such request usingDPMAS for seven calendar days from the day PAN modification request isregistered with <strong>NSDL</strong>. DP may note that this request would be marked as"expired" if the actual PAN modification request is not received within sevencalendar days and a new request needs to be initiated.DP can register this PAN modification request to <strong>NSDL</strong> through SQLASSISTIntranet site (https:\\sqlassist), set up for accessing DP billing information.DP will be provided with an online screen as well as batch upload facility toregister request for PAN modification for client account having PAN Flag setto 'Y'. The file format for the batch file along with the sample file is availableon SQLASSIST Intranet site.Further, DP would be required to follow maker-checker concept for settingup this PAN modification request on SQLASSIST Intranet site. The existing loginid created for accessing billing information i.e., DPID will be used formaker user. In addition to this, new user id i.e. DPID_C will be created for achecker user (with DP id as default password) to set up this request. Checkerusers will be forced to change the password on first login.The procedure to be followed by the DP, for modifying the incorrect PAN of aholder in a client account captured in the DPMAS where PAN flag has beenenabled is as follows:1. SQLASSIST site will now feature SSL Certificate. In this connection DPswill be initially required to import the root certificate in the browseras attached with the circular.2. DP will log on to SQLASSIST Intranet site (https:\\sqlassist) that iscurrently used to access billing information. After login three optionswill be displayed,a) 'DP BILLING' for downloading billing information.b) 'PAN UPDATE' for uploading/registering PAN modification request.c) 'PAN REPORT' to verify the status of the uploaded/registered PANmodification request.3. DP can register request for PAN modification using online screen for 5client ids or alternatively can upload a batch of client ids.4. DP would be required to follow maker-checker concept for both onlineand batch upload, whereby DP's maker user with user id (DPId) would[ 53 ]
egister the request and the checker user, using another user id((DPId_C), would authorize the same.5. The request would be marked as "Captured" after maker user registersthe request. Checker user would be provided a view for all the pendingauthorization requests. The Checker user would be provided two optionsviz., to either authorize or reject the request registered by maker user.The status of request would be marked as "Uploaded to <strong>NSDL</strong>" after it isauthorized by checker user and "Rejected by Checker" if user rejects it.6. File upload option would be available to maker user only. Checker userhas to individually authorize these requests uploaded through batchfile.7. A separate view, viz., "PAN Report", is provided to both maker andchecker users for checking the status of request registered/ uploadedon SQLASSIST Intranet site.8. <strong>NSDL</strong> would process all the requests received at the end of every businessday (EOD) to enable DP for PAN modification in such client accountsthrough DPMAS on the next business day.9. SQLASSIST system will not offer any Client-id validations. <strong>NSDL</strong> wouldupdate the response of the request as "Accepted" / "Rejected by <strong>NSDL</strong>"on SQLASSIST Intranet site on the next business day.10. DP can check this response through "PAN Report" screen provided onSQLASSIST Intranet site.11. DP can submit the PAN modification request through DPM system forthe requests, which are in "Accepted by <strong>NSDL</strong>" on SQLASSIST Intranetsite. Such request must be made within seven days of setting up therequest.12. The successful acceptance of the request executed on the DM would bethen uploaded on SQLASSIST Intranet site at the end of the day wherethe status of the corresponding account holder for a client accountwould be marked as "Closed/Settled".13. In case a request is in status "Rejected by <strong>NSDL</strong>", rejection reasonswould be provided for corresponding requests on SQLASSIST Intranetsite. DP can check the reason for the same in "PAN Report" view screenand submit the correct requests again.Important Points to note:1. PAN flag cannot be disabled once it is enabled in DPMAS. The aforesaidprovision would be given to modify PAN only. PAN modification requestsent with PAN flag disabled would be rejected by <strong>NSDL</strong>.2. In case PAN or PAN flag modification request is rejected by <strong>NSDL</strong>, thenassociated modification request in other client details (if any), wouldalso stand rejected by <strong>NSDL</strong>. In such case DP would be required tosetup a new modification request for modifying other client detailsseparately.[ 54 ]
3. DP can not submit PAN modification requests for same Client Id andholder indicator if a request for same client id and holder indicator isalready pending in "Accepted" status on SQLASSIST Intranet site.4. DP checker user will be enabled for authorization of PAN modificationrequest for 30 days from the day PAN modification request set up bymaker user (i.e. Request is in "Captured" status). DP may note that thisrequest would be marked as "expired" if the PAN modification requestis not authorized by checker user within 30 days and a new requestneeds to be initiated.Further, as informed in <strong>NSDL</strong> circular <strong>NSDL</strong>/POLICY/2007/0045 dated August2, 2007, a penalty of Rs. 500 will be levied on DPs for modification of PAN foreach holder unless the reasons for modification are beyond the control of theDP. In this regard, DPs are advised to communicate to <strong>NSDL</strong> the reasons formodification, if any, for a particular month, before 10th of the next month.Circular No.Sub : Facility for verifying PAN details of demat account holder(s)<strong>NSDL</strong>/POLICY/Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/2007/0048 POLICY/2006/0007 dated March 3, 2006 wherein DPs were advised to obtainDate : August 14, 2007 PAN card of the demat account holder(s) and compare the name appearingon the PAN card with the name appearing on the website of the Income TaxDepartment (ITD) i.e. http://incometaxindiaefiling.gov.in/challan/enterpanforchallan.jspAll DPs are hereby informed that ITD has now authorized <strong>NSDL</strong> to provide aninternet based service to the eligible entities (which include DPs) forverification of PAN details. The PAN details made available through this facilityare as per the ITD database.In view of this, in addition to the abovementioned ITD website, DPs can alsoverify the PAN details of the demat account holder(s) by subscribing to theinternet based service of <strong>NSDL</strong>. The internet based service of <strong>NSDL</strong> for verifyingPAN details offers three modes of verification:(1) Screen based verification(2) File based verification(3) Software (API) based Verification(1) Screen based Verification:The Users, after login to the Tax Information Network (TIN) website(http://www.tin-nsdl.com / login / Pan Verification) of <strong>NSDL</strong>, can keyinupto a maximum of five PANs in the screen. The PANs may be enteredin the boxes provided in the screen and then submitted. The responsegiving details of PAN will be displayed in the response screen.(2) File based Verification:The Users, after login to TIN website (http://www.tin-nsdl.com / login/ Pan Verification) of <strong>NSDL</strong>, can upload a file containing maximum of200 PANs (file structure as specified by <strong>NSDL</strong>). Within 24 hours, a responsefile containing details of the PANs will be made available to the User. Incase, file format is incorrect, the rejection will be made available within24 hours. The Users can download the response at anytime as per their[ 55 ]
convenience upto 15 days, by login at the given website link.(3) Software [Application Programming Interface (API)] based PANverification:The facility is an interface that allows the User to make an onlineverification of PAN by accessing the verification-site through a softwareapplication. User would be provided with the URL for this purpose.Response to the User:(i) In case of valid PAN, name of the PAN holder, last date of PAN update asper ITD database and the status as "existing and valid" will be displayed.If the PAN is a fake PAN as per ITD database, the status will be shown as"Fake PAN".(ii) In case the PAN is not found in database, the response will be "not inITD database". In such cases, if the User is able to provide a proof ofthis PAN (copy of PAN card or PAN allotment letter) to <strong>NSDL</strong>, it will beforwarded to ITD for investigation.For further information on charges and procedure for registration, DPs canvisit the TIN website of <strong>NSDL</strong> at http://www.tin-nsdl.com and click on 'OnlinePAN verification launched' or contact Mr.Ashish Verma (email idashishv@nsdl.co.in) / Ms.Aditi Joshi (email id aditij@nsdl.co.in) on Tel.No. (022) 2499 4216 / 4226.DPs are also advised to ensure compliance with the various guidelines/circularsissued by SEBI and <strong>NSDL</strong> from time to time with respect to PAN.Circular No.Sub : Restriction in modification of PAN of a holder once PAN flag is<strong>NSDL</strong>/POLICY/enabled in DPMAS and penalty thereof for modification2007/0045 Attention of all Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular Nos.Date: August 2, 2007 <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006 and <strong>NSDL</strong>/POLICY/2006/0012dated March 25, 2006 wherein DPs were informed about the SEBI directive onmaking PAN compulsory and activation of PAN Flag on DPM Application Software(DPMAS).All DPs are hereby informed that with effect from September 1, 2007, DPswill be restricted from modifying the PAN of a holder in a Client account inDPMAS, once the PAN flag has been enabled. However, from that date, a DPmay approach <strong>NSDL</strong> for modifying the incorrect PAN captured in the DPMASwhere PAN flag has been enabled. A penalty of Rs. 500 will be levied on DPsfor modification of PAN for each holder unless the reasons for modificationare beyond the control of the DP. This penalty will be included in the monthlybills. DPs are advised to submit the request for modification as per the followingformat:Sr. No. DP ID Client ID Account Holder Indicator (e.g., For FirstHolder-1 /Second Holder - 2/Third Holder - 3)12It may be added that with effect from September 1, 2007, PAN flag for aholder once enabled (ticked) will not be allowed to be disabled.[ 56 ]
Circular No.Sub : SEBI Circular on Permanent Account Number (PAN) - PAN to be sole<strong>NSDL</strong>/POLICY/identification number for all transactions in the securities market2007/0026 Attention of Depository Participants is invited to SEBI Circular No. MDR/DoP/Date: May 10, 2007 Cir-05/2007 dated April 27, 2007 regarding Permanent Account Number to besole identification number for all transactions in the securities market. Acopy of the SEBI circular is enclosed for information and necessary action.Your attention is drawn particularly to Para 3 of the circular forimplementation. Please ensure that your internal auditors comment on theimplementation of this circular in their internal audit report starting fromquarter ending June 2007, to be submitted by September 30, 2007.AnnexureGENERAL MANAGERMarket Regulation Department-Division of PolicyE-mail: mdrao@sebi.gov.inTel: 022-2644 93701. The Executive Directors/Managing Directors/Administrators of All Stock Exchanges2. Chairman & MD, <strong>NSDL</strong>3. MD & CEO, CDSL4. All SEBI registered intermediariesMRD/DoP/Cir- 05/2007April 27, 2007Dear Sir / Madam,Sub: Permanent Account Number (PAN) to be the sole identification number for all transactionsin the securities market1. The Hon'ble Finance Minister, in his announcement in the Union Budget for the year 2007-08, hasproposed, inter-alia, to make PAN the sole identification number for all participants in the securitiesmarket with an alpha-numeric prefix or suffix to distinguish a particular kind of account.2. In the light of the aforesaid announcement and in order to strengthen the Know Your Client (KYC)norms and identify every participant in the securities market with their respective PAN therebyensuring sound audit trail of all the transactions, it has been decided that PAN would be the soleidentification number for all participants transacting in the securities market, irrespective of theamount of transaction.3. The intermediaries are advised in this regard as under:-3.1 to put in the necessary systems in place so that all the individual databases of their clientsand clients' transactions are linked to the PAN details of the client with which detailedanalysis can be made.3.2 to build the necessary infrastructure for enabling accessibility and query based on PANthereby enabling retrieval of all the details of the clients that is available including thetransactions done by them.[ 57 ]
3.3 to collect copies of PAN cards issued to their existing as well as new clients by the IncomeTax Department and maintain the same in their record after verifying with the original.3.4 to cross-check the aforesaid details collected from their clients with the details on thewebsite of the Income Tax Department i.e. http://incometaxindiaefiling.gov.in/challan/enterpanforchallan.jsp.4. The Stock Exchanges and Depositories are advised to :-4.1 put in place the necessary infrastructure so as to facilitate query based on PAN for retrievingdetails of all the clients/clients' transactions done in their respective systems.4.2 make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision immediately.4.3 bring the provisions of this circular to the notice of the member brokers/clearing membersof the Exchange and depository participants of the Depositories and also to disseminate thesame on the website.4.4 communicate to SEBI, the status of the implementation of the provisions of this circular inthe Monthly Development Report.5. The above shall come into force with effect from July 02, 2007.6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securitiesand Exchange Board of India Act, 1992, and Section 19 of the Depositories Act, 1996 to protect theinterests of investors in securities and to promote the development of, and to regulate the securitiesmarket.Yours faithfully,S V Murali Dhar RaoCircular No.Sub : Clarification-Operation of depository accounts in frozen status<strong>NSDL</strong>/POLICY/due to non- compliance with SEBI directive on PAN requirement2007/0008 Depository Participants (DPs) have been seeking clarifications with respectDate: February 2, 2007 to activities that can be performed in the DPM application Software (DPMAS)in regard to depository accounts (Beneficial Owner) which are frozen(Suspended for Debit) due to non- compliance with SEBI directive on PANrequirement. In this regard, <strong>NSDL</strong> has prepared a list of activities that a DPcan perform in the DPMAS with respect to such accounts, which is givenbelow:Sr. No Activities to be performed in the Y indicates : canDPMAS with respect of depository be performedaccounts which are frozen due to N indicates : cannotnon compliance with SEBI be performeddirective on PAN(1) Dematerialisation(i) Demat initiation Y(ii) Demat Confirmation / Rejection byRegistrar & Transfer Agent (R&T Agent)Y(iii) Demat cancellation N[ 58 ]
Sr. No Activities to be performed in the Y indicates : canDPMAS with respect of depository be performedaccounts which are frozen due to N indicates : cannotnon compliance with SEBI be performeddirective on PAN(2) Rematerialisation / Repurchase(i) Remat initiation N(ii) Remat Confirmation / Rejection byR & T Agent (for instruction initiatedbefore freezing the account)Y(iii) Remat cancellation N(3) Client Modifications(i) Change of address, bank details,standing instruction etc.(4) Account Transfer and Inter-Depository Transfer (IDT) (deliveryinstruction as well receiving credits)(i) Debit to Beneficial owner (BO) account N(ii) Credit to BO account arising out ofmarket /off market / IDTY(5) Account Transfer and Inter-Depository Transfer (IDT) (ReceiptInstruction, if standing instructionis not enabled)(i) Initiate Receipt instruction Y(ii) Initiate cancellation of ReceiptinstructionY(6) Pledge Pledgor’s Pledgee’saccount is account isfrozen active /frozen(i) Initiation N -(ii) Confirmation - Y(iii) Cancellation (for instructioninitiated prior to account beingfrozen and pledgee having notconfirmed the same) Y -(iv) Rejection - Y(v) Closure (Normal / Unilateral) Y Y(vi) Invocation - YFurther, DPs are requested to take note of the below activities that can beexecuted by the Issuers / R & T Agent with respect to depository accountsthat are frozen due to non-compliance with PAN requirements.Y[ 59 ]
Sr. No Activities executed by the R & T Y indicates : canAgent pertaining to Corporate Action be performed(CA) and Auto Corporate Action (ACA) N indicates : cannotwith few examplesbe performed1 CA – Credits YEg. preferential issue, ESOP, rights issue,IPO credits, scheme of amalgamation, etc.2 CA – Debits NEg. buyback, debit for conversion ofpartly paid shares to fully paid-upshares, redemption arising out ofcall/put, debit for incorporation oflock-in, debit for conversion ofwarrants into equity shares, forfeitureof shares, etc.3. Bonus ACA Y4. ACA YEg. sub-division, capital reduction,scheme of amalgamation, consolidation,etc.5. Redemption ACA N*Eg. redemption of debentures,commercial paper, certificate ofdeposits, bonds, etc.*When the status of the account is changed from "Suspended for debit" to"Active", the redemption will be initiated during BOD of the next businessday on change of status thereof.Circular No.Sub : Clarification-SEBI directive on PAN-Regarding freezing and<strong>NSDL</strong>/POLICY/unfreezing of Client accounts2006/0068 Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/Date: December 29, POLICY/2006/0062 dated December 20, 2006 wherein system, operational2006 and general guidelines with respect to freezing of Client accounts wereinformed to DPs.In this regard, clarification sought by DPs (given in italics below) and <strong>NSDL</strong>’sresponse is given hereunder :Issues to be addressed before December 31, 2006 :1) What will happen to the Client accounts that are already in frozen(Suspended for Debit) status on account of instruction received fromClient in physical or through SPEED-e, on the direction of StatutoryAuthority etc ?If the Client accounts are already frozen through DPM ApplicationSoftware (DPMAS) or SPEED-e as per the case cited, the two utilitiesviz. Bulk Account Freeze and File Converter will still allow the DP toinitiate the freeze instructions for such accounts, however, suchinstructions will fail in the BOD of January 1, 2007.In this regard, DPs are requested to refer point no. (II) (5) of Circular[ 60 ]
No. <strong>NSDL</strong>/POLICY/2006/0062 dated December 20, 2006 which isreproduced for the ready reference of DPs:“Client accounts that are already frozen (“Suspended for Debit”)through DPMAS or SPEED-e) as on December 31, 2006, DPs should ensurethat such frozen accounts are in compliance with Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006. If such Client accounts getsunfreezed and do not comply with PAN requirements, DPs are advisedto freeze the accounts until the Client submits the PAN card and the DPduly verifies the same as mentioned in various <strong>NSDL</strong> circulars on PAN”.2) Will the bulk cancellation utility facilitate the DP to cancel thefuture dated freeze instructions executed through the two utilities?It is hereby clarified that the bulk cancellation utility provided by <strong>NSDL</strong>Helpdesk will facilitate to cancel only those freeze instructions initiatedthrough the two freeze utilities till the End Of the Day of December 29and 30, 2006. From January 1, 2007 onwards, DPs will have to initiateunfreeze instruction for accounts that are in frozen status, providedsuch accounts comply with PAN requirements.3) Whether PAN requirement is applicable to Clearing Memberaccounts?It is hereby clarified that DPs should initiate freeze instructions only inrespect of Beneficial Owner accounts that do not comply with SEBIdirective on PAN requirements.Issues to be addressed after December 31, 2006:1) Procedure to be followed in respect of closure of Client accountsthat are frozen due to non-compliance of PAN requirements:On receipt of Closure requests from Clients, it is hereby clarified thatin case of Client accounts with :(i) Zero balances : DPs can unfreeze and close the Client accounts.(ii) Securities Position : DPs can only unfreeze the Client accountsprovided the Client(s) has provided the photocopy of the PANcard and DP has verified the PAN details as per the procedure laiddown in Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3,2006.2) Will DPMAS allow to make changes to demographic details such aschange of address, change in bank details etc. after the account isfrozen (from January 1, 2007)?It is hereby clarified that DPMAS will allow the DP to make changes todemographic details for Client accounts that are in frozen status.3) Procedure to be followed by DP when the Client(s) complies withPAN requirement?It is further clarified that upon the Client submitting the PAN card, DPsshould follow the procedure in the below given sequence:(i) Verify the PAN details as per the laid down procedure in CircularNo. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006,[ 61 ]
(ii) Update the PAN field and enable the PAN flag provided in theDPMAS. Ensure that the status of the updation is ‘Closed,Settled’.(iii) Remove the suspension by initiating unfreeze instruction andensure that the status of the unfreeze instruction is‘Closed,Settled’ prior to executing any other instruction in theDPMAS.Circular No.Sub : SEBI circular on Permanent Account Number (PAN) - Extention of<strong>NSDL</strong>/POLICY/deadline2006/0043 Attention of Participants is invited to Circular No. <strong>NSDL</strong>/POLICY/2006/0007Date: September 27, dated March 3, 2006, regarding SEBI directive on Permanent Account Number2006 (PAN).In this regard, SEBI has vide its Circular No. MRD/DoP/Dep/SE/Cir-13/06 datedSeptember 26, 2006 decided to extend the deadline for capturing PAN detailsto December 31, 2006. Further, SEBI has decided to withdraw the grace periodof 30 days as stated in para 4.1 of SEBI Circular No. MRD/DoP/Dep/Cir-09/06dated July 20, 2006. A copy of the SEBI Circular is enclosed for informationand necessary action.GENERAL MANAGERMARKET REGULATION DEPARTMENT1. All Stock Exchanges2. <strong>NSDL</strong>3. CDSL4. All CustodiansAnnexureMRD/DoP/Dep/SE/Cir-13/06September 26, 2006Dear Sirs,Sub: Mandatory requirement of Permanent Account Number (PAN) - Issues andclarifications1. This is further to SEBI Circular No. MRD/DoP/SE/Cir-8/2006 dated July 13, 2006 making, interalia,PAN mandatory for trading in the cash market with effect from October 1, 2006 and SEBICircular No. MRD/DoP/Dep/Cir-09/06 dated July 20, 2006 offering clarifications pertaining toMandatory requirement of PAN for operating Beneficiary Owner Account (BO) in the depositorysystem.2. Subsequent to the issue of above-referred SEBI Circulars, market participants have made furtherrepresentations and suggestions and sought clarifications on the various issues from SEBI.3. The further representations made and clarifications sought covered mainly the following aspects:3.1 Exemption from the requirement of verification with the original PAN Card in respect of theinstitutional clients. Some of the brokers have expressed difficulty in verifying the PAN ofinstitutional clients with the original PAN card as they are dealing through the custodiansand not directly with their clients.[ 62 ]
3.2 Some of the Investors have represented to SEBI seeking exemption for the joint accountholders from the mandatory requirement of PAN.3.3 Requests have also been received from various market participants for extending the presentdeadline of September 30, 2006 due to the following reasons:• Some of the BOs have PAN but not the PAN Card.• Many others have PAN Allotment Letter and have applied for duplicate PAN Card asearlier PAN card was reportedly not issued by the Income Tax Department.• Many investors have applied for PAN but have not received the same.• In respect of many investors, PAN has been captured, but verification is in process.3.4 Further, brokers have requested that clarifications issued by SEBI vide SEBI Circular No.MRD/DoP/Dep/Cir-09/06 dated July 20, 2006 may be made applicable to trading in the cashmarket also.4. Upon careful consideration of the representations and discussions with the market participants,the clarifications are as under :4.1. In view of the difficulties expressed by the stock brokers in verifying the PAN of theinstitutional clients with the original PAN card, the custodians are advised to verify the PANdetails of the institutional clients with the original PAN card and provide copy of such verifiedPAN details to the brokers duly certified. This would be applicable in respect of institutionalclients, namely, FIIs, MFs, VCFs, FVCIs, Scheduled Commercial Banks, Multilateral and BilateralDevelopment Financial Institutions, State Industrial Development Corporations, InsuranceCompanies registered with IRDA and Public Financial Institution as defined under section 4Aof the Companies Act, 1956.4.2. In the light of the practical difficulties expressed by various market participants as detailedabove in adhering to the present deadline of September 30, 2006, the present deadline hasbeen extended to December 31, 2006, as a one time measure.4.3. The clarification contained in para 4.1 of the SEBI Circular No. MRD/DoP/Dep/Cir-09/06dated July 20, 2006 providing a grace period of 30 days to the entities registered with SEBIu/s 12 of the SEBI Act, 1992 stands withdrawn.4.4. The clarifications as contained in Paras 4.2 to 4.9 of the SEBI Circular No. MRD/DoP/Dep/Cir-09/06 dated July 20, 2006 are also applicable to trading in the cash market. A copy ofthe said circular is enclosed as Annexure I.5. The Depositories are advised to:-5.1. Bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website;5.2. Include the aforesaid clarifications, as applicable, in the advertisement campaigns releasedby them from time to time for better understanding of the investors;5.3. Make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary;5.4. Communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report.[ 63 ]
6. The Stock Exchanges are advised to :6.1. Make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision immediately.6.2. Bring the provisions of this circular to the notice of the member brokers/clearing membersof the Exchange and also to disseminate the same on the website.6.3. Communicate to SEBI, the status of the implementation of the provisions of this circular inSection II, item no. 13 of the Monthly Development Report.7. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,V.S. SUNDARESANAnnexure IGENERAL MANAGERMARKET REGULATION DEPARTMENTMRD/DoP/Dep/Cir-09/06July 20, 2006The Chairman & Managing DirectorThe Managing Director & CEONational Securities Depository Ltd.Central Depository Services (India) Ltd.Trade World,Phiroze Jeejeebhoy Towers,Kamala Mills Compound,Dalal Street, Fort,Senapati Bapat Marg, Lower Parel, Mumbai 400 023Mumbai - 400 013Dear Sirs,Sub: Mandatory requirement of Permanent Account Number (PAN) - Issues andclarifications1. This has reference to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 03, 2006 and CDSLCommuniqué No. CDSL/OPS/ DP/657 as well as CDSL/OPS/DP/666 dated February 07, 2006 andMarch 08, 2006, respectively, on the captioned subject.2. During the course of implementation of the aforesaid requirement, certain operational issueshave arisen and accordingly, the market participants have made representations and suggestionsand sought clarifications on the various operational issues from SEBI.3. The representations made and clarifications sought covered the following aspects:• Exemption to certain categories of entities registered with SEBI and verification of documentsfor proof of address.• Exemption to Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs).[ 64 ]
• Exemption to persons having PAN but not the PAN card.• Exemption to UN entities and multilateral agencies which are exempted from paying taxes/filing tax returns in India.• Exemption to investors residing in the State of Sikkim.• Verification of PAN card details in respect of accounts opened for HUF, AoP, PartnershipFirm, Minor, etc.• Verification of PAN card details wherever slight mismatch appears as well as where there isa difference in maiden name and current name of the investors.4. Upon careful consideration of the representations and discussions with the market participants,the clarifications are as under :4.1. All entities registered with SEBI under Section 12 of the SEBI Act, 1992 and having somedifficulty in producing PAN card for verification at the time of opening the BeneficiaryOwner (BO) account may be permitted to open a BO account without producing the PANcard. However, such entities would be required to submit the PAN card to the DepositoryParticipants (DPs) within a period of 30 days from the date of opening of the BO account forverification, failing which the DPs shall freeze such accounts as "Suspended for Debit" tillsuch time the PAN card is produced for verification.4.2. As regards proof of address of FIIs/sub-accounts, a copy of the Power of Attorney (POA)given by the FIIs/FII sub-accounts to the Custodians (which are duly notarized and/or apostiledor consularised) that gives the registered address of the FIIs/sub-accounts can be acceptedas proof of address.4.3. The NRIs/PIOs would be required to comply with the mandatory requirement of producingPAN Card at the time of opening a BO account. However, such NRIs/PIOs who are not able toobtain PAN for one reason or the other but are holding securities in physical form and desireto sell the same, may be permitted to open a "limited purpose BO account" without PAN.The operation of such BO accounts shall be subject to the following conditions :• These accounts will be "suspended for credit", which means, only credits arising out ofcorporate benefits and demat of physical certificates will be permitted.• These accounts cannot be used for getting credit from IPOs, off-market transactionsor any secondary market transactions, etc.• These accounts can remain operational only for a limited period of 6 months from thedate of opening of the account. Meanwhile, the account holders may be permitted toconvert the account into a normal BO account subject to complying with the PANrequirements. If the Account holder fails to produce the PAN card within the stipulatedperiod of 6 months, the DPs shall freeze such BO accounts.• The account holders shall be permitted to sell the securities lying in these accountsonly through a registered broker on the stock exchange.4.4. U.N. entities/multilateral agencies which are exempt from paying taxes/filing tax returnsin India are exempted from the mandatory requirement of PAN. The exemption, however,would be subject to the DPs collecting documentary evidence in support of such claim ofthe investors.4.5. Any investor who has PAN but not having the PAN card may be permitted to open BO Accountssubject to producing the PAN allotment letter. However, such investors would be requiredto produce the PAN Card on or before September 30, 2006 failing which the DPs shall freezesuch accounts as "Suspended for Debit" till PAN card is produced for verification.[ 65 ]
4.6. In case of HUF, Association of Persons (AoP), Partnership Firm, Unregistered Trust, etc. --though the BO account would be in the name of natural persons, PAN of the respective HUF,AoP, Partnership Firm, Unregistered Trust, etc shall be obtained.4.7. As regards Registered Trust, Corporate Bodies and minors, PAN of the respective entitiesshall be obtained when accounts are opened in their respective names.4.8. In case where there is difference in the maiden name and current name of the investor(predominantly in the case of married women), DPs can collect the PAN card proof assubmitted by the account holder. However, this would be subject to the DPs verifying theveracity of the claim of such investors by collecting sufficient documentary evidence insupport of the identity of the investors as provided in the SEBI Circular No. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.4.9. In the light of the observations of the Hon'ble High Court of Sikkim in its Order dated March31, 2006 as forwarded by the Sikkim Chamber of Commerce vide their letter No.See/52/06-07 dated May 11, 2006, the investors residing in the State of Sikkim are exempted from themandatory requirement of PAN. However, this would be subject to the DPs verifying theveracity of the claim of the investors that they are residents of Sikkim, by collecting sufficientdocumentary evidence in support of their address as provided in the SEBI Circular No.MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.5. The Depositories are advised to:-5.1. Bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website;5.2. Include the aforesaid clarifications in the advertisement campaigns released by them fromtime to time for better understanding of the investors;5.3. Put up all such communications which may be useful for investors at large on their websites;5.4. Ensure that proof of address (POA) is collected for all the account holders as is being donein the case of Proof of Identity (POI).5.5. Make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary;5.6. Communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report for the month of August, 2006.6. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Circular No.Sub : Clarification - Processing of Account opening documents and<strong>NSDL</strong>/POLICY/verification of PAN details2006/0040 Attention of Participants is invited to Circular no. <strong>NSDL</strong>/POLICY/2006/0007Date : September 18, dated March 3, 2006 regarding SEBI directive on PAN. In this regard,2006 clarification sought by Participants (given in italics below) and <strong>NSDL</strong>’s responseis given hereunder :(i) Whether a non-NCFM (NSE’s certification in financial markets - <strong>NSDL</strong>-Depository Operations Module) qualified staff of the Participant canverify the PAN details as well as the account opening documents of theClients ?[ 66 ]
(ii)It is clarified that an employee (staff) of the Participant irrespective ofNCFM qualification can verify the account opening documents as wellas follow the various procedures mentioned in the above circular withrespect to verification of PAN details of the Clients. However, Participantsshall continue to comply with the NCFM requirement as per CircularNo. <strong>NSDL</strong>/PI/2003/1047 dated June 25, 2003.Whether a Participant needs to obtain a separate written request fromthe existing Clients for updation of PAN details in the DPM ApplicationSoftware (DPMAS) ?It is clarified that no such separate written request (letter) is requiredto be obtained from the existing Clients for updation of PAN details inthe DPMAS. Participants should have the necessary documents andfollow the procedure as mentioned in our Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006.(iii) If the photocopy of PAN of the Client(s) obtained as proof of identity(POI), verified with the original and already captured in the DPMAS atthe time of opening the account prior to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006, whether Participants are onceagain required to obtain the PAN details from the Client(s)?If Participants have already obtained the PAN details as POI from theirClient(s), verified the same with the originals and captured in the DPMAS,it is clarified that Participants need not obtain the PAN details from theClient(s) once again provided the PAN details so captured have beenduly verified with the website of Income Tax Department and that thestaff of the Participant has affixed a stamp as ‘PAN verified’, on thephotocopy of the PAN card(s), as mentioned in our Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006.Circular No.Sub : Operating guidelines on SEBI circular providing clarifications on<strong>NSDL</strong>/POLICY/PAN2006/0031 Attention of Participants is invited to circular no. <strong>NSDL</strong>/POLICY/2006/0007Date: August 9, 2006 dated March 3, 2006 regarding SEBI directive on PAN and Circular No. <strong>NSDL</strong>/POLICY/2006/0030 dated July 24, 2006 intimating the Participants about SEBIclarifications on PAN vide SEBI Circular no. MRD/DoP/Dep/Cir-09/06 datedJuly 20, 2006.Further to the clarification issued by SEBI (given in italics below), Participantsare advised to take note of the following additional operating guidelines /clarifications with respect to capturing of PAN details:(I) 4.1 All entities registered with SEBI under Section 12 of the SEBI Act,1992 and having some difficulty in producing PAN card for verification at thetime of opening the Beneficiary Owner (BO) account may be permitted toopen a BO account without producing the PAN card. However, such entitieswould be required to submit the PAN card to the Depository Participants(DPs) within a period of 30 days from the date of opening of the BO accountfor verification, failing which the DPs shall freeze such accounts as“Suspended for Debit” till such time the PAN card is produced for verification.[ 67 ]
<strong>NSDL</strong>’s operating guidelines:(a)(b)If a SEBI registered entity expresses its inability to produce the PANcard at the time of opening the BO account, Participants are requiredto obtain a photocopy of SEBI Registration Certificate and verify thesame with the original, open the account, capture the description“INTERMEDRY” under the PAN field and enable the PAN flag.If the entity does not submit the PAN card within 30 days from the dateof opening the account, Participants are advised to disable the PAN flagand suspend the account for debit.(c) If the entity submits the PAN card, Participants should :(i)(ii)Verify the PAN details as per the laid down procedure and enablethe PAN Flag in the DPM Application Software (DPMAS); andRemove the suspension.(II) 4.2 As regards proof of address of FIIs/sub-accounts, a copy of the Powerof Attorney (POA) given by the FIIs/FII sub-accounts to the Custodians (whichare duly notarized and/or apostiled or consularised) that gives the registeredaddress of the FIIs/sub-accounts can be accepted as proof of address.No further guidelines in this regard.(III) 4.3 The NRIs/PIOs would be required to comply with the mandatoryrequirement of producing PAN Card at the time of opening a BO account.However, such NRIs/PIOs who are not able to obtain PAN for one reason orthe other but are holding securities in physical form and desire to sell thesame, may be permitted to open a “limited purpose BO account” withoutPAN. The operation of such BO accounts shall be subject to the followingconditions :These accounts will be “suspended for credit”, which means, onlycredits arising out of corporate benefits and demat of physicalcertificates will be permitted.These accounts cannot be used for getting credit from IPOs, off-markettransactions or any secondary market transactions, etc. These accounts can remain operational only for a limited period of 6months from the date of opening of the account. Meanwhile, theaccount holders may be permitted to convert the account into a normalBO account subject to complying with the PAN requirements. If theAccount holder fails to produce the PAN card within the stipulatedperiod of 6 months, the DPs shall freeze such BO accounts.The account holders shall be permitted to sell the securities lying inthese accounts only through a registered broker on the stock exchange.<strong>NSDL</strong>’s operating guidelines:(a)If NRIs/PIOs express their inability to produce the PAN card at the timeof opening of a BO account, Participants may open the account, capturethe description “NRICATEGRY” under PAN field and enable the PANflag. Also, standing instructions should not be enabled for such accounts.[ 68 ]
(b)If the entity does not submit the PAN card within the stipulated time ofsix months from the date of activation of accounts, Participants areadvised to disable the PAN Flag and suspend the account for debit.(c) If the entity submits the PAN card, Participants should :(i) Verify the PAN details as per the laid down procedure and enablethe PAN Flag in the DPMAS;(ii) Enable the standing instructions, as per the request of the entity;and(iii) Remove the suspension.(IV) 4.4 U.N. entities/multilateral agencies which are exempt from payingtaxes/filing tax returns in India are exempted from the mandatoryrequirement of PAN. The exemption, however, would be subject to the DPscollecting documentary evidence in support of such claim of the investors.<strong>NSDL</strong>’s operating guidelines:After the Participants are satisfied that such entities are exempt from payingtaxes/filing tax returns in India, Participants are advised to capture thedescription “EXEMPTCATG” under the PAN field and enable the PAN flag inDPMAS.(V) 4.5 Any investor who has PAN but not having the PAN card may bepermitted to open BO Accounts subject to producing the PAN allotment letter.However, such investors would be required to produce the PAN Card on orbefore September 30, 2006 failing which the DPs shall freeze such accountsas “Suspended for Debit” till PAN card is produced for verification.<strong>NSDL</strong>’s operating guidelines:(a)Participants may open the BO account based on the PAN allotment letterissued by the Income Tax Department (ITD) and after due verificationwith the ITD website as per the procedure mentioned in <strong>NSDL</strong> circularno. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006, capture thedescription “ALOTMNTLTR” under PAN field and enable the PAN flag.Further, Participants should call for any additional documents and / orclarification to ascertain and satisfy itself about the identity of theentity, as clarified in the SEBI circular.(b) If the entity does not submit the PAN card before September 30, 2006,Participants should disable the PAN flag and suspend the account fordebit.(c) If the entity submits the PAN card, Participants should :(i) Verify the PAN details as per the laid down procedure and enablethe PAN Flag in the DPMAS; and(ii) Remove the suspension.(VI) 4.6 In case of HUF, Association of Persons (AoP), Partnership Firm,Unregistered Trust, etc. –- though the BO account would be in the name ofnatural persons, PAN of the respective HUF, AoP, Partnership Firm,Unregistered Trust, etc shall be obtained.[ 69 ]
No further guidelines in this regard.(VII) 4.7 As regards Registered Trust, Corporate Bodies and minors, PAN ofthe respective entities shall be obtained when accounts are opened in theirrespective names.No further guidelines in this regard.(VIII) 4.8 In case where there is difference in the maiden name and currentname of the investor (predominantly in the case of married women), DPs cancollect the PAN card proof as submitted by the account holder. However,this would be subject to the DPs verifying the veracity of the claim of suchinvestors by collecting sufficient documentary evidence in support of theidentity of the investors as provided in the SEBI Circular No. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.<strong>NSDL</strong>’s operating guidelines:(a)(b)(c)This guidance given by SEBI may also be used whenever there is a minordifference in the name mentioned in the PAN Card and the name inwhich the account is opened / sought to be opened.Photograph of person appearing on the PAN card can be compared withthe account holder and/or the photograph submitted by the accountholder alongwith the application form. Father’s name if available onthe application form can be compared with the father’s name appearingon the PAN card of the account holder.Participants should call for any additional documents and / orclarification to ascertain and satisfy itself about the identity of theentity, as clarified in the SEBI circular.An illustrative list of minor difference in the names is enclosed.(IX) 4.9 In the light of the observations of the Hon’ble High Court of Sikkimin its Order dated March 31, 2006 as forwarded by the Sikkim Chamber ofCommerce vide their letter No.See/52/06-07 dated May 11, 2006, theinvestors residing in the State of Sikkim are exempted from the mandatoryrequirement of PAN. However, this would be subject to the DPs verifying theveracity of the claim of the investors that they are residents of Sikkim, bycollecting sufficient documentary evidence in support of their address asprovided in the SEBI Circular No.MRD/DoP/Dep/Cir-29/2004 dated August24, 2004.<strong>NSDL</strong>’s operating guidelines:(a)(b)Participants should ascertain that the entity resides in the state ofSikkim and if satisfied, capture the description “SIKKIMCATG” underthe PAN field and enable the PAN flag.If an entity makes a request for capturing the correspondence addressas default address or submits a request for change of address and theaddress in both these situations is not of Sikkim, in such a case, theentity must comply with the PAN requirements and till such time shoulddisable the PAN flag and suspend the account for debit .[ 70 ]
(c) If the entity submits the PAN card, Participants should :(i) Verify the PAN details as per the laid down procedure and enablethe PAN Flag in the DPMAS; and(ii) Remove the suspension.AnnexureAn illustrative list of minor differences as mentioned in Point no. 4.8 of SEBICircular. Participants should follow <strong>NSDL</strong> operating guidelines mentioned after4.8 of Circular No. <strong>NSDL</strong>/POLICY/2006/0031 dated August 9, 2006.Sushil Kumar ShahSushil K ShahSushil ShahSushil KumarSushilSushilbhai K Shah/Sushilbhai KumarShah / Sushilbhai / Sushilbhai ShahPinki Parmar Desai (Maiden Name) Pinki Rasiklal Shah (Married Name)Tulsi Shah (name change pursuantto marriage)Sunshine India Private Limited Sunshine India Pvt Ltd / SunshineIndia P LtdSunshine (I) P LtdSunshine Private LimitedTulip Mauritius Limited Growing Tulip Mauritius Limited G S C ISoftware Companies India Fund FUNDTulip Mauritius Growing SoftwareCompanies India FundT M L G S C I FundTulip Mauritius Limited Grow Soft(Truncated)1) Short form for Technology Fund / Equity Fund mentioned as Tech Fd /Eq Fd.2) Spelling mistakes in the name viz., Shushil Kumar Shah for Sushil KumarShah, Fledging Nominee for Fledgeling Nominees.3) PAN card does not mention the scheme name but mentions the name ofthe Mutual Fund.4) PAN card mentions only the FII name and not the name of sub-account.Account opened for a specific purpose i.e., "ABC Escrow a/c" while the nameon PAN card is "ABC Ltd".Circular No.Sub : SEBI circular providing clarification on Permanent Account Number<strong>NSDL</strong>/POLICY/(PAN)2006/0030 Attention of Participants is invited to circular no. <strong>NSDL</strong>/POLICY/2006/0007Date: July 24, 2006 dated March 3, 2006, regarding SEBI directive on PAN.In this regard, SEBI has vide its circular no. MRD/DoP/Dep/Cir-09/06 datedJuly 20, 2006 issued certain clarifications on PAN which are enclosed forguidance to the Participants.[ 71 ]
AnnexureGENERAL MANAGERMARKET REGULATION DEPARTMENTMRD/DoP/Dep/Cir-09/06July 20, 2006The Chairman & Managing Director The Managing Director & CEONational Securities Depository Ltd.Central Depository Services (India) Ltd.Trade World,Phiroze Jeejeebhoy Towers,Kamala Mills Compound,Dalal Street, Fort,Senapati Bapat Marg, Lower Parel, Mumbai 400 023Mumbai – 400 013Dear Sirs,Sub: Mandatory requirement of Permanent Account Number (PAN) – Issues andclarifications1. This has reference to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 03, 2006 and CDSLCommuniqué No. CDSL/OPS/ DP/657 as well as CDSL/OPS/DP/666 dated February 07, 2006 andMarch 08, 2006, respectively, on the captioned subject.2. During the course of implementation of the aforesaid requirement, certain operational issueshave arisen and accordingly, the market participants have made representations and suggestionsand sought clarifications on the various operational issues from SEBI.3. The representations made and clarifications sought covered the following aspects:✧✧✧✧✧✧Exemption to certain categories of entities registered with SEBI and verification of documentsfor proof of address.Exemption to Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs).Exemption to persons having PAN but not the PAN card.Exemption to UN entities and multilateral agencies which are exempted from paying taxes/filing tax returns in India.Exemption to investors residing in the State of Sikkim.Verification of PAN card details in respect of accounts opened for HUF, AoP, PartnershipFirm, Minor, etc.✧ Verification of PAN card details wherever slight mismatch appears as well as where there isa difference in maiden name and current name of the investors.4. Upon careful consideration of the representations and discussions with the market participants,the clarifications are as under :4.1. All entities registered with SEBI under Section 12 of the SEBI Act, 1992 and having somedifficulty in producing PAN card for verification at the time of opening the BeneficiaryOwner (BO) account may be permitted to open a BO account without producing the PANcard. However, such entities would be required to submit the PAN card to the DepositoryParticipants (DPs) within a period of 30 days from the date of opening of the BO account forverification, failing which the DPs shall freeze such accounts as “Suspended for Debit” tillsuch time the PAN card is produced for verification.[ 72 ]
4.2. As regards proof of address of FIIs/sub-accounts, a copy of the Power of Attorney (POA)given by the FIIs/FII sub-accounts to the Custodians (which are duly notarized and/or apostiledor consularised) that gives the registered address of the FIIs/sub-accounts can be acceptedas proof of address.4.3. The NRIs/PIOs would be required to comply with the mandatory requirement of producingPAN Card at the time of opening a BO account. However, such NRIs/PIOs who are not able toobtain PAN for one reason or the other but are holding securities in physical form and desireto sell the same, may be permitted to open a “limited purpose BO account” without PAN.The operation of such BO accounts shall be subject to the following conditions :✧✧✧These accounts will be “suspended for credit”, which means, only credits arising outof corporate benefits and demat of physical certificates will be permitted.These accounts cannot be used for getting credit from IPOs, off-market transactionsor any secondary market transactions, etc.These accounts can remain operational only for a limited period of 6 months from thedate of opening of the account. Meanwhile, the account holders may be permitted toconvert the account into a normal BO account subject to complying with the PANrequirements. If the Account holder fails to produce the PAN card within the stipulatedperiod of 6 months, the DPs shall freeze such BO accounts.✧ The account holders shall be permitted to sell the securities lying in these accountsonly through a registered broker on the stock exchange.4.4. U.N. entities/multilateral agencies which are exempt from paying taxes/filing tax returnsin India are exempted from the mandatory requirement of PAN. The exemption, however,would be subject to the DPs collecting documentary evidence in support of such claim ofthe investors.4.5. Any investor who has PAN but not having the PAN card may be permitted to open BO Accountssubject to producing the PAN allotment letter. However, such investors would be requiredto produce the PAN Card on or before September 30, 2006 failing which the DPs shall freezesuch accounts as “Suspended for Debit” till PAN card is produced for verification.4.6. In case of HUF, Association of Persons (AoP), Partnership Firm, Unregistered Trust, etc. –-though the BO account would be in the name of natural persons, PAN of the respective HUF,AoP, Partnership Firm, Unregistered Trust, etc shall be obtained.4.7. As regards Registered Trust, Corporate Bodies and minors, PAN of the respective entitiesshall be obtained when accounts are opened in their respective names.4.8. In case where there is difference in the maiden name and current name of the investor(predominantly in the case of married women), DPs can collect the PAN card proof assubmitted by the account holder. However, this would be subject to the DPs verifying theveracity of the claim of such investors by collecting sufficient documentary evidence insupport of the identity of the investors as provided in the SEBI Circular No. MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.4.9. In the light of the observations of the Hon’ble High Court of Sikkim in its Order dated March31, 2006 as forwarded by the Sikkim Chamber of Commerce vide their letter No.See/52/06-07 dated May 11, 2006, the investors residing in the State of Sikkim are exempted from themandatory requirement of PAN. However, this would be subject to the DPs verifying theveracity of the claim of the investors that they are residents of Sikkim, by collecting sufficientdocumentary evidence in support of their address as provided in the SEBI Circular No.MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004.[ 73 ]
5. The Depositories are advised to:-5.1. Bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website;5.2. Include the aforesaid clarifications in the advertisement campaigns released by them fromtime to time for better understanding of the investors;5.3. Put up all such communications which may be useful for investors at large on their websites;5.4. Ensure that proof of address (POA) is collected for all the account holders as is being donein the case of Proof of Identity (POI).5.5. Make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary;5.6. Communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report for the month of August, 2006.6. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfullyV. S. SUNDARESANCircular No.Sub: Clarification - Capturing PAN in case of HUF and minor accounts<strong>NSDL</strong>/POLICY/Attention of Participants is invited to circular no. <strong>NSDL</strong>/POLICY/2006/00072006/0028 dated March 3, 2006, regarding SEBI directive on PAN. Participants haveDate : July 18, 2006 been seeking clarification from <strong>NSDL</strong> regarding capturing of PAN details withrespect to HUF and Minor accounts.In this regard, Participants are advised that for HUF accounts, PAN details ofthe HUF and for Minor accounts, PAN details of the Minor should be captured.Participants should obtain a photocopy of the PAN card of the HUF / Minor, asthe case may be, verify the same with the original PAN card and follow theprocedure mentioned in the above mentioned Circular.Circular No.Sub : Discrepancy in the PAN details captured by the Participants<strong>NSDL</strong>/POLICY/<strong>NSDL</strong> vide its circular nos. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006 and2006/0015 <strong>NSDL</strong>/POLICY/2006/0012 dated March 25, 2006, informed the ParticipantsDate: May 22, 2006 regarding SEBI directive on PAN as a mandatory requirement for demat accountsand the procedure for activating PAN flag on DPM Application Software(DPMAS).<strong>NSDL</strong> analysed the PAN details that were captured by the Participants duringthe month of April 2006. The following are the major discrepancies that havebeen observed:[ 74 ]
1. Invalid data i.e. “aaaaaaaaaa” or “123451233a” entered in the fieldprovided for PAN in the DPMAS and PAN flag activated for such accounts.2. Correct PAN details were captured in the DPMAS, but PAN flag was notactivated for such accounts.3. PAN details captured in DPMAS do not match/exist in the Income TaxDatabase i.e. website of Income Tax Department but PAN flag activated.<strong>NSDL</strong> provided the list of such cases to the Participants with an advice tocorrect the same. Participants have responded to <strong>NSDL</strong> stating that suchdiscrepancies have occurred due to inadvertent capturing of PAN details,typographical errors, PAN details captured from the application form thatwas different from the PAN Card submitted by the Client which was verifiedwith the website.In view of the foregoing, all Participants are hereby advised to be carefulwhile capturing PAN details and ensure that the guidelines provided in theaforesaid circulars in terms of capturing correct PAN details after dueverification and enabling the PAN flag are duly complied with.In case it is observed that discrepancies exist in the PAN details captured onor after May 1, 2006, <strong>NSDL</strong> would levy a penalty of Rs.100 per account.Circular No.Sub : Activation of PAN flag on DPM system<strong>NSDL</strong>/POLICY/Attention of Participants is invited to our circular no. <strong>NSDL</strong>/POLICY/2006/2006/0012 0007 dated March 3, 2006 wherein Participants were informed about the SEBIDate: March 25, 2006 directive on making Permanent Account Number (PAN) compulsory for allcategories of demat account-holders.Participants are further advised as follows:1 DPM Application Software (DPMAS) has been modified by making PAN asa ‘mandatory field’. This change is proposed to be released toParticipants from March 29-31, 2006. The schedule will be sent to theParticipants by <strong>NSDL</strong> Help Desk. Participants may note that after thisrelease, the accounts that are opened in DPMAS will require the PAN tobe mandatorily captured.2. Participants are advised to strictly follow the guidelines issued by <strong>NSDL</strong>vide aforesaid circular and ensure that the PAN details are captured inthe DPMAS only after they are duly verified with the Income TaxDepartment website.3. PAN flag for each of the holder has been introduced in the DPMAS.Participants are advised to ensure that after capturing the PAN details,the PAN flag(s) is/are also enabled.4. Participants are advised that in respect of the existing accounts, afterdue verification as mentioned above, the PAN flag in DPMAS should beenabled.5. Participants can avail the facility of bulk verify & release providedtheir back-office system is equipped with maker/checker facility. Thechanges in the file formats in respect of the back-office batch interfacewith the DPMAS is enclosed.[ 75 ]
c. Power of AttorneyAccount operation - Power of attorneyCircular No.Sub: Release of POA Module and its features<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that Power of Attorney2007/0054 (POA) module in the DPM Application Software (DPMAS) is scheduled for releaseDate: September in the first week of October 2007. The procedure to capture POA holder/22, 2007 Authorized Signatory signature and the changes in the back-office moduleand the file formats in respect of the back-office batch interface with theDPMAS are enclosed in Annexure-I. In this regard, DPs are advised to beready with their back-office compatible with POA Module. Compact Discs(CDs) containing the release of POA Module in the DPMAS and instructionsregarding upgradation will be sent to DPs by courier separately.It has been brought to the notice of <strong>NSDL</strong> that a number of DPs are offering e-broking services to its clients. This may necessitate execution of POA in favorof DP/broker to operate the client account. <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/PI/2003/0572 dated April 7, 2003 had advised the DPs to capture the signaturesof the account holder(s) as well as POA holder, if a POA holder is operating anaccount, in the DPMAS.At present, all signatures in client account are captured as a single image inthe DPMAS. As per aforesaid circular, DPs are required to do the following:1. In case POA holder is a individual entity, DP is required to scan thesignature of all the account holder(s) and POA holder in client accountwhere that Individual entity is a POA holder.2. In case POA holder is a corporate entity, DP is required to scan thesignatures of all authorized signatories and the account holder(s) inclient account where that corporate entity is a POA holder.Further, in case of change in authorised signatory or change in individualentity in whose favour POA is given, DP is required to rescan the signatures ofall authorized signatories or individual entity and the account holder(s) in allthe accounts where that corporate/individual entity is a POA holder. DPshave expressed practical difficulty in complying with the aforesaid circular,as it is a time consuming activity.To facilitate DPs to capture POA’s signature separately <strong>NSDL</strong> has decided tointroduce the POA module to supplement the client maintenance module inthe DPMAS for “Active/frozen” client accounts in DPMAS system.Features of POA module:a) Client’s Signature would continue to remain as a single image i.e., thesignature of all account holders would be scanned as a single image.However, POA holder’s (Authorized signatories in case of POA holderbeing a corporate or individual entity in whose favour POA is given)signature will be scanned separately and will not be a part of client’ssignature.b) Each POA holder and Authorized Signatory would be registered separatelyalong with his or her signature for which a unique id i.e., POA Id andAuthorized signatory Id respectively would be generated by DPMASsystem.[ 76 ]
c) The authorized signatories will be grouped to form a POA group (forPOA holder being a corporate) for which also a unique identificationnumber; POA Id, would be generated by DPMAS system.d) Identification number given to POA or POA group would be referred toas POA Id i.e., if POA is an individual, POA Holder Id would be POA Id. IfPOA is a corporate entity POA group id would be POA Ide) Every account holder who operates through a POA can be mapped tothis POA holder or POA group if POA is given to an individual holder orcorporate respectively.f) There can be more than one POA ID associated to each account holder.g) While registering POA Group, system will also provide for capturingminimum number of authorized signatories required to sign theinstruction slip. However, this is an information field to aid manualverification. System will not have any in-built validation for this field.h) If an Individual signatory is no more authorized to be an authorizedsignatory as a POA holder, then the mapping between POA-id of a POAholder and the account in case of an individual, and POA-id andauthorized signatory id in case of a corporate entity need to be removed.In case, a new signatory is to be inducted, then signature of the newsignatory only will be required to be scanned. Then in case of a POAholder of an individual account, a new POA id of the new POA holderwill be mapped to the account and in case of a corporate entity, newauthorized signatory id needs to be mapped to POA-id.i) POA details can be mapped to individual and corporate beneficiaryaccounts only. This facility will not be available for Clearing Membersand intermediary accounts.j) Screens are provided in DPMAS for registration/modification of IndividualPOA holder, Authorized Signatory, Corporate POA/POA Group andmapping of POA Id to account holder.Further, DPs are required to follow the guidelines issued vide circulars ref.no. <strong>NSDL</strong>/PI/2000/982 dated June 23, 2000, <strong>NSDL</strong>/PI/2000/1953 dated October19, 2000 and <strong>NSDL</strong>/PI/2005/2329 dated November 25, 2005 in this regard.It may be informed that for the purpose of explaining features of POA module,<strong>NSDL</strong> will conduct training at Mumbai, New Delhi, Kolkata and Chennai in themonth of October 2007. The details of the training will be communicated tothe DPs separately. A DPM user manual will also be provided to the DPs alongwith the CD of the software release. In case of any queries regarding fileformats you may write to helpdesk@nsdl.co.in.d. OthersCircular No.Sub: Reporting of OTC Transactions in Certificates of Deposit (CDs) and<strong>NSDL</strong>/POLICY/Commercial Papers (CPs).2010/0086 All Participants are hereby informed that SEBI has issued Circular No. CIR/Date: July 30, 2010 IMD/DF/6/2010 dated July 30, 2010 (copy enclosed) regarding reporting ofOTC transactions in CDs and CPs. The aforesaid SEBI circular specifies that ithas been decided that all SEBI Regulated entities shall report their OTCtransactions in CDs and CPs on the FIMMDA reporting platform within 15 minutes[ 77 ]
of the trade for online dissemination of market information with effect fromAugust 16, 2010. FIMMDA will issue detailed operational guidelines in thisregard.Participants are requested to take note of the same and ensure compliance.Circular No.Sub: Facility to download the list of depository accounts for KYC<strong>NSDL</strong>/POLICY/confirmation on SQLASSIST2009/0114 As all Participants are aware, a list of depository accounts for the purpose ofDate: December 3, 2009 reporting confirmation of KYC norms is being sent to Participants on afortnightly basis. It was further informed vide our circular no. <strong>NSDL</strong>/POLICY/2009/0034 dated May 7, 2009 that the KYC confirmation report in respect ofsuch depository accounts is to be uploaded on SQLASSIST intranet site of<strong>NSDL</strong> (i.e. http://sqlassist) under the option 'KYC'.In this context, a facility is now being made available on SQLASSIST under theoption "Download KYC" to download the list of depository accounts for whichKYC confirmation is to be reported to <strong>NSDL</strong>. The files will be made availableon the SQLASSIST within five days after the end of every fortnight (e.g., forthe fortnight 1st to 15th day of the month, the files will be made available by20th day of the month and for the fortnight 16th to the end of the month, thefiles will be made available by 5th of the subsequent month). The due datefor report submission will be mentioned in the file itself. The first such filewill be made available on SQLASSIST by December 5, 2009. Participants canalso download the list of depository accounts for which KYC confirmation wassought from Participants for the previous five fortnights. A detailed noteexplaining the "Download KYC" feature is given at Annexure I.Further, 'search' facility under the option "Search-General Report" is also beingmade available on SQLASSIST to confirm whether the KYC confirmation reporthas been successfully uploaded by the Participant. The details pertaining tothe "Search" screen are also mentioned in Annexure I.For any further information / clarification, Participants are requested tocontact Ms. Kirti Samant on Tel No. (022) 2499 4424 (email: kirtis@nsdl.co.in).Annexure I1. Login to the intranet site (http://sqlassist) and click on the link namedBILL-PAN, KYC INFO, PMLA Alerts & Waiver request.2. Enter the existing ‘Maker’ User ID & Password and click on the option(I) ‘KYC Upload /Download’ under the field ‘KYC’. The User will beconnected to the KYC Data Maintenance Software of <strong>NSDL</strong>.Following options will be displayed to the User:(i) Upload KYC – for uploading the KYC confirmation report inspecified format (informed vide the circular no. <strong>NSDL</strong>/POLICY/2009/0034 dated May 7, 2009)(ii) Download KYC – for downloading list of depository accountsfor which KYC report is to be uploaded.(a) The screen will display <strong>NSDL</strong> letter ref. no., <strong>NSDL</strong> letterdate, Due date for report submission and a downloadlink.[ 78 ]
(II)(b)User will be able to download the list of depositoryaccounts for six fortnights (i.e., current + last fivefortnights).Search – for verifying the records already uploaded by theParticipant(i) DP ID : This field is non-editable and will contain the DP IDof the Participant by which the User is logged in.(ii) Client ID : This field will help the User to verify whetherKYC status for a particular Client ID is submitted to <strong>NSDL</strong>.(iii) Start Date – End Date : Participants can search by selectingstart and end date to check the records uploaded by themon SQLASSIST.(III) Log Out – This option will take the User out of the KYC DataMaintenance Software.(*Participants are advised to upload the same file which is downloaded tothem from SQLASSIST by filling the columns viz. DP Reply Letter Ref no., KYCStatus and Account Status. The remaining columns in the file should not bealtered.)Circular No.Sub: Facility to upload KYC confirmation reports on SQLASSIST intranet<strong>NSDL</strong>/POLICY/site2009/0034 All Participants are hereby informed that the pilot project for dematerialisationDate: May 7, 2009 As all Participants are aware, KYC confirmation report(s) as and when calledfor by <strong>NSDL</strong> are being sent by Participants through courier, fax, email, etc.Participants can now upload the KYC report(s) through SQLASSIST intranetsite (https://sqlassist) in a specified format. The format for uploading KYCreport will be in an excel sheet as given at Annexure I and displayed onSQLASSIST intranet site. A detailed note explaining the procedure for fillingup the KYC report is given at Annexure II.For uploading KYC confirmation report(s) on SQLASSIST intranet site,Participants have to log-in with their existing ‘Maker’ User ID (i.e. DP ID ofthe Participant used for accessing billing information on SQLASSIST intranetsite) and password. The file must be uploaded after verifying it properly. Theprocedure for uploading the KYC report(s) on SQLASSIST is given atAnnexure III.For further information / clarification, Participants are requested to contactMs. Kirti Samant at Tel No. (022) 2499 4424 / email ID: kirtis@nsdl.co.in / Mr.Charles Mathew at Tel No. (022) 2499 4482 / email ID: charlesm@nsdl.co.in.Annexure IDP DP ID Client <strong>NSDL</strong> <strong>NSDL</strong> Due Criteria DP DP KYC Account RemarksName ID Letter Letter date for Reply reply Status StatusReference Date Report Letter Date (Y/N/O) (F/C)No. Submission Ref no.[ 79 ]
Annexure IIDP DP ID Client <strong>NSDL</strong> <strong>NSDL</strong> Due Criteria DP DP KYC Account RemarksName ID Letter Letter date for Reply reply Status StatusReference Date Report Letter Date (Y/N/O) (F/C)No. Submission Ref no.Format of Annexure I is provided above. Instructions for filling up the details in Annexure I aregiven below:1) The file sent by <strong>NSDL</strong> (via email) will contain details in respect of columns from the field ‘DP Name’to ‘Criteria’. No changes should be made in these fields.2) No changes should be made to the header records.3) The ‘DP Reply Date’ will be system generated date i.e. the date of upload of KYC confirmationreport. No entry should be made in this field.4) Participants are advised to update the fields viz. ‘DP Reply Letter Ref. No., KYC Status (Y/N/O),Account Status (F/C) and Remarks (if any)’ only.5) Expanded form of abbreviations used in the header row is given below:AbbreviationsYNOFCDescriptionKYC COMPLIEDKYC NON-COMPLIEDOTHERSFROZENCLOSED6) The file name of the Annexure I (i.e. to be uploaded) should not contain spaces.Annexure III1. Login to the intranet site (https://sqlassist) and click on the link named Bill-PAN & KYC Info.2. Enter the existing ‘Maker’ User ID & Password and click on the option ‘Upload KYC Report’.3. Click on ‘Browse’ button for selecting the KYC report i.e. the excel file copied in the DPM server /Client Machine. Due care should be taken in selecting the excel file [and not to inadvertently selectthe earlier copied file].4. Click on ‘Upload File’ button for uploading the selected file. Only a single excel file can be uploadedat a time. In case of multiple files, each file should be uploaded separately. Further, in case ofmultiple DPM set-ups, DP ID should be unique in each file.5. Upon clicking the ‘Upload File’ button, contents of the excel file and the number of record(s) thatare accepted or rejected can be viewed. For the uploaded record(s), SQLASSIST system will carryout format level validations of only DP ID & Client ID.6. Before proceeding further, rejected record(s) must be downloaded from a link named ‘RejectedRecords’.7. Click ‘Cancel’ button to cancel the upload or click ‘Confirm’ button to proceed. Upon clicking the‘Confirm’ button, an acknowledgement message will display on the screen that the file has beenuploaded successfully. Only accepted records will get uploaded successfully.8. In respect of rejected records, after making necessary changes, a fresh file should be uploadedby following the process mentioned above.[ 80 ]
Circular No.Sub: Discontinuation of the pilot project for dematerialisation of National<strong>NSDL</strong>/POLICY/Savings Certificate (NSC) and Kisan Vikas Patra (KVP) in dematerialised2008/0081 form.Date: November 10, All Participants are hereby informed that the pilot project for dematerialisation2008 of NSC and KVP in dematerialised form has been discontinued by Departmentof Posts (DoP). Therefore, no fresh NSC/KVP will be issued in demat form byDoP. Those investors who hold the NSC/KVP in a dematerialised form in theiraccounts, may continue to hold the same till its maturity or pre-matureencashment, as may be applicable. Participants are requested to take noteof the above and inform their clients suitably.For further information/clarification, Participants are requested to contactMs. Saoli Bagchi/ Ms. Aanushree Patil on tel. no. 022 - 2499 4250/4371. (email:nsckvp@nsdl.co.in).❑ ❑ ❑[ 81 ]
NOTES[ 82 ]
2. Dematerialisationa. GeneralSection 6 (1) Any person who has entered into an agreement under section 5 shallsurrender the certificate of security, for which he seeks to avail theservices of a depository, to the issuer in such manner as may be specifiedby the regulations.(2) The issuer, on receipt of certificate of security under sub- section (1),shall cancel the certificate of security and substitute in its records thename of the depository as a registered owner in respect of that securityand inform the depository accordingly.(3) A depository shall, on receipt of information under sub-section (2),enter the name of the person referred to sub-section (1) in its records,as the beneficial owner.Regulation 54 (1)Regulation 54 (2)Regulation 54 (3)Bye Law 9.2.2Bye Law 9.2.3Clause 2 of DP-Client AgreementRule 11.1.1Any beneficial owner, who has entered into an agreement with a participant,shall inform the participant of the details of the certificate of security whichis to be dematerialised, and shall surrender such certificate to the participant:Provided that where a beneficial owner has appointed a custodian of securities,then he may surrender the certificates of security to the participant throughhis custodian of securities.The participant shall, on receipt of information under sub-regulation(1),Forward such details of the certificate of security to the depository and shallconfirm to the depository that an agreement has been entered into betweenthe participant and the beneficial owner.The participant shall maintain records indicating the names of beneficialowners of the securities surrendered, the number of securities and otherdetails of the certificate of security received.A Client may convert his physical holdings of securities into dematerialisedform by making an application to the Participant in a Dematerialisation RequestForm (hereinafter referred to as DRF) in the form prescribed under the BusinessRules along with the relevant security certificates.The Participant shall forward the DRF so received, along with the securitycertificates, to the Issuer or its Registrar & Transfer Agent after electronicallyregistering such request with the Depository. Such DRF shall be forwarded bythe Participant not later than seven days of accepting the same from itsClient.The Client shall have the right to get the securities which have been admittedon the Depository dematerialised in the form and manner laid down underthe Bye Laws and Business Rules. The Depository Participant further undertakesthat it shall not create or permit to subsist any mortgage , charge or otherencumbrance over all or any of such securities submitted for dematerialisationexcept on the instructions of the Client.Every Client shall submit to the Participant the securities for dematerialisationalong with the Dematerialisation Request Form (DRF). The specimen of theDRF is given in Annexure D.[ 83 ]
Facility for Cancellation of Pending Demat requestsCircular No:Sub: Conversion of mutual fund units represented by Statement of Account<strong>NSDL</strong>/POLICY/(SoA) into dematerialised form2010/0024 As all Participants are aware, the facility of holding units in dematerialisedDate: March 9, 2010 form was informed vide Circular No. <strong>NSDL</strong>/POLICY/2009/0116 dated December5, 2009. In this context, SEBI has approved the proposal for conversion ofmutual fund units represented by Statement of Account (SoA) intodematerialised form. Accordingly, the procedure for conversion of mutualfund units represented by SoA into dematerialised form was informed to allIssuers/R&T Agents vide Circular No. <strong>NSDL</strong>/CIR/II/06/2010 dated March 9,2010. A copy of this circular is enclosed for information of Participants.Participants are requested to guide their clients suitably.CircularCircular No.: <strong>NSDL</strong>/CIR/II/06/2010 Date: March 9, 2010All Issuers/R&T Agents are hereby informed that SEBI has approved the proposalfor conversion of Mutual Fund (MF) units represented by Statement of Account(SoA) into dematerialised form. In this context, the procedure for conversionof MF units represented by SoA into dematerialised form is given in the enclosedAnnexure.Issuers/R&T Agents handling MF units are requested to be guided by theaforesaid procedure and may advise their clients who approach them withqueries relating to procedure for conversion of MF units represented by SoAinto dematerialised form.All R&T Agents are requested to take note of the above and inform theirclients (Issuers / AMCs) accordingly.AnnexureConversion of existing Mutual Fund units represented by Statement ofAccount into dematerialised form - through Asset Management Company(AMC)/Registrar and Transfer Agent (RTA)1) Submission of conversion request by the investora) An investor desiring to convert its existing Mutual Fund (MF) unitsrepresented by Statement of Account (SoA) into dematerialisedform shall submit to the AMC/RTA, a request for conversion[proforma of Conversion Request Form (CRF) enclosed at (Exhibit-I)], alongwith a copy of Client Master Report (CMR) or TransactionStatement (only the page of Transaction Statement reflecting thename and pattern of holding) issued by its Depository Participant(DP) to such service centres of AMC/RTA as may be decided bythe concerned AMC/RTA. The investor may efface (strike-off) thetransaction/holding details so as to make them illegible.2) Upon receipt of conversion request from the investora) AMC/RTA (Service Centre) shall ensure that the units which theinvestor intends to convert belong to the list of units availablefor dematerialisation and the correct ISIN is mentioned on theCRF.[ 84 ]
) AMC/RTA (Service Centre) shall verify details viz., DP ID, ClientID, Name(s) of the investor(s) and holding pattern (mentioned onCRF) with the CMR/Transaction Statement of the beneficial owneraccount submitted by the investor. The conversion request shallbe accepted by the AMC/RTA (Service Centre) only in case theaforesaid details match.c) If the CRF is in order, the AMC/RTA (Service Centre) will issue anacknowledgement duly signed and stamped to the investor(s).3) Before crediting the units through the depositorya) AMC/RTA shall ensure that the details in CRF viz., Name(s) of theinvestor(s), holding pattern of account holder(s) and signature ofthe investor(s) match with the details available in its records. Incase of any mismatch, AMC/RTA shall reject the request forconversion of units and inform the investor suitably, providingreason(s) for such rejection.b) AMC/RTA shall validate the unit holder name(s) and PAN(s) (ifavailable) from its records with the data obtained from thedepository. In case of any mismatch, AMC/RTA shall reject therequest for conversion of units and inform the investor suitably,providing reason for such rejection.4) After successful validation and verification of data/requesta) AMC/RTA shall record the conversion of units, represented bystatement of account, as requested by the investor(s) in itsrecords.b) AMC/RTA shall credit the units by corporate action process in thedepository to the beneficial owner account of the unit holder(s).c) The credit of the converted units will be reflected in theTransaction Statement provided by the Depository Participant toits client.d) In case of rejection of corporate action file uploaded by AMC/RTAto the depository system, the reason(s) of rejection of thecorporate action shall be provided by the depository. AMC/RTAshall take necessary steps to rectify the same.EXHIBIT - I[PROFORMA]CONVERSION REQUEST FORM FOR EXISTING MUTUAL FUND UNITS(REPRESENTED BY STATEMENT OF ACCOUNT) INTO DEMATERIALISEDFORM - THROUGH AMC/RTADate (dd-mm-yy )ToAMC/RTA (Name)(Address)Sir/MadamI / We hereby confirm that I hold the mutual fund units as per the statement[ 85 ]
of account (enclosed) issued by you. I/We request you to convert the existingunits held by me/us as specified in details of units below into dematerialisedform for crediting these units to my/our beneficial owner account havingfollowing details:DP ID I NClient IDSole/First Holder NameSecond Holder NameThird Holder NameDetails of Units to be converted:Folio No. Scheme Name ISIN Number of RemarksUnits (if any)Authorised SignatoriesHolder(s) Names SignaturesSole/First HolderSecond HolderThird HolderInstructions:1. Please strike off as N.A. whatever is not applicable2. Submit a copy of Client Master Report/Transaction Statement providedby the Depository Participant==========================================================AcknowledgementWe hereby acknowledge the receipt of request for conversion of MutualFund units represented by Statement of Account into dematerialised formby Mr/Ms/M/s _____________________ having DP ID _____________ ClientID ______________ details of which are given below.Folio No. Scheme Name Number of UnitsDate:AMC/RTA Stamp & Signature[ 86 ]
Circular No:Sub: Commencement of spot trading in the compulsory demat segment<strong>NSDL</strong>/POLICY/and features of National Spot Exchange Limited2010/0022 As Participants are aware, National Spot Exchange Limited (NSEL) (CC IDDate: March 4, 2010 IN001125) was made operational in the <strong>NSDL</strong> system in the capacity of aClearing House for settlement of trades pertaining to Warehouse Receipts forcommodities (Refer Circular Nos. <strong>NSDL</strong>/POLICY/2008/0080 and <strong>NSDL</strong>/POLICY/2009/0007 dated November 6, 2008 and January 20, 2009 respectively). Inthis regard, NSEL has intimated to <strong>NSDL</strong> about the features and commencementof spot trading in compulsory dematerialized segment on NSEL, the details ofwhich are enclosed for the information of Participants at Annexure A. Foroperational procedures, Participants may be guided by Circular No. <strong>NSDL</strong>/POLICY/2009/0007 dated January 20, 2009.AnnexureCommencement of Spot Trading in Compulsory Demat Segment in NationalSpot Exchange ltd (NSEL)National Spot Exchange Limited (NSEL) having its registered office at 102-ALand Mark, Suren Road, Chakala, Andheri (East), Mumbai 400093, is ademutualised pan-India electronic multi commodity spot exchange promotedby Financial Technologies (India) Limited (FTIL) and National Agriculture cooperativeMarketing Federation of India (NAFED). The Exchange hascommenced its operation on October 15, 2008 and has handled physicaldeliveries worth Rs. 2403 crores in the calendar year 2009.During one year of successful operation, we have been able to create efficientspot delivery platform, helping the farmers and traders to sell commoditiesdirectly to the processors/ Exporters, which has resulted into reducing costof intermediation, improving farmers’ price realization and also improvingmarketing efficiency.At present, the commodity derivatives exchanges are providing very efficientinstruments for trading, hedging and jobbing in commodities, but investmentinstruments are currently not available in commodities. In the year 2010, ourmain focus is to develop an investment based market in commodities forretail investors.For the first time in India, NSEL is in the process of introducing demat deliverybased investment instruments in commodities, which will be made availablein smaller denominations, such as 1 gram of Gold, 100 Gram of Silver or 1 Kgof Copper, etc in dematerialized units. Investors can participate in suchinstruments and take delivery on T + 2 basis in demat form. Whenever theywant to sell the same, they can do so on our platform on any trading day orthey can convert the demat units in to physical form in specific denominationsat specified locations. The salient features of these instruments are: The trading units will be made available in smaller denominations, suchas 1 gram of Gold, 100 Gram of Silver or 1 Kg of Copper, etc. There aredifferent ICINs will be available for different base metals. A person canbuy minimum 1 gram of Gold and 100 gram of Silver in the Exchangetrading Platform. Presently National Spot Exchange intends to allowtrading in demat Gold and Silver with denomination of 1 gram and 100[ 87 ]
gram respectively. The purity grade of Gold shall be 995 and Silveris 999.The Existing members can trade in this contract through the NSEL tradingplatform (NEST). The trading shall be carried out from Monday to Friday.However the members and their clients must have to open the Pool andbeneficiary accounts through the NSEL empanelled DPs in <strong>NSDL</strong>.All outstanding delivery positions at the end of the trading session of aparticular day shall be settled only through dematerialized units.Settlement of deliveries shall be made through the CM pool accounts asit is settled in the securities market on T+2 days basis from Monday toFriday. Thereafter the clearing members will transfer the ICIN units totheir respective clients.In order to simplify the process of collection of storage charges, thecharges shall be levied by NSEL to the ICIN holders on monthly basis.Such charges will be computed based on the holdingIn the respective accounts and on the last Saturday of every month.The person holding demat commodities on that day will be required topay holding charges for the entire month,Irrespective of the no. of days for which he holds the ICINs. The chargesper unit per month will be communicated by NSEL to the empanelledDPs separately. The ICIN holders are required to pay the storage chargesto the respective DPs within 21 days from the last Saturday of everymonth and the DPs shall deposit the same to NSEL on monthly basis. The conversion of demat units into physical commodities shall bepermitted in specified lot size and at specified locations, where NSELhas entered into vaulting arrangement. Therefore, an investor can optfor rematerialization, only if he has such number of units to his credit,as required for rematerilization.For launching such instruments, NSEL has already signed agreement withNational Securities Depository Limited (<strong>NSDL</strong>) and all set to commencetrading of commodities in compulsory demat segments on or around March08 th 2010.For any clarification on trading, Settlements and DP empanelment thefollowing officials of NSEL can be contacted.Mr. Santosh Mansingh / Mr. H.B. Mohanty<strong>NATIONAL</strong> SPOT EXCHANGE <strong>LIMITED</strong>.102-A Land Mark, Suren Road, CHAKALAAndheri (East) Mumbai-400093Telephone : 91-22-67619900 fax: 91-22-67619931Cell no :+919930267641/+919930267639Circular No:Sub: Facility for holding mutual fund units in dematerialised form<strong>NSDL</strong>/POLICY/All Participants are hereby informed that as per the scheme envisaged by2009/0116 SEBI vide Circular No. SEBI/IMD/CIR No.11/183204/2009 dated November 13,Date: December 5, 2009 2009 (copy enclosed) for transacting in mutual funds through stock exchangeplatform, <strong>NSDL</strong> has enabled holding these mutual fund units in dematerialisedform.[ 88 ]
In order to encourage investors to avail this facility, it has been decided notto charge any fee to Participants till March 31, 2010 in respect of mutual fundunits [security type code ‘20’ Mutual Fund Units (TRASE)] routed through thestock exchange platform. The list of the mutual funds which have joined<strong>NSDL</strong> so for is given below:Sr. No.Name of Fund1 Birla Sun Life Mutual Fund2 Fidelity Mutual Fund3 HDFC Mutual Fund4 ICICI Prudential Mutual Fund5 Reliance Mutual Fund6 Religare Mutual Fund7 SBI Mutual Fund8 TATA Mutual Fund9 UTI Mutual FundFeatures:1. The existing depository accounts can be used for holding these mutualfunds units in dematerialised form.2. Subscription:On subscription for mutual fund units by investor through stock exchange,Asset Management Company (AMC)/ Registrar & Transfer Agent (RTA)will credit the depository account of the Client directly through creditcorporate action.3. Redemption:(a) For redemption purpose, in addition to the investor placing anorder through stock exchange the client will have to give aninstruction through a delivery instruction slip (DIS) to its Participantto transfer the units to a designated Pool account of the ClearingCorporation (CC) of the stock exchange. The designated Poolaccounts are given below:Sr. Stock CC Name CM BP ID Market Settlement Execution Pay-inNo. Exchange Type Number Date deadlineName1 National National IN565576 12 (Mutual 4.30 PM onStock Securities Fund) Trade dayExchange Clearing (OrderCorporationDay)Ltd. As applicable2 Bombay Indian IN619960 02 (MutualStock Clearing Fund)Exchange CorporationLimited Ltd.[ 89 ]
(b) Participants are required to execute the DIS in the DPM systempromptly. The CCs either have a standing instruction to receivecredits or will execute a corresponding receipt instruction toreceive units in its account. For those instructions which arematched in the depository system, the units will be debited fromthe account of the client and credited to the account of CC.(c) The redemption proceeds will be sent by AMC/ RTA throughappropriate payment mode such as direct credit, NEFT or chequeas decided by AMC from time to time, as per the bank accountdetails of the Client available in the depository system.4. Transaction Statements:Participants must continue sending the Transaction Statement to theirClients as per the existing frequency which will include mutual fundunits also.DEPUTY GENERAL MANAGERINVESTMENT MANAGEMENT DEPARTMENTSEBI /IMD / CIR No.11/183204/ 2009November 13, 2009All Mutual Funds/ Asset Management Companies (AMCs)/Association of Mutual Funds in India (AMFI)Recognised Stock Exchanges/ Depositories /Registrar to an Issue and Share Transfer AgentsSir / Madam,Sub: Facilitating transactions in Mutual Fund schemes through the Stock Exchange infrastructure1. The need for enhancing the reach of mutual fund schemes to more towns and cities has been airedthrough various forums/ channels. To address this issue, various models have been debated anddiscussed.2. The infrastructure that already exists for the secondary market transactions through the Stockexchanges with its reach to over 1500 towns and cities, through over 200,000 Stock Exchange terminalscan be used for facilitating transactions in mutual fund schemes. The Stock Exchange mechanismwould also extend the present convenience available to secondary market investors to mutual fundinvestors.3. Units of mutual fund schemes may be permitted to be transacted through registered stock brokersof recognized stock exchanges and such stock brokers will be eligible to be considered as officialpoints of acceptance as per SEBI Circular No. SEBI/IMD/CIR No.11/78450/06 dated October 11,2006.4. The respective stock exchange would provide detailed operating guidelines to facilitate the same.5. In this regard, you are advised that :5.1. Empanelment and monitoring of Code of Conduct for brokers acting as mutual fundintermediaries-5.1.1. The stock brokers intending to extend the transaction in mutual funds through stockexchange mechanism shall be required to comply with the requirements specified inSEBI circular MFD/CIR/10/310/01 dated September 25, 2001 regarding passing theAMFI certification examination. All such stock brokers would then be considered as[ 90 ]
empanelled distributors with mutual fund/AMC.5.1.2. These stock brokers shall also comply with the requirements in SEBI circulars datedMFD/CIR/06/210/2002 dated June 26, 2002, MFD/CIR/20/23230/02 dated November28, 2002 and SEBI / IMD / CIR No. 8 /174648 / 2009 dated August 27, 2009, applicableto intermediaries engaged in selling and marketing of mutual fund units.5.1.3. It is clarified that, stock exchanges shall monitor the compliance of the code ofconduct specified in the SEBI circular MFD/CIR/20/23230/02 dated November 28,2002 regarding empanelment of intermediaries by mutual funds.5.2. Time stampingTime stamping as evidenced by confirmation slip given by stock exchange mechanism to beconsidered sufficient compliance with clause 5, 6 and 8 of SEBI Circular SEBI/IMD/CIR No.11/78450/06 dated October 11, 2006.5.3. Statement of AccountWhere investor desires to hold units in dematerialised form, demat statement given by depositoryparticipant would be deemed to be adequate compliance with requirements prescribed underregulation 36 of SEBI (Mutual Fund) Regulations, 1996, and SEBI Circulars MFD/CIR/9/120/2000dated November 24, 2000 and IMD/CIR/12/80083/2006 dated November 20, 2006 regardingdespatch of statements of account.5.4. Investor grievance mechanismStock exchanges shall provide for investor grievance handling mechanism to the extent theyrelate to disputes between brokers and their client.5.5. Dematerialization of existing units held by investorsIn case investors desire to convert their existing physical units (represented by statement ofaccount) into dematerialized form, mutual funds / AMCs shall take such steps in coordinationwith Registrar and Transfer Agents, Depositories and Depository participants (DPs) to facilitatethe same.5.6. Know your client (KYC).Where investor desires to hold units in dematerialised form, the KYC performed by DP in termsof SEBI Circular MRD/DoP/Dep/Cir-29/2004 dated August 24, 2004 and this would be consideredcompliance with applicable requirements specified in this regard in terms of SEBI Circular ISD/AML/CIR-1/2008 dated December 19, 2008 by mutual funds /AMCs.6. Stock exchanges and mutual funds/AMCs, based on the experience gained may further improve themechanism in the interest of investors. Necessary clarifications, if any, would be issued at appropriatetime by SEBI in this regard.7. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities andExchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds)Regulations, 1996, to protect the interests of investors in securities and to promote the developmentof, and to regulate the securities market.Yours faithfullyRUCHI CHOJER[ 91 ]
Circular No:Sub: Facility for cancellation of pending demat requests<strong>NSDL</strong>/POLICY/As all Participants are aware, certain Issuer companies are not confirming2009/0086 the requests for dematerialisation for a long time. Due to this, in casesDate: September 19, where the clients have pending demat requests, Participants are not in a2009 position to process the requests received from their clients for closure ofaccounts. In view of the aforesaid, a facility for cancellation of pending dematrequest is introduced. The procedure in this regard is given below:1. Client must submit a letter in the format given at Annexure A requestingto cancel the pending demat request in respect of those demat requestswhich are pending for more than 60 days.2. Participant must submit a letter requesting <strong>NSDL</strong> to facilitatecancellation of pending demat requests in the format given atAnnexure B.ANNEXURE ADateTo,Participant Name and addressDear Sir/Madam,Sub.: Cancellation of Pending Demat Request (s)I/We had submitted securities for dematerialization as per details given below:DP IdClient Id: __________________________________________: __________________________________________Sole/First Holder Name : __________________________________________Second Holder NameThird Holder Name: __________________________________________: __________________________________________Demat Demat ISIN Security Name QuantityRequest GenerationNo. (DRN) DateThe aforementioned demat request(s) is/are pending for disposal for a longtime. Thus, I/we request you to cancel the aforesaid demat requests. Further,I/We wish to inform that the share (security) certificates pertaining to thesedemat requests are available with me/us and in case they are not availablewith me/us, the matter will be taken up by me/us directly with the concernedIssuer/ its R&T Agent.Yours faithfully,1) ________________, 2) _________________, 3) ___________________Signature(s) of the account holder(s)[ 92 ]
ANNEXURE B(to be submitted on letter-head of the Participant)To,The Participant Interface DepartmentNational Securities Depository LimitedTrade World, Kamala Mills CompoundSenapati Bapat MargLower ParelMumbai - 400013.Sub: Cancellation of Pending Demat Request(s)Dear Sir,This is to inform you that we have received requests from our clients tocancel pending demat requests in the format specified at Annexure A to CircularNo. <strong>NSDL</strong>/POLICY/2009/0086 dated September 19, 2009, details of which aregiven below:Sr. No. DP ID Demat Request NumberWe confirm that;i) the request(s) for cancellation of pending demat(s) is/are received fromthe concerned account holder(s) by verifying their signatures with ourrecords.ii) the above demat request(s) is/are pending for more than 60 days fromthe date of generation of demat request(s) in the DPM system.We request you to facilitate cancellation of the aforesaid pending dematrequests. Further, a soft copy containing the aforesaid details are also sentseparately in an excel sheet at Participant-Interface@nsdl.co.in.Date: For Place: (Signature of Authorised Signatory)Name & Designation[ 93 ]
Demat request - POA holdersCircular No: All Participants are hereby advised that while forwarding dematerialisation /<strong>NSDL</strong>/PI/98/001 rematerialisation request forms to the Issuer/ R&T Agents, in the cases whereDate: January 1,1998 requests are received from the Power of Attorney (POA) holders of clients,the following should be ensured :i. If the POA is not registered with the Issuer/R&T Agents, a copy of thePOA should be enclosed along with the DRFs/RRFs.ii.If the POA is registered with the Issuer/R&T Agents, the POA registrationnumber should be mentioned on the DRFs/RRFs.Demat request - Handling request in bulkCircular No.All Participants are hereby requested to ensure the following while sending<strong>NSDL</strong>/PI/98/013 bulk dematerialisation requests to the Issuer/R&T Agents:Date : January 6,1998 i. the certificates should be arranged in the same sequence as mentionedon the DRF.ii.the certificate details may also be provided in a soft copy form (i.e.,on a floppy, DAT, etc. ) in addition to a hard copy.Demat request - Name matchingCircular No.<strong>NSDL</strong>/PI/99/28Date: January 11,1999All Participants are hereby informed that it was decided in the meeting heldby SEBI on December 17, 1998, that the Issuers/R&T Agents should processthe dematerialisation requests received from client(s) with name(s) notmatching exactly with the name(s) appearing on the certificates merely onaccount of initials not being spelt out fully or put after or prior to the surname,provided the signature(s) of the client(s) on the DRF tallies with the specimensignature(s) available with them. For example, the holder of securities mayhave opened the depository account in the name of Sushil Ramesh Shah buthis name on the certificate may appear as S. R. Shah or Sushil R. Shah, etc.While doing so, the Issuer/R&T Agent should ensure compliance of all thelaws, Rules and Regulations prescribed under the Depositories Act, SEBIRegulations, <strong>NSDL</strong> Bye Laws, Business Rules and Operational Guidelines. Thiswas informed to all Issuers/R&T Agents vide our circular no. <strong>NSDL</strong>/SG/001/99 dated January 8, 1999.Demat request - Internal control on despatchIn view of the above, Participants may advise their clients (individuals) thatsuch cases as explained above will be considered for dematerialisation.Circular No.<strong>NSDL</strong>/PI/99/116Date: February 25, 1999It has been brought to our notice by some Issuers/R&T Agents that occasionallythey have been receiving dematerialisation request forms and the physicalcertificates pertaining to the securities not handled by them. In view of this,Participants are advised to ensure that proper internal controls are in placefor despatch of the dematerialisation request forms and the physicalcertificates to the correct addresses. Participants are advised to refer to thecirculars issued by <strong>NSDL</strong> regarding the addresses where the dematerialisationrequest forms are to be sent. Loss of such certificates in transit and consequentlosses to investors will expose Participants to claims by investors.[ 94 ]
Demat Processing - Certificates submitted for dematCircular No.<strong>NSDL</strong>/PI/2004/0649Date : April 12,2004Demat processing - SEBI directive to R&T AgentCircular No.<strong>NSDL</strong>/PI/99/390Date : May 28, 1999<strong>SECURITIES</strong> AND EXCHANGE BOARD OF INDIAPRIMARY MARKET DEPARTMENTMittal Court, 'A' Wing, Ground FloorNariman Point, MUMBAI - 400 021.RRTI Circular No.1(99-2000)PMD/SU/11560 /99May 20, 1999To:Attention of Participants is invited to Rules 11.1.7 and 11.1.9 of the BusinessRules of <strong>NSDL</strong> pertaining to the manner in which security certificates shouldbe cancelled before onward submission to the Issuer or its Registrar andTransfer Agent for dematerialisation.In addition to the procedures mentioned in the aforesaid Rules, the Participantsmust ensure that the security certificates submitted for dematerialisation tothe Issuer or its Registrar and Transfer Agent bear the DP name, DP Id andClient Id.A copy of the circular no. PMD/SU/11560/99 dated May 20, 1999 issued bythe Securities and Exchange Board of India to all Registrar & Transfer Agentsregarding processing dematerialisation requests is enclosed for yourinformation.All Category I Registrars to an issue and share transfer agentsAll Category II Share transfer agents.Dear Sir,Sub : Delay in processing dematerialisation requests.It has come to our notice that some of the share transfer agents are taking an unduly long time fordematerialisation of shares and are also rejecting the dematerialisation requests on flimsy groundswithout providing necessary reasons and legal documentation. Such practices are detrimental to theinterest of the investors and slow down the process of dematerialisation.You are therefore requested to expedite the processing of dematerialisation request, in any caseensuring that the request is processed within 15 days from the date of the such request. You are alsoadvised not to reject the request on flimsy grounds or without specifying reason for rejection or withoutproper documents supporting your reason for rejection. A violation of this directive would invite suitableaction.Demat processing - Time standard for rejected demat requestsCircular No.<strong>NSDL</strong>/PI/99/826Date: October 21,1999SEBI has constituted a Standing Committee to resolve issues betweenDepository Participants, Registrars and the Depositories. The first meeting ofthe Standing Committee was held on September 10, 1999 and various issuesrelating to dematerialisation of securities were discussed. It was decided bythe Committee that where demat request forms (DRFs) and the certificatesdo not reach the Registrar within 30 days from the date of electronic request,such requests should be rejected. It was also decided that where there are[ 95 ]
Demat request - due carepending court cases in respect of shares for which demat requests have beenreceived, such requests should be rejected within 30 days and the Registrarsshould ensure that the relevant documents are despatched to the Participantswithin 5 days of the rejection.It was further decided that where there are signature mismatches, theRegistrars should, based on the attestation of the banker, process such dematrequests. In case any demat request is rejected due to signature mismatch,the Registrar should ensure that all relevant documents are returned to theconcerned Participant, within 5 days. This is for information of the Participants.Circular No.All Participants are advised to ensure due care while processing the requests<strong>NSDL</strong>/PI/99/901 for dematerialisation received from the clients. Participants must mentionDate: November 18, the correct ISINs in the dematerialisation request forms (DRFs) and take special1999 care in respect of those cases where multiple ISINs exist viz; non pari-passushares, partly-paid shares, new sub-divided shares, etc. In such cases,Participants must also ensure to mention the correct ISIN while capturing/verifying & releasing the dematerialisation requests in the DPM system.It has been observed that dematerialisation requests are initiated under NPPISIN even after such shares have become pari-passu with the old sharesconsequent to the book closure. It is therefore advised to exercise extracaution while processing dematerialisation requests under NPP ISIN.Those Participants who have multiple DPM set-ups should ensure that thecorrect DP-Ids are mentioned in the dematerialisation request forms.Demat request - wrong releaseCircular No.<strong>NSDL</strong>/PI/2000/1006Date : June 26,2000All Participants are advised that if they have wrongly released anydematerialisation request in the DPM system and if it is not cancelled till theEOD of the release date, then they must immediately inform the respectiveIssuer / Registrar & Transfer Agent requesting for rejection of thedematerialisation request. Details of the request viz.; DP Id, DRN, ISIN, No.of shares requested and the reason for cancellation must be provided to theIssuer / Registrar & Transfer Agent for the purpose of rejectionCompanies delaying demat request confirmationCircular No.Sub: List of companies having more than 50 demat requests pending<strong>NSDL</strong>/POLICY/beyond 21 days2008/0053 Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/2001/1694Date: August 9, 2008 dated November 6, 2001 advising Participants to inform their Clients suitablywhile accepting demat requests of companies with large number of dematrequests pending beyond 21 days. Further, Participants were informed videCircular No. <strong>NSDL</strong>/PI/2004/0391 dated March 1, 2004 that the list of 200 suchcompanies is made available on its website http://www.nsdl.co.in.In this context, in place of the above list, <strong>NSDL</strong> has now started displayingthe list of all companies having more than 50 demat requests pending beyond21 days on the <strong>NSDL</strong> website http://www.nsdl.co.in on a weekly basis.[ 96 ]
Circular No.<strong>NSDL</strong>/PI/2004/0993Date : June 4, 2004Circular No.<strong>NSDL</strong>/PI/2004/0391Date: March 1,2004Participants are therefore advised to maintain the aforesaid information atall their branches/franchisees/service centre and should accordingly informthe Clients about such companies while accepting any requests fordematerialisation of securities of such companies.All Participants are hereby informed that <strong>NSDL</strong> has been receiving informationfrom Registrar and Transfer Agents (RTAs) about certain companies whosedematerialisation requests are pending for confirmation for a long time, asthese companies are not contactable / not responding or there are duespending from the companies and consequently the RTAs have discontinuedproviding depository services to their client companies. A list of such companiesis available on the <strong>NSDL</strong> website (http://www.nsdl.co.in/downloadables/listcomp2.html).Participants are advised to inform their Clients suitably whileaccepting demat requests of such companies and maintain the aforesaidinformation at all their branches/franchisees/service centres.Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/2001/1694dated November 6, 2001 advising Participants to inform their Clients suitably,while accepting demat requests of companies with highest number of pendingdemat requests beyond 21 days. <strong>NSDL</strong> has regularly been updating the list of200 such companies on its website http://www.nsdl.co.in. However, in theinvestor-depository meets conducted by <strong>NSDL</strong>, Clients have represented tous that such information is not available at a number of branches/franchisees/service centres of Participants from where they are offering services.Participants are advised to maintain the aforesaid information at all theirbranches/franchisees/service centres.Circular No.All Participants are hereby informed that <strong>NSDL</strong> has, on its website http://<strong>NSDL</strong>/PI/2001/1694 www.nsdl.co.in given the list of 100 companies with highest number of pendingDate: November 6, demat requests beyond 21 days. This list will be updated at regular intervals.2001 Participants are advised to inform their Clients suitably, while accepting dematrequests of such companies.Request for rejection of pending demat & account closureCircular No.Participants have been representing to <strong>NSDL</strong> that they are not in a position to<strong>NSDL</strong>/PI/2003/0309 process the requests received from their Clients to close their accounts dueDate: February 22, to request(s) for dematerialisation pending disposal for a long time by the2003 concerned Issuer company and/or its Registrar & Transfer Agent (RTA). Inorder to help such Clients to close their accounts, Participants can advisetheir Clients as under:1. Write a letter (format given below) to the Issuer (with a copy markedto its Participant and respective RTA), requesting for rejection of thepending dematerialisation request(s) and send fresh physical securitycertificate(s) to the Client directly.2. Enclose a copy of the dematerialisation request generated from DPMsystem, duly signed & stamped by the Participant, alongwith theaforesaid letter to the Issuer.On receipt of copy of the letter from the Client, the Participant may alsotake up the matter with the concerned Issuer and/or its RTA for rejecting the[ 97 ]
instruction expeditiously. After the pending dematerialisation request(s) is/are rejected by the Issuer and/or its RTA, the Participant can close the accountof such Client.FormatDateTo,Company Name and addressDear Sir/Madam,Sub.: Rejection of Demat Request (s)I/We had submitted securities of(companyname) fordematerialisation under ISINthrough my DepositoryParticipant (name) (DP Id IN , ClientId). Details of my/our demat request(s) are as under:Demat Demat Demat Certificate Distinctive No. ofRequest Generation Request No(s). Nos. SecuritiesNo. (DRN) Date Form No.FromToThe aforementioned demat request(s) is/are pending for disposal for a longtime. As I/We wish to close the said account and hold the security(ies) inphysical form, I/we request you to reject the said pending demat request(s)and send fresh security certificates directly to me/us under advise to my/ourDP.Yours faithfully,1) , 2) , 3)Name(s) & Signature(s) of the account holder(s)CC:1. DP Name & Address2. Name & Address of Registrar & Transfer Agent - You are requested toreject the demat request(s) as stated above and send fresh securitycertificates directly to me/us underadvise to the DP.b. Transfer-cum-dematBye Law 9.2.13Bye Law 9.2.13 has been deleted w.e.f. February 27, 2004. Prior todeletion, Bye Law 9.2.13 read as under :"If a Client is desirous of dematerialising the shares sent for transfer, then itmay do so as per the provisions of the Guidelines for dematerialisation ofshares sent for transfer issued by the Securities and Exchange Board of Indiaand in the manner laid out in the Business Rules. In such a case, for thepurpose of Bye Laws 9.2.2 and 9.2.3 above, in lieu of security certificates theletter issued by the Issuer or its Registrar & Transfer Agent in accordancewith the said guidelines shall be submitted by the Client to the Participantfor forwarding it to the Issuer or its Registrar & Transfer Agent."[ 98 ]
Transfer-cum-demat - Withdrawal of SchemeCircular No.All Participants are hereby informed that Securities and Exchange Board of<strong>NSDL</strong>/PI/2004/0261 India (SEBI) vide its circular no. SEBI/MRD/Cir-10/2004 dated February 10,Date: February 11, 2004 (copy enclosed) has withdrawn transfer-cum-demat scheme. Accordingly,2004 the Bye Laws and Business Rules of <strong>NSDL</strong> are being modified, which will benotified shortly.In view of the above, <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/JS/003/2004 datedFebruary 11, 2004 has advised all the Issuers and their Registrar & TransferAgents (RTA) that henceforth, they should not issue option letters toshareholders, as prescribed under the SEBI guidelines for dematerialisationof shares sent for transfer. All Participants are hereby advised that optionletters already issued by the Issuers or their RTAs should be accepted and thedematerialisation requests be processed as per the existing guidelines.<strong>SECURITIES</strong> AND EXCHANGE BOARD OF INDIADEPUTY GENERAL MANAGERMarket Regulation DepartmentE-mail: sundaresanvs@sebi.gov.inTel : 2216 4465 Fax: 2216 4394SEBI/MRD/Cir - 10/2004February 10, 2004The Managing DirectorNational Securities Depository Ltd.Trade World, 4th Floor, Kamala Mills CompoundSenapati Bapat Marg, Lower ParelMumbai - 400013Annexure-SEBI Directive on transfer-cum-dematThe Executive DirectorCentral Depository Services(India) Ltd.Phiroze Jeejeebhoy Towers, 27-28th Floor, Dalal StreetMumbai - 400 023Dear Sir/s,Sub: Transfer-cum-demat scheme1. SEBI had introduced compulsory dematerialized trading in select shares for all investors witheffect from January, 1999. Thereafter, an increasing number of shares were added to this list atregular intervals. During this phase, the companies/transfer agents were under tremendous pressureon account of the large number of physical shares being received by them for transfer and/ordemat. Moreover, transfer and demat were two separate processes and the investors were requiredto submit the transferred shares to the share transfer agent, through their DPs, fordematerialization. This entire process involved anywhere from 1-3 months and the investors couldnot sell the shares during this period.2. Accordingly, the transfer-cum-demat scheme was introduced by the depositories to counter theproblems faced by the investors in the transition phase of moving from physical to demat trading[ 99 ]
mode, to decrease the time period involved in transfer and demat. However, as on date, a largenumber of stocks have already been dematerialized, almost 100% trading takes place indematerialized form and hence, there is far less pressure on the companies/the share transferagents.3. In view of the above, it is felt that the facility of transfer-cum-demat is no longer relevant andcan be withdrawn without causing any undue inconvenience and/or delays to the investors. It hasaccordingly been decided to withdraw the transfer-cum-demat scheme.4. The depositories are accordingly advised to ;4.1. make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision immediately.4.2. bring the provisions of this circular to the notice of the DPs of the Depository and also todisseminate the same on the website.4.3. communicate to SEBI the status of the implementation.5. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securitiesand Exchange Board of India Act, 1992 to protect the interests of investors in securities and topromote the development of, and to regulate the securities market.Yours faithfully,V S SUNDARESANc. Transposition-cum-dematBye Law 9.2.13. If the names of the clients appearing on the security certificates match withthe names in which the account has been opened but are in a different order,such securities can be dematerialized by following the procedure laid downin the Business Rules.Rule 11.1.5Rule 11.1.13The Participant shall forward the DRF to the Issuer or its Registrar & TransferAgent only after ascertaining that the number of certificates annexed withthe DRF tallies with the number of certificates mentioned on the DRF. Providedfurther that in case of transposition/transmission and dematerialisation cases,the Participant shall also forward Annexure OA/OB as the case may be,alongwith the DRF to the Issuer or its Registrar & Transfer Agent.The securities which have been dematerialised shall be credited to theaccounts maintained by a Participant only when the pattern of holdings inthe account of the Client matches with the pattern of holdings as per thesecurity certificates. Provided however that in case where the names appearingon the certificates match with the names in which the account has beenopened but are in a different order, the Client can get the security certificatesdematerialised by submitting the security certificates alongwith theTransposition Form as per Annexure OA and the Dematerialisation RequestForm (DRF) to the Participant. The explanation of such pattern of holding isgiven in Annexure F.[ 100 ]
d. Transmission-cum-dematBye Law 9.2.14. If a client is desirous of getting the name(s) of the deceased joint holder(s)removed from the security certificate(s) and get them dematerialised, itmay do so by following the procedure laid down in the Business Rules.Rule 11.1.5Rule 11.1.17The Participant shall forward the DRF to the Issuer or its Registrar & TransferAgent only after ascertaining that the number of certificates annexed withthe DRF tallies with the number of certificates mentioned on the DRF. Providedfurther that in case of transposition/transmission and dematerialisation cases,the Participant shall also forward Annexure OA/OB as the case may be,alongwith the DRF to the Issuer or its Registrar & Transfer Agent.TRANSMISSION (NAME DELETION) AND DEMATERIALISATION OF <strong>SECURITIES</strong>In case of death of one or more of the joint holders, the surviving jointholder(s) can get the name(s) of the deceased deleted from the securitycertificate(s) and get them dematerialised by submitting the securitycertificates alongwith the Transmission Form as per Annexure OB and theDematerialisation Request Form (DRF) to the Participant.❑ ❑ ❑[ 101 ]
NOTES[ 102 ]
3. Instructions Processinga. GeneralSection 7 (1)Regulation 42 (2)Regulation 42 (3)Bye Law 6.3.3Bye Law 9.6.1Clause 7 of <strong>NSDL</strong> -DP AgreementClause 4 of DP-Client AgreementRule 4.5.1Every depository shall, on receipt of intimation from a participant, registerthe transfer of a security in the name of the transferee.A participant shall register the transfer of securities to or from a beneficialowner's account only on receipt of instructions from the beneficial owner andthereafter confirm the same to the beneficial owner in a manner as specifiedby the depository in its bye-laws.Every entry in the beneficial owner's account shall be supported by electronicinstructions or any other mode of instruction received from the beneficialowner in accordance with the agreement with the beneficial owner.The Participant shall not give a debit or credit to the account of a Clientwithout a due authorisation from Client.The Participant shall not execute any debit or credit in the account of theClient without authorisation from such Client.The Participant shall not commingle his own holdings held in <strong>NSDL</strong> with thoseheld on behalf of the Clients. The Participant shall effect any transfer ofholdings only if the same is supported by a valid instruction and an adequateaudit trail of the same is maintained unless otherwise provided in the ByeLaws .The Participant shall be responsible for every action taken on the basisof any order, instruction, direction or mandate given by the account holder.The Depository Participant undertakes that a transfer to and from the accountsof the Client shall be made only on the basis of an order, instruction, directionor mandate duly authorized by the Client and that the Depository Participantshall maintain adequate audit trail of such authorization.The forms laid down under these Business Rules shall be adhered to by theParticipants at the time of operating the accounts of its Clients and givingeffect to the transactions laid down under Chapter 9 of the Bye Laws andChapter 11, 12 and 13 of this Business Rules.Provided however that to effect such transactions as may be specified by theDepository based on electronic instructions received from the Client, theParticipant shall obtain the prior approval of the Depository. The Depositorymay grant such an approval to the Participant if;i) the Participant has adequate systems and security features in place toauthenticate the Client and the Client to authenticate the Participant;ii) the Participant is able to conclusively prove the origin, destination,date and time of receipt or despatch of such electronic instructionsreceived by it;iii) the Participant retains such electronic instructions in the format inwhich it was originally received or sent or in a format which can bedemonstrated to represent accurately the information which wasoriginally received or sent;iv)the instructions received remain accessible and usable for subsequentreference; and[ 103 ]
Rule 4.5.2Rule 6.1Rule 12.2.1Rule 12.2.2v) the Participant fulfills such other conditions as may be specified by theDepository.Provided further that the Participant may operate such accounts oreffect such transactions by using any other form or manner ofauthorisation from the Client provided the same has been approved bythe Executive Committee.The Participant shall promptly inform the Clients in respect of thoseinstructions which have not been executed.The Participants shall execute transactions on behalf of its Clients only onauthorisations from their Clients.The Participant shall effect a debit or credit to the accounts of its Clientsonly on receipt of proper authorization from the Clients in the forms laid outin Annexure L and M. Alternatively, a Client may give standing instructions toits Participant to credit its account. In case the Client does not have sufficientbalance in its account, the debit to the account shall be effected to theextent of balance available.The aforementioned forms submitted by the Clients and Clearing Membersshall be checked by the Participant to ensure the completeness of the formand validity of the signature of the Client and the Clearing Member beforethe requests on these forms are executed.Master Circular on Delivery Instruction Slips (DIS) - Version 1.0Circular No : Sub: Master Circular on Delivery Instruction Slips (DIS) - Version 1.0<strong>NSDL</strong>/POLICY/<strong>NSDL</strong> has been issuing various circulars from time to time stipulating the2009/0082 procedures to be followed by Participants for issuance, re-issuance andDate: September 9, execution of DIS. The guidelines issued by SEBI and <strong>NSDL</strong> from time to time2009 have now been consolidated into a single master circular for ready reference(Annexure A).Participants are requested to note that requirements, which have becomeredundant, have been deleted from the master circular. Further, referencenumber and date of issuance of the relevant circulars are mentioned in themaster circular for ready reference. While every care has been taken toinclude all relevant requirements, Participants should refer to <strong>NSDL</strong> Bye Laws,Business Rules and Circulars issued from time to time.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>officials on telephone numbers (022) 2499 4488 / 4214 / 4494 (email:participant-interface@nsdl.co.in).Annexure AMaster Circular on Delivery Instruction Slips (DIS) - Version 1.0INDEXSr. No.Topic1 Types of DIS2 Issuance and Re-issuance of DIS3 Modes of providing DIS booklets to Clients[ 104 ]
4 Issuance of Loose leaf DIS5 Checks and Controls in case Participant is using back office system / Manual controls6 Execution of transactions based on receipt of electronic instruction7 Submission of instructions using SPEED-e facility of <strong>NSDL</strong>8 Deadline for submission of market instructions on SPEED-e9 Instructions received from Clients who have attained majority10 Instructions received from illiterate persons11 Instructions received from Blind persons12 Instructions received through fax13 Facility for submitting consolidated DIS accompanied by computer print-outs by Power of Attorney(POA) holder (other than Participant) on behalf of its Clients14 Facility for acceptance of Consolidated Client Delivery Instructions computer printouts allowedwhere POA is given by Clients in favour of Participant15 Acceptance of Client's Delivery Instructions accompanied with computer printouts16 Acceptance of instructions accompanied by computer printouts for Clearing Members17 Computer printouts allowed for other types of instructions18 Instructions received for Buy Back / Open Offer19 Incorporation of details in DIS as advised by Financial Intelligence Unit (FIU)20 Processing of DIS(i) Acknowledgement of instruction at the time of accepting physical / electronic DIS(ii) Deadline time for submission of physical / electronic instructions(iii) Deadline time for accepting non pay-in related instructions(iv) Processing of IDT Instructions(v) Deadline for Bulk Verify & Release for IDT Instructions(vi) Execution date of instructions falling on a Sunday or any other DM holiday(vii) Restriction on processing of DIS at franchisee21 Internal and Concurrent Audit - Control and Verification of Delivery Instruction Slips22 Precautions to be taken at the time of accepting market related instructions(1) Types of DIS:The various types of DIS forms are given below:(a) Annexure L (new and old formats) - Delivery Instruction Slips submitted by Clients (beneficialowners) where the source and target details are in <strong>NSDL</strong>.(b) Annexure LA (new and old formats) - Combined delivery instruction Slips for Account Transfer(within <strong>NSDL</strong>) & Inter-Depository Transfer Instructions.(c) Annexure M - Receipt Instructions by Clients / Clearing Members.(d) Annexure N - Inter-Depository Transfer Delivery Instructions.(e) Annexure NA - Inter-Depository Transfer Receipt Instructions.(f) Annexure S - Delivery Out Instructions submitted by Clearing Members for pay-in.(g) Annexure SS - Inter-settlement Instructions.(h) Annexure ST - CM Pool to CM Pool Delivery Instructions by Clearing Members.(i) Annexure SU - CM Pool to CM Pool Receipt Instructions by Clearing Members.(j) Annexure T - Delivery Instructions by Clearing Members on Pay-out.[ 105 ]
Participants can use either the old format or the new format of Annexure L / Annexure LA dependingupon their convenience of operations.(2) Issuance and Re-issuance of DIS booklets:(<strong>NSDL</strong>/PI/2002/0709 dated May 3, 2002, <strong>NSDL</strong>/PI/2004/1401 dated August 5, 2004, <strong>NSDL</strong>/POLICY/2007/0011 dated February 15, 2007, <strong>NSDL</strong>/POLICY/2007/0030 dated June 18, 2007, <strong>NSDL</strong>/POLICY/2007/0049 dated August 21, 2007 and <strong>NSDL</strong>/POLICY/2008/0011 dated February 29, 2008)(i) All DIS must bear pre-stamped Client ID and pre-printed unique identification number (serialnumber). Participants may consider printing the name(s) of account holder(s) as well, on theDIS. Further, if the DIS booklet is issued to an illiterate person, the same should be prestampedas “Thumb Impression”, in case of blind person, DIS booklet should be pre-stampedas “Visually Challenged” and in case of blind illiterate person, DIS booklet should be prestampedas “Visually Challenged and Thumb Impression”.(ii) DIS issued to joint account holders and accounts operated by Power of Attorney holder (POA)may be distinguished either by different coloured stationery or by any other method as theParticipant deems fit.(iii) All DIS booklets must contain a Requisition form that should bear pre-stamped Client ID anda provision to attest the signature of the person to whom the account holder wishes toauthorise to collect the booklet on his/her behalf. Participants may consider printing thename(s) of account holder(s) as well on the Requisition form.(iv) Re-issuance of DIS booklet should strictly be on receipt of Requisition form duly signed by allaccount holder(s). In case a Client reports that the Requisition form has been lost/misplaced/stolen, the Client should make a written request on a plain paper signed by all the accountholders(s) and submit the latest Transaction Statement, for issuance of DIS booklet.(v) A “DIS Issuance Register” should be maintained, which should have details such as Client’sname, Client ID, unique identification number (serial number) of DIS (start and end), date ofissue and mode of issue. In case the DIS booklet is delivered by hand, name of the person towhom it is handed-over (address as well as contact telephone number(s) in case of authorisedperson) alongwith his/her signature should be obtained on the DIS Issuance Register.(vi) The inside back cover of the DIS booklet should be printed with information on GrievancesRedressal Mechanism as intimated vide <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/PI/2004/1286 dated July 19,2004.(3) Mode of providing DIS booklets to Clients:Participants are advised as follows:Sr.No Particulars ActionaWhen a Client's request for DISbooklet is received through post/courier.Send DIS booklet through registered post/courier,to the address of the Client captured in the DPMSystem after duly verifying the signature(s) of theClient(s).bWhen a Client (sole holder oreither of the holders) comes inperson and submits theRequisition form for re-issuanceof DIS.Hand-over DIS booklet to the Client, only aftersatisfying about the identity of the Client.[ 106 ]
Sr.No Particulars ActioncdeWhen a Client authorises arepresentative to collect DIS.In case a Client reports (inwriting) that the Requisition form(slip) has been lost / misplaced/ stolen.In case a request for issuance ofDIS booklet is received throughpost/courier immediately (i.e.within 30 days) after change inthe address in the depositoryaccount of the Client.Hand-over the DIS booklet to the authorisedperson, only after establishing the identity of theauthorised person (refer Circular no. <strong>NSDL</strong>/POLICY/2009/0029 dated April 16, 2009 for list ofidentity documents, which can be obtained byParticipant). However, in case the Participant isnot in a position to establish the identity of theauthorised person, DIS booklet should be sentthrough registered post/courier, to the address ofthe Client.Send DIS booklet through registered post/courier,to the address of the Client registered with theParticipant. However, in case the Client or itsauthorised person comes in person to collect theDIS, it may be handed-over only after the identityof the person is established as mentioned above.Participant should obtain an independentconfirmation (by way of letter/e-mail/telephone)from the Client(s) in this regard, before issuingthe DIS.(4) Issuance of Loose leaf DIS:(<strong>NSDL</strong>/PI/2004/1401 dated August 5, 2004, <strong>NSDL</strong>/POLICY/2007/0011 dated February 15, 2007 and<strong>NSDL</strong>/POLICY/2008/0011 dated February 29, 2008)In case a Client (all the holders in case of joint holding) wishes to submit an instruction but doesnot have the DIS, the Participants are advised as follows:(a) The Client visits the Participant’s office in person;(b) Participant satisfies itself about the identity of the Client and issues loose leaf DIS; and(c) The Client signs the DIS in the presence of authorized official of the Participant.Participants must ensure that the DIS issued to the Client also bears pre-printed unique identificationnumber (serial number), which should be from a different series, and a record thereof is maintained bythe Participant in a “Loose-leaf DIS Register”. The Loose-leaf DIS Register should contain Client’s name,Client ID, serial number of loose-leaf DIS, date of issue and his/her signature. Further, the Participantshall not issue more than 10 loose DIS to one account holder in a financial year (April to March).In addition to the existing process of verification, another staff of Participant should also verify thesignature(s) separately.(5) Checks and Controls required in case Participant is using back office system / Manual controls:(i) Automated checks in the back office system of the Participant:(a) Participants must record the serial numbers and run an automatic check while executingtransactions based on DIS.(b) Ensure that the system has in-built controls for matching of serial numbers with therespective Client IDs and that the system blocks the DIS permanently that have beenused.(c) In case any Client reports (in writing) that DIS(s) has/have been lost/misplaced/stolenor the account is closed, unused serial number(s) should be permanently blocked.[ 107 ]
(d)In case any DIS is presented for execution that has already been used or is part of theseries of DIS which have been reported as lost/misplaced/stolen then the system shouldgive automatic alert, in which case, Participant should contact the Client(s) immediately.(ii) Manual controls:(a) Participants must ensure that a “DIS Control Register” is maintained for recording detailsof serial numbers and Client IDs with which the serial numbers are associated. Participantsshould verify the same at the time of receipt of DIS and make a remark that it has beenused.(b) In case a Client reports (in writing) that DIS is lost/misplaced/stolen or the account isclosed, the same should be cancelled in the DIS Control Register.(c) In case any DIS is presented for execution that has already been used or is part of theseries of DIS, which have been reported as lost/misplaced/stolen then there should bea mechanism to raise an alert, in which case, Participant should contact the Client(s)immediately.(iii) Important note on automation and manual control:(a) Employees of Participant processing DIS should put their signature on the DIS indicatingthat they have verified the signature(s) of the account holder(s) and that the uniqueidentification number (serial number) belongs to that Client. In case of manual controls,employees of Participants, before signing on the DIS, should also ensure that the DISbearing unique number belongs to that Client.(b) There shall also be an indication of the value of the transactions contained in a singleDIS on the system of Participant and in case the value of securities on the DIS amountsto Rs. Five lakh or more, it should be subject to two step verification, especially for offmarket transactions.(c) In case a DIS is received from a dormant account (i.e. where no transaction has takenplace for a period of six months or any other lesser time period as may be decided bythe Participant), in addition to the existing process of verification, another employeeof the Participant should also verify the instruction. The Participant should obtain anindependent confirmation from the Client(s) in this regard before processing the DIS.However, in case of active accounts, such verification is mandatory only if the accounthas five or more ISINs and all such ISIN balance are transferred at a time. The authorizedofficial of the Participant verifying such transactions with the Client, shall record thedetails of the process, date, time, etc. of the verification on the instruction slip underhis signature.Further, in order to facilitate identification of dormant accounts, an alert has beenprovided in the DPM System when Participant captures / verify releases instruction inthe Client accounts where the system has not performed any of the transactions withrelation to Account transfer (Debits), Inter Depository transfer (Debits), Remat andPledge in any of the ISINs for a defined period of time through manual data entry in theDPM System or uploading the instructions through Back-office. Participant can overridethis warning message and continue capture/ verify-Release operation. In case aforesaidinstructions are being executed using DPM import, an error file (“.prn”) will be generatedcontaining warning message.For this, Client accounts that have not executed any of the above transactions for last180 days will be marked as dormant account. Further, Participants may note that afterany debit transaction is executed in a dormant account, it will be marked as nondormantin the EOD process of that day. This implies that alerts will be generated for allinstructions executed on that day for the dormant account till EOD of that day.Participants can also generate Transaction Statement Report for dormant Client accounts,which give the list of transactions that are executed in a dormant account for the daywhen account is marked as non-dormant at EOD. The report will be generated based on[ 108 ]
date range such that Date wise and Client account wise Transaction Statement reportare generated for all the transactions that are executed in dormant accounts on theday when the account was marked from Dormant to Non-Dormant (Refer Circular No.<strong>NSDL</strong>/POLICY/2008/0021 dated April 4, 2008).(d) Participant shall cross check with the Client(s) under exceptional circumstances beforeacting upon the DIS.(e) In case DIS received is pre-signed with blank columns, Participant should not acceptsuch DIS.(6) Execution of transactions based on receipt of electronic instruction:(<strong>NSDL</strong>/POLICY/2008/0002 dated January 11, 2008)Participants can execute transactions based on receipt of electronic instructions from Client afterensuring compliance with Rule 4.5.1 of the Business Rules of <strong>NSDL</strong> and upon receipt of priorapproval from <strong>NSDL</strong>.As per Rule 4.5.1 of Business Rules of <strong>NSDL</strong>, Participants are required to ensure compliance withthe following conditions for accepting instructions in electronic form:“(i) The Participant has adequate systems and security features in place to authenticate theClient and the Client to authenticate the Participant;(ii) The Participant is able to conclusively prove the origin, destination, date and time ofreceipt or dispatch of such electronic instructions received by it;”Explanation:(a) As per the provisions of the Information Technology Act 2000 (IT Act), legal recognitionfor transactions carried out electronically envisages use of digital signature forauthentication of electronic records. Thus, the instructions submitted electronicallyneed to be authorised using Digital Signature Certificate issued by a Certifying Authority(CA) licensed by Controller of CA. This would ensure that the Client itself has submittedthe instruction which cannot be repudiated later. Accordingly, as mentioned in pointnos. (i) and (ii) hereinabove, Participants will be required to establish systems/processin place to confirm that the instructions received in electronic form are indeed digitallysigned by the Client and are not modified subsequent to digitally signing of instructions.Further, the systems/process that Participant establishes must enable the Client toensure that the digitally signed instructions are indeed received by the authorised personof the Participant.(b) Participants will be responsible to establish the procedure that will ensure the validityof digital signature certificate of the Users and will also ensure that the person digitallysigning the instructions is indeed authorised to do so.(c) Participant will be required to establish the procedure which will be followed by theClient for authenticating the Participant.“(iii)The Participant retains such electronic instructions in the format in which it was originallyreceived or sent or in a format which can be demonstrated to represent accurately theinformation which was originally received or sent;”Explanation:(a) Electronic instructions received by the Participants must be authenticated using signatureverification utility (SVU). This is required to ensure that the instructions are indeedreceived from the Client. SVU should be issued by a CA licensed by Controller of CA tovalidate the digitally signed files received from the Client. The SVU will strip the digitalsignature after successful authentication. The new file thus generated afterauthentication must be stored as a different file before uploading/executing in theDPM System so as to keep the original file with the digital signature intact. Participantswill be required to ensure that the authenticated file should not be altered and shouldrepresent accurately the information which was originally received from or sent by the[ 109 ]
Client, before uploading/executing the file in the DPM System. In this regard, Participantswill be liable for any claims that may be raised by the Client on account of any lossarising from execution of instructions which are altered subsequent to stripping thedigital signature.(b) Participants are advised to ensure that the instructions submitted electronically usingdigital signature must be retained alongwith the digital signature for the period asspecified in various regulations.(c) Participants are advised to retain the details of authorised persons who are digitallysigning the instructions for the period as specified in various regulations.“(iv) The instructions received remain accessible and usable for subsequent reference.”Explanation:(a) Participants will be liable to produce these electronic records in a readable form to<strong>NSDL</strong>, SEBI or to any other Statutory Authority, whenever required. As Participants areaware, <strong>NSDL</strong> inspects the records of the Participants at regular intervals. Therefore,the file formats of digitally signed instructions should adhere to either of the file formatsprescribed for DPM System or SPEED-e.(b) The signed file should be such that instruction details can be clearly identified, thus itcan be in a flat file as per backoffice import file formats or SPEED-e import file formatsor a format which is readable directly, without a need to interpret the information inthe file.(c) Participants will be required to provide the SVU that would enable <strong>NSDL</strong> inspectionteam to verify the transactions that are received electronically. Also, Participants willhave to ensure that any new upgrades done by its CA is incorporated in the SVU andprovided to <strong>NSDL</strong> at the time of inspection.General compliance1. Participants must ensure compliance with the prevailing guidelines mentioned above regardingthe requirements of time & date stamping and deadline for submission of electronic instructionsreceived from Client.2. Participants are advised to ensure compliance with respect to the requirements mentioned belowregarding details to be obtained from Clients in respect of ‘Consideration’ and ‘Reasons/Purpose’for off-market transactions.3. Participants should be able to provide the details of the instructions to the <strong>NSDL</strong> inspection teambased on the relevant details provided to the Participants by <strong>NSDL</strong>.4. Participants are advised to follow the procedure mentioned in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0054 dated September 22, 2007 regarding capturing of Power of Attorney holder/AuthorizedSignatory signature and the changes in the back-office module and the file formats in respect ofthe back-office batch interface with the DPM System. Participants are advised to select SignatureType as “Digital” only for those accounts for which <strong>NSDL</strong> has permitted Participants to use digitalsignature for submitting delivery instructions.5. The internal auditors as appointed by Participants will be required to verify that necessary audittrails and checks have been implemented in conformity with <strong>NSDL</strong> prescribed guidelines / circularsand the deviations, if any, may be reported in the internal audit report under point no. 6 Audit ofdelivery instructions (Refer <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2008/0077 dated November 3, 2008).In case no deviations have been reported, it will be treated that the aforesaid requirements havebeen duly complied with by the Participant.6. Participants will be responsible for ensuring compliance with the provisions of Depositories Act,SEBI (Depositories and Participants) Regulations, 1996, The Prevention of Money Laundering Act,2002, Bye Laws and Business Rules of <strong>NSDL</strong>, as well as any other circulars / guidelines issued by<strong>NSDL</strong> from time to time, in this regard.7. Participants can execute transactions based on the electronic instructions after ensuring compliancewith each of the aforesaid conditions in this regard and upon receipt of prior approval from <strong>NSDL</strong>.[ 110 ]
(7) Submission of instructions using SPEED-e facility of <strong>NSDL</strong>:(<strong>NSDL</strong>/PI/2001/1307 dated August 27, 2001, <strong>NSDL</strong>/POLICY/2008/0013 dated March 3, 2008 and<strong>NSDL</strong>/POLICY/SPEED-e/2009/0005 dated June 20, 2009)SPEED-e enables demat account holders of the Participants to issue their delivery instructions, inexpanded time frames and from anywhere directly through internet on SPEED-e website viz.;http:\\speed-e.nsdl.com, thus eliminating the need to submit delivery instructions in paper form.Participants will have to periodically (at least three times a day) download these instructionsfrom SPEED-e website, import them into the DPM System and upload the status of the instructionsback to the site. Participants can access SPEED-e through smart card / e-token based authentication.The files downloaded by the Participant will bear digital signature of the site and files uploadedby the Participant will bear the digital signature of itself. SPEED-e has been designed to meet therequirements of both, the password user as well as smart card / e-token based user. This facilityfeatures smart card / e-token based access authentication and digital signature based transactionauthorisation for the high-end users such as CMs, sub-brokers and traders, high networth individuals,etc. and password based authentication for the low-end users. For more details, Participants mayrefer to <strong>NSDL</strong> Circular No.<strong>NSDL</strong>/PI/2001/1307 dated August 27, 2001 and <strong>NSDL</strong>/POLICY/2008/0013 dated March 3, 2008.Instructions on SPEED-e with current date as the execution date can be executed on SPEED-e bythe Client upto 7:00 p.m. IST on weekdays and 3.00 p.m. IST on Saturdays. However, instructionswith future date as the execution date can be executed at any time, even after the aforementioneddeadline times.(8) Deadline for submission of market instructions on SPEED-e:(<strong>NSDL</strong>/POLICY/SPEED-e/2008/0004 dated April 23, 2008, <strong>NSDL</strong>/POLICY/2009/0050 dated June 26,2009 and <strong>NSDL</strong>/POLICY/SPEED-e/2009/0006 dated July 6, 2009)Participants must take note of the following deadline time for submission of pay-in instructions onSPEED-e, on the pay-in day based on the market type for below given stock exchanges:Name of theS t o c kExchangeMarket TypesRevised deadline time forsubmission of instructions(pertaining to pay-in) byClients on SPEED-e on payinday<strong>NSDL</strong> deadline time forexecution ofinstructions in the DPMSystem on pay-in dayNSESLB First Leg, SLB Return Legand SLB Auction Buy-inNormal, Auction Normal,Trade for Trade, CompanyObjection, Retail DebtMarket, Bad Delivery,Institutional and MFSS T+38.00 am 9.00 am10.00 am 10.40 amBSESLB, SLB-R and Buy inAuction.8.00 am 9.00 amRolling Market Lot 10.00 am 10.40 amAuction Rolling 11.00 am 12.00 noonCompany Objection1.00 pmCSERolling Market Lot andAuction Rolling4.00 pm9.30 am 10.30 am[ 111 ]
Participants must take note of the following:1 In case there are multiple pay-ins of same market type for a stock exchange happening on thesame day, in such a case, the deadline time of submission of instructions on SPEED-e on the payinday would be as follows:Name of theS t o c kExchangeMarket TypesDeadline time for submissionof instructions on SPEED-e(earlier 10.00 a.m.)<strong>NSDL</strong> deadline time forexecution ofinstructions in the DPMSystem (earlier 10.40a.m.)NSENormal, Trade for Trade,Retail Debt Market, BadDelivery and MFSS T+3SLB First Leg, SLB Return Legand SLB Auction Buy-In9.00 a.m. 9.40 a.m.7.00 a.m. 8.00 a.m.BSE Rolling Market Lot 9.00 a.m. 9.40 a.m.SLB First Leg, SLB Return Legand SLB Auction Buy-In7.00 a.m. 8.00 a.m.2. The deadline time for submission of instructions on SPEED-e for other stock exchanges remainsunchanged i.e. submission deadline time on SPEED-e on the pay-in day would be 8.00 am.Participants must ensure that all the instructions submitted by the Clients within the aforesaid deadlinetime are duly executed in the DPM System and in case Participants encounter any difficulty in downloadingthe instructions from SPEED-e, the same should be reported to Help Desk immediately.(9) Instructions received from Clients who have attained majority:(<strong>NSDL</strong>/POLICY/2009/0029 dated April 16, 2009)In case of Minor attaining majority, Participants should ensure that any request or instructionreceived from the guardian, which is to be processed or is having a execution date falling on orafter the date, the Minor has turned Major, shall be processed/executed only after receipt ofconfirmation from the Client (Minor turned Major). Participants should note that the aforesaidguidelines are in addition to the existing guidelines with regard to executing instructions.(10) Instructions received from illiterate person:(<strong>NSDL</strong>/PI/2002/0709 dated May 3, 2002)Participants must follow the below given procedure for execution of DIS received from illiteratepersons:a) The Client(s) must come in person to submit DIS and affix his/her thumb impression in thepresence of the official of the Participant. The Participant should identify the Client(s) byverifying the photograph submitted by the Client(s) and read out/explain the contents ofthe delivery instruction form to the Client(s). The official of the Participant should then puthis signature and remarks “Details explained to the Client(s)”, on the DIS.b) In case such Client(s) is/are temporarily or permanently disabled due to which he/she cannotcome in person to submit the instruction form as mentioned in point (a) above, thethumb impression of the Client(s) on the DIS must be attested by a Magistrate or a NotaryPublic or a Special Executive Magistrate or a similar authority holding a Public Office andauthorised to use the Seal of his office or a manager of the account holder’s bank. The Clientshould also produce a medical certificate about his/her disability.Participants should note that the aforesaid guidelines are in addition to the existing guidelines withregard to executing instructions.[ 112 ]
(11) Instructions received from Blind person:(<strong>NSDL</strong>/POLICY/2007/0049 dated August 21, 2007)In case of DIS received from Blind persons, Participants should follow the existing guidelines with regardto executing instructions. In case such Client is illiterate, he/she should personally visit the office ofthe Participant for submitting the DIS.(12) Instructions received through fax:(<strong>NSDL</strong>/PI/2002/0740 dated May 9, 2002 & <strong>NSDL</strong>/POLICY/2008/0045 dated June 16, 2008)Participants are advised to take note of the following precautions while executing such instructions:1. Participant should obtain a fax indemnity duly signed by all the Client(s)/authorised signatories ofthe account.2. Participant must advise its Clients to mark “This is a fax instruction” on the face of the DIS witha view to identify the same from the original DIS received subsequently. Only such fax instructionsshould be executed by the Participant.3. The Client, while issuing a fax instruction, must use the DIS issued to it by the Participant. TheParticipant should verify the signature(s) of Client(s) / authorised signatory(ies), pre-printed serialnumber and pre-stamped Client ID, as per the existing procedure for processing DIS.4. The staff of the Participant who processes the fax instruction shall put his/her signature on thefax instruction indicating that the signature has been verified and that the DIS belongs to thatClient.5. Participant should affix the time stamp on the fax instruction form as well as on the original DIS,when received and keep both of them together for records.6. Participant should ensure that it receives the original DIS subsequently, latest within three days(excluding Sundays and Bank holidays) from the date of receipt of the fax instruction. In case theParticipant does not receive the original DIS within the stipulated time, it should inform suchClients that the facility of executing instructions received on fax is withdrawn, till the original DISis received.7. Participant must establish suitable procedure to prevent multiple execution of the same instruction.8. Participant should also take such steps to preserve the fax instruction form in legible form.9. Participant, before providing this facility to the Clients, must obtain a suitable insurance cover inthis regard.10. Participants should note that the aforesaid guidelines are in addition to the existing guidelinesregarding execution of delivery instructions.(13) Facility for submitting consolidated delivery instruction slips accompanied by computer printoutsby POA holder (other than Participant) on behalf of its Clients:(<strong>NSDL</strong>/POLICY/2008/0004 dated January 24, 2008)Participants may accept delivery instructions (Annexure L, Annexure LA and Annexure N) accompaniedby computer print-outs from the POA holder, subject to the following conditions:1. A suitable mechanism should be implemented in the back-office system of the Participant toidentify such Clients. In the absence of back-office system, Participant should maintain a separateDIS register (in physical or electronic mode as the Participant may deem fit) containing the detailsof such Clients and POA holder.2. The DIS must bear separate series of pre-printed serial numbers and should be distinguished bydifferent colour or by any other method. Participants may consider printing / stamping the nameof the POA holder on the DIS and requisition form.3. The computer print-outs must contain all the details as specified in Annexure L, LA and N ofBusiness Rules and accompanied by a single DIS (Annexure L, LA and N) as applicable. Further, thesource Client ID should be mentioned against each instruction in the computer print-out.4. Words “Details as per (total) number of pages attached” should be written on DIS.[ 113 ]
5. The pre-printed serial number of the DIS should be mentioned on every page of the computerprintout.6. Every page of the computer printout including DIS should be signed by the POA holder.(14) Facility for acceptance of Consolidated Client Delivery Instructions – computer printouts allowedwhere POA is given by Clients in favour of Participant:(<strong>NSDL</strong>/PI/2000/1953 dated October 19, 2000)In cases when several Clients have signed POA in favour of the Participant for issue of delivery instructions,a consolidated delivery instruction will be valid and separate Client-wise instructions would not benecessary. Participants must ensure the following:1. A duly signed computer printout containing all the details as specified in the delivery instructionform (“Delivery Instructions by Clients” viz., Annexure-L of Business Rules) should be on recordalongwith the Annexure-L. The source Client ID should be mentioned against each instruction inthe computer printout.2. Words “Details as per _______ (total) number of pages attached” should be written on the deliveryinstruction form viz., Annexure-L.3. The pre-printed serial number of the delivery instruction form should be mentioned on every pageof the computer printout.4. Every page of the computer printout and the delivery instruction form should be signed by thePOA holder.5. The delivery instruction forms used for the aforesaid purpose should bear separate series of preprintedserial numbers.(15) Acceptance of Client’s Delivery Instructions accompanied with computer printouts:(<strong>NSDL</strong>/PI/2000/500 dated April 18, 2000)Participants can accept the “Delivery Instructions by Clients” (Annexure-L, LA and N) accompanied bycomputer printouts of the instruction details, subject to the following conditions:1. The computer printout (enclosure) should contain all the details as specified in the deliveryinstruction form.2. Words “Details as per _______ (total) number of pages attached” should be written on the deliveryinstruction form.3. The pre-printed serial number of the delivery instruction form should be mentioned on every pageof the enclosure.4. Every page of the enclosure and the delivery instruction form should be signed by all the accountholder(s)/authorised signatory(ies).(16) Acceptance of instructions accompanied by computer printouts from Clearing Members:(<strong>NSDL</strong>/PI/99/572 dated July 21, 1999)Participants can accept the following delivery instruction forms viz; “Delivery Instructions by ClearingMembers for Pay-In” (Annexure-S), “Delivery Instructions by Clearing Members on Pay-Out” (Annexure-T) and “Inter-Settlement Instructions” (Anexure-SS) accompanied by computer printouts of the instructiondetails, subject to the following conditions:1. The computer printout (enclosure) should contain all the details as specified in the deliveryinstruction form.2. Words “Details as per _______ (total) number of pages attached” should be written on the deliveryinstruction form.3. The pre-printed serial number of the delivery instruction form should be mentioned on every pageof the enclosure.4. Every page of the enclosure and the delivery instruction form should be signed and stamped bythe authorised signatory(ies).[ 114 ]
(17) Computer printouts allowed for other types of instructions:(<strong>NSDL</strong>/PI/2003/0852 dated May 26, 2003)Participants are hereby informed that the procedure mentioned in point no. 15 and 16 above must befollowed while accepting the following types of instructions from their Clients:(i) Pledge/Hypothecation(ii) Inter-Depository Transfers(iii) CM Pool to CM Pool transfers by Clearing MembersIt may be mentioned that annexure attached to the instruction form may contain multiple target ClientIDs with corresponding details.(18) Instructions received for Buy Back / Open Offer:(<strong>NSDL</strong>/PI/2002/1108 dated July 9, 2002)Participants are requested to advise their Clients to submit such instructions at least one working daybefore the date of closure of such offers or prior to such deadline time as may be decided by theParticipant for submission of delivery instructions by Clients. Further, Participant should advise theirClients to mark “Buy back/Open offer” on the face of the instruction slips so as to identify such instructionsand execute them on a priority basis.(19) Incorporation of details in DIS as advised by Financial Intelligence Unit (FIU):(<strong>NSDL</strong>/POLICY/2007/0069 dated November 12, 2007, <strong>NSDL</strong>/POLICY/2007/0071 dated November12, 2007, <strong>NSDL</strong>/POLICY/2007/0072 dated November 23, 2007, <strong>NSDL</strong>/POLICY/2008/0062 datedSeptember 12, 2008 and <strong>NSDL</strong>/POLICY/SPEED-e/2008/0006 dated November 10, 2008)(i) Participants may note that Annexure ‘L’, Annexure ‘N’, Annexure ‘NA’ and Annexure ‘LA’ toBusiness Rules of <strong>NSDL</strong> have been amended to incorporate the details. viz. ‘Consideration’and ‘Reasons/Purpose’ as advised by Financial Intelligence Unit – India(ii) Participants will be required to ensure that additional details as per the guidelines issued byFinancial Intelligence Unit-India (FIU-IND) under The Prevention of Money Laundering Act,2002 (PMLA), has been incorporated in the DIS. Participants should ensure that at the time ofaccepting existing DIS (in old format), for executing the off market transactions, they obtainthe additional details as prescribed above on a plain paper duly signed by the applicant(s).Further, Participants may use the existing DIS till such time the stock of the existing DIS isexhausted.<strong>NSDL</strong> has also incorporated the fields viz., ‘Consideration’ and ‘Reasons/Purpose’ for smart card / e-token Users as SPEED-e enables only the smart card / e-token Users to submit off-market instructions.(20) Processing of DIS :(i) Acknowledgement of instruction at the time of accepting physical / electronic DIS.(a) Physical DIS:(<strong>NSDL</strong>/PI/98/519 dated October 13, 1998)In view of the time-criticality of execution of Clients’ instructions, especially thoserelating to market trades, all Participants are advised that the delivery / receiptinstruction forms submitted by the Clients should be time-stamped. The time and dateof receipt of the form should be put on both the portions of the form i.e., Participant’scopy & Client’s copy which should be duly signed & stamped by the Participant.(b) Electronic submission of instruction:The Participants should be able to conclusively prove the origin, destination, date andtime of receipt of dispatch electronic instructions received by it.(ii) Deadline time for submission of physical / electronic instructions related to pay-in:(<strong>NSDL</strong>/PI/2003/0406 dated March 7, 2003 and <strong>NSDL</strong>/POLICY/2009/0019 dated March 14, 2009)Participants are advised to take note of the procedure given here below:[ 115 ]
(a) Participants shall accept instructions from the Clients, in physical form upto 4 p.m. (incase of electronic instructions upto 6.00 p.m.) on T+1 for pay-in of securities, viz.;instructions to transfer securities from Client account to CM Pool account, Inter-Settlement Instructions, CM Pool to CM Pool account transfers and Delivery-OutInstructions, etc. For example, pay-in for trades executed on ‘Monday’ will be onWednesday. Clients will have to submit instructions to their Participants upto 4 p.m. (incase of electronic instructions upto 6.00 p.m.) on Tuesday.(b) Settlement instructions received from any Client beyond the aforementioned deadlineswould be received by the Participants at Clients’ risk and acknowledgment thereofshould be issued by Participants to the Clients, with suitable remarks.(c) Participants should complete execution of pay-in instructions and ensure that they arein status “Accepted by <strong>NSDL</strong>” well before the pay-in deadline time on T+2.(d) In case the account does not have sufficient balance, the Client to CM Pool accounttransfer instructions will reflect the status ‘Overdue at DM’, irrespective of the executiondate and will remain valid till the pay-in for the requisite settlement number andmarket type, during the pay-in process;i. if partial balance is available in the Client account, then the same will be debitedand transferred to the CM Pool Account. The status of the instruction will getupdated as “Closed, Partially Settled”.ii. if no balance is available in the Client account, then the instruction will get rejected.The status of the instruction will get updated as “Closed Failed during Settlement”.(e) In respect of CM Pool Accounts where standing instruction indicator are not enabled inthe DPM System, Participants are requested to note that delivery instruction from theClient account (with or without security balances) and/or Receipt Instructions from itsCM Pool Account that are unmatched will remain valid till the end of the day (EOD) ofthe execution date.(iii) Deadline time for accepting non pay-in related instructions:(<strong>NSDL</strong>/PI/2004/1911 dated October 21, 2004)SEBI has clarified that Participants can decide their own time frame for submission of suchinstructions by their Clients (i.e. one or two days before the execution date). However,Participants should execute the instruction not later than one day from the date of submissionof instruction by the Client. Further, if the date of submission and the execution date aresame, Participants may execute such instructions on the same day on a “best effort basis”.For example:Date of submission Execution Date Date on which the Participant shouldexecute the instructionOctober 19, 2004 October 20, 2004 On or before October 20, 2004October 19, 2004 October 22, 2004 On or before October 20, 2004October 19, 2004 October 19, 2004 On October 19, 2004 on a "best effort basis"Participants should communicate this information to their Clients through regularcommunications / newsletters as well as put up this information on the notice board forinformation of all their Clients.(iv) Processing of IDT Instructions:(<strong>NSDL</strong>/PI/2002/2138 dated December 12, 2002 and <strong>NSDL</strong>/PI/2002/2180 dated December 19,2002)[ 116 ]
Participants are advised to note the following deadline timings for execution of IDT instructions:Sr. No. Particulars On Week days On Saturdays1 Deadline time for Participants to verify & 6.00 p.m. 2.30 p.m.release IDT delivery/receipt instructions2 <strong>NSDL</strong> deadline time for receiving IDT delivery/ 6.30 p.m. 3.00p.m.receipt instructions from Participants(v) Deadline for Bulk Verify & Release of IDT Instructions:(<strong>NSDL</strong>/POLICY/2007/0042 dated July 23, 2007)Participants are advised to note that the deadline timings for executing bulk verify/releaseof IDT instructions are 5.00 p.m. on weekdays and 1.30 p.m. on Saturdays. An additionalwindow of one hour for executing such IDT instructions through bulk verify/release option isprovided i.e. upto 6.00 p.m. on weekdays and 2.30 p.m. on Saturdays, subject to payment ofan additional charge of Re. 1 per IDT instruction.Participants may therefore note that an additional charge of Re.1 per IDT instruction releasedthrough bulk verify/release after 5.00 p.m. (i.e. between 5.00 p.m. & 6.00 p.m.) on weekdaysand after 1.30 p.m. (i.e. between 1.30 p.m. & 2.30 p.m.) on Saturdays will be levied to theParticipants.Participants are advised to exercise prudence while executing IDT instructions through bulkverify/release facility. This precaution is necessary as these instructions require acceptanceby the other depository within the mutually agreed time frame and any bunching of instructionswill unduly strain the system. Therefore, Participants are advised to execute IDT instructionsthrough bulk verify/release facility at periodic intervals so that the load on the network isdistributed throughout the day.(vi) Execution date of instructions falling on a Sunday or any other DM holiday:(<strong>NSDL</strong>/POLICY/2008/0079 dated November 5, 2008 and <strong>NSDL</strong>/PI/2001/0812 dated June 11,2001)Participants are advised to note that account transfer (debiting beneficiary or Clearing MemberPool accounts), pool to pool, inter-settlement, inter-depository and pledge related instructionsthat are verified/released in the DPM System with execution date falling on a Sunday or anyother DM holiday will be executed on the next business day. In this regard, Participants areadvised to note that such instructions should be received by <strong>NSDL</strong> and status of the instructionsin the DPM System should be “Future dated Order received by <strong>NSDL</strong>” before EOD of:(i) Saturday if the execution date happens to be a Sunday,(ii) previous business day if the execution date happens to be a DM holiday.Participants are requested to note that delivery-out instructions should be received by <strong>NSDL</strong>before the pay-in deadline time.(vii) Restriction on processing of DIS at franchisee:(<strong>NSDL</strong>/PI/2005/2088 dated October 28, 2005)Participants should ensure that the functions of verification of DIS serial numbers, signature(s)of authorised signatories and release of instructions should be carried out by the Participantitself and not left to the franchisee.(21) Internal and Concurrent Audit - Control and Verification of Delivery Instruction Slips:(<strong>NSDL</strong>/POLICY/2008/0077 dated November 3, 2008)The scope of concurrent audit with respect to control and verification of DIS should cover theareas given below:[ 117 ]
(I) Issuance of DISThe procedure followed by the Participants with respect to:(a) Issuance of DIS booklets including loose slips.(b) Existence of controls on DIS issued to Clients including pre-stamping of Client ID andunique pre-printed serial numbers.(c) Record maintenance for issuance of DIS booklets (including loose slips) in the backoffice.(II) Verification of DISThe procedure followed by the Participants with respect to:(a) Date and time stamping (including late stamping) on instruction slips.(b) Blocking of used/reported lost/stolen instruction slips in back office system / manualrecord.(c) Blocking of slips in the back office system / manual record which are executed in DPMdirectly.(d) Two step verification for a transaction for more than Rs. 5 lakh, especially in case ofoff-market transactions.(e) Instructions received from dormant accounts.The Concurrent Auditor should carry out 100% verification with respect to control over issuanceand acceptance of DIS booklets including loose slips; however with respect to verification(execution and processing) of DIS, auditor should verify atleast 25% of the DIS processed. Thesample percentage checked in this regard should be mentioned in the Concurrent AuditReport.The Concurrent Auditor should conduct the audit in respect of DIS/IDDIS issued and controlson DIS/IDDIS as mentioned above, during the day, by the next working day. In case the auditcould not be completed within the next working day due to large volume, the auditor shouldensure that the audit is completed within a week’s time.Any deviation and/or non-compliance observed in the aforesaid areas should be mentionedin the audit report of the Concurrent Auditor. The Management of the Participant shouldcomment on the observations made by the Concurrent Auditor.Participants may note that if the Auditor for Internal and Concurrent Audit is the same,consolidated report may be submitted.Participants will be responsible for ensuring compliance with the provisions of DepositoriesAct, SEBI (Depositories and Participants) Regulations, 1996, The Prevention of MoneyLaundering Act, 2002, Bye Laws and Business Rules of <strong>NSDL</strong>, as well as any other circulars /guidelines issued by <strong>NSDL</strong> from time to time, in this regard.(22) Precautions to be taken at the time of accepting market related instructions:1. The instructions relating to settlements should be segregated for each stock exchange, markettype and settlement number. These instructions include delivery-out instructions, Client toCM Pool Transfer, inter-settlement transfers, CM Pool to CM Pool transfers and Inter Depositorytransfers with the target settlement pertaining to which pay-in is due. Priority should begiven to the instructions relating to the settlements for which Pay-in date is current date ornext date.2. The execution of the instructions in DPM System for each stock exchange, market type andsettlement number should be prioritised in a logical manner. Instructions that have theeffect of crediting the CM Pool Accounts for a settlement, such as Client to CM Pool Transfer,inter-settlement transfers, CM Pool to CM Pool transfers and Inter Depository transfers shouldbe given priority.3. Instructions such as CM Pool transfer to client, client to client and pledge closure that havethe effect of crediting those Clients account from where the securities have to be moved to[ 118 ]
CM Pool Accounts for the target settlement should be executed well in advance.4. Participants should ensure that IDT instructions are verified & released well before the deadlineso that the status of the instruction become ‘Accepted by <strong>NSDL</strong>’ at <strong>NSDL</strong> deadline time.However, future dated instructions can be verified & released without any time restrictionas per the current practice. In case any IDT instruction is received by <strong>NSDL</strong> after <strong>NSDL</strong>deadline time, then the same will fail with the status ‘Closed, Rejected by <strong>NSDL</strong>’ with thereason ‘<strong>NSDL</strong> deadline time has passed’. If CDSL rejects <strong>NSDL</strong>’s inter depository debitinstructions (IDDs) in case it receives IDD after the deadline time of the current businessdate, the status of IDT instructions will change from ‘Accepted by <strong>NSDL</strong>’ to ‘Closed, Rejectedby Other Depository’.5. In case the Participant has verified/released many future dated instructions or many accountsare opened after EOD or there are multiple pay-ins on the next day the Participants arerequested to ensure that the BOD of next business day should be received early (say at 7.30a.m.) on such days in order to process all pending instructions.6. Non-settlement related instructions like account opening, dematerialisation, rematerialisation,etc. should not be captured/verified & released or exports should not be taken duringsettlement timings.7. Monitoring of instructions:(a) Participants should ensure that the instructions that have the effect of crediting theCM Pool Accounts for a settlement, such as Client to CM Pool Transfer, inter-settlementtransfers, CM Pool to CM Pool transfers and Inter Depository transfers are in the status“Closed, Settled” atleast one hour before the <strong>NSDL</strong> Deadline time.(b) Participants should ensure that the delivery-out instructions are in the status “Acceptedby <strong>NSDL</strong>” at <strong>NSDL</strong> deadline time. In case the instructions are in any other status including“In Transit to <strong>NSDL</strong>” for a long time, Participants should report to <strong>NSDL</strong> Help-Deskimmediately.(c) In case the client account does not have sufficient balance, the Client to CM Poolaccount transfer instructions will reflect the status ‘Overdue at DM’, irrespective ofthe execution date and will remain valid till the pay-in for the requisite settlementnumber and market type, during the pay-in process;(i) if partial balance is available in the Client account, then the same will be debitedand transferred to the CM Pool Account. The status of the instruction will getupdated as “Closed, Partially Settled”.(ii) if no balance is available in the Client account, then the instruction will get rejected.The status of the instruction will get updated as “Closed Failed During Settlement”.(d) Participants may note that instructions such as account transfers, inter-settlementtransfers, CM Pool to CM Pool transfers, Delivery Outs and Inter Depository transferscan be captured and verified/released even if BOD has not been received by the DPMSystem.Thus, the instructions which are verified/released before the receipt of BOD will betransmitted to <strong>NSDL</strong> immediately if Participant’s DPM system is connected to <strong>NSDL</strong> andsuch instructions will be processed provided all the services are running successfully atthe Participant’s end. However, Participants are advised to remain in contact with <strong>NSDL</strong>Help Desk and also ensure that all instructions have been transmitted to <strong>NSDL</strong>. Further,the status of such instructions may appear as “In Transit to <strong>NSDL</strong>” in the DPM Systemand once the BOD is received, the status will change to “Overdue at DM” / “Acceptedby <strong>NSDL</strong>” / “Closed, Settled” / “Closed, Rejected by <strong>NSDL</strong>”, as the case may be.(e) In case of IDT instructions the statii will change from “Accepted by <strong>NSDL</strong>” to “Sent toOther Depository” to “Closed, Settled” / “Closed, Rejected by Other Depository”.(f) Participants are requested to ensure proper monitoring of the Delivery-Out Instructionsespecially those which are in the status of “Overdue at DM” on account of partial or nil[ 119 ]
(g)balances existing in the CM Pool accounts. In this context, all Participants are advisedto note and ensure the following:(i) On Verify/release the Delivery-out Instruction will go into the status “In Transitto <strong>NSDL</strong>” irrespective of sufficient balances available in the CM Pool Account. Incase of insufficient balances, the status of the instruction will change to “Overdueat DM” and will remain in that status till such time the balance available in the CMPool Account for the relevant settlement is less than the order quantity of theDelivery-Out Instruction.(ii) On receipt of credit for the full order quantity in the CM Pool Account, the Delivery-Out Instruction is triggered and the status changes to “Accepted by <strong>NSDL</strong>”.(iii) At <strong>NSDL</strong> Deadline time, if the balance in the CM Pool Account does not becomeequal to the order quantity, then such Delivery-Out Instruction which is in thestatus “Overdue at DM” will be executed partially to the extent of balance availablein the CM Pool Account. The status of such Delivery-out Instruction will change to“Accepted by <strong>NSDL</strong>” .The partially executed quantity is displayed on the Delivery-Out Instruction screen separately against the field “Delivered Quantity”.(iv) Participants must monitor the status of such partially executed Delivery-OutInstructions at the <strong>NSDL</strong> Deadline time in the Delivery-Out Instruction screen byselecting the flag for the field “See only Partial Delivery-out Instructions” andquerying on the same.(v) At <strong>NSDL</strong> Deadline time if there is no balance in the CM Pool Account, then theDelivery-Out Instruction which is in the status “Overdue at DM” will fail with thestatus “Closed, Failed during settlement” with the reason “Insufficientpositions”.(vi) Such instructions in the status “Overdue at DM” will remain in that status waitingfor sufficient balance till the <strong>NSDL</strong> deadline time. On receipt of credit for the fullorder quantity in the CM Pool Account in the late pay-in window, the Delivery-OutInstruction is triggered and the status changes to “Accepted by <strong>NSDL</strong>”.(vii) At the <strong>NSDL</strong> deadline time, if there is still no balance in the CM Pool Account, thenthe Delivery-Out Instruction which is in the status “Overdue at DM” will fail withthe status “Closed, Failed during settlement” with the reason “Insufficientpositions”.(viii)Participants should ensure that the Delivery-Out Instructions are in the status“Overdue at DM” or “Accepted by <strong>NSDL</strong>” atleast 30 minutes before the <strong>NSDL</strong>Deadline time.Further, with respect to instructions remaining in status “In transit to <strong>NSDL</strong>”, Participantsare advised that the “Message Control Panel” under GISMO allows the Participants to viewthe status of incoming and out-going messages. The outgoing messages can be viewed in the“Transmit” queue. Participants should monitor the status of the messages, especially themessages which are in status “To be Transmitted” or “In Transmission “, at regular intervals.In order to find the latest status, Participant should query repeatedly since message controlpanel does not refresh automatically. The messages in the transmit queue undergoes thefollowing status changes which are highlighted with the following colours:Status Reason ColourTo beTransmittedIn TransmissionMessage is waiting in queue to be transmitted to <strong>NSDL</strong>.Message has been picked by comms service for deliveringto <strong>NSDL</strong> but waiting for acknowledgment from <strong>NSDL</strong>.RedYellowTransmitted The message has received acknowledgment from <strong>NSDL</strong>. White[ 120 ]
Status Reason ColourOthersTransmitted byDATWhen there is a message format mismatch between the DPMand <strong>NSDL</strong> systems. In such case an error number will beindicated in the status field.In case of network failure when the messages have beensent to <strong>NSDL</strong> via Magnetic media instead of online linkBlueGrey(h) Participants are also advised to note the following:(i) The status of the messages will change from “To be Transmitted” to “In Transmission”and finally to “Transmitted”, provided <strong>NSDL</strong> Interface Transmit, <strong>NSDL</strong> Interface Receiveand Comms services are running without any application errors.(ii) In case the messages remain in status “To be Transmitted” or “In Transmission” for along time or in status “Others”, Participant should inform <strong>NSDL</strong> Help Desk immediately.(iii) Participants must ensure through GISMO panel that Communications to <strong>NSDL</strong>, <strong>NSDL</strong>Interface Transmit, <strong>NSDL</strong> Interface Receive, Ping to <strong>NSDL</strong> and Ping to router arefunctioning successfully. However, if Communications to <strong>NSDL</strong>, <strong>NSDL</strong> Interface Transmitand <strong>NSDL</strong> Interface Receive stops or Ping to <strong>NSDL</strong> and Ping to router fails, Participantmust report the same to <strong>NSDL</strong> Help Desk immediately.(i) Participants can also monitor instructions which are not closed / settled by selecting thestatus “All except closed settled” and querying on the same. This facility is provided forfollowing type of instructions:1) Account Transfer2) Multiple Account Transfer3) CM Pool to CM Pool Transfer4) Delivery Out Instruction5) Inter Settlement Transfer Instruction6) Inter Depository Transfer(j) Participants can also use the screen available on the <strong>NSDL</strong> GISMO called ‘Transmit messagecount’ which automatically refreshes every 30 seconds giving the count of message in thetransmit queue at various stages. Any problem in transmitting instructions to <strong>NSDL</strong> can beeasily detected by checking the count on this screen.Participants may refer the following circulars for monitoring of Messages:Sr. no. Circular No. Date of Circular Particulars(i) <strong>NSDL</strong>/PI/99/199 March 26, 1999 Precautions to be taken at the time ofaccepting market related instructions(ii) <strong>NSDL</strong>/PI/2000/292 March 10, 2000 Precautions to be taken after acceptance ofDelivery Out instructions from ClearingMember(iii) <strong>NSDL</strong>/PI/2002/1004 June 22, 2002 Monitoring of Messages in DPM and GISMO(iv) <strong>NSDL</strong>/PI/2002/2138 December 12,2002Monitoring of December 12, 2002in DPM andGISMO(v) <strong>NSDL</strong>/PI/2005/1898 October 5, 2005 Measures available in DPM system for BusinessContinuity(vi) <strong>NSDL</strong>/POLICY/2008/ April 4, 2008 Reports for instructions in status "Other than0021Closed/Settled"[ 121 ]
Instructions - GuidelinesCircular No :Attention of all Participants is invited to the following decisions taken in the<strong>NSDL</strong>/PI/979/199 SEBI meeting of the Working Group on Dematerialisation held on March 23,Date: March 26, 1999 1999 in order to streamline and smoothen the handling of settlement process:a. Participants shall instruct their non-institutional Clients (includingClearing Members) to send in their settlement instructions to reach theParticipants' offices atleast 24 hours i.e. one working day prior to thepay-in date.b. The institutional Clients could send in their instructions to theParticipants on the pay-in day not later than 10.30 a.m.c. Settlement instructions received from any Client beyond theaforementioned deadlines would be received by the Participants atClients' risk and acknowledgment thereof should be issued by Participantsto the Clients, with suitable remarks.d. The pay-in deadline for delivery of securities in respect of weeklysettlements of NSE & BSE will be 3.00 p.m. on the pay-in day and anadditional window will be provided for late pay-in till 6.00 p.m. on thesame day with payment of late fees.With regard to (d) above, it has been decided that a late fee @ 0.25% of thevalue of securities delivered from the CM Accounts to the Clearing Corporation,subject to a maximum of Rs. 50,000/- per DP per settlement, shall be chargedto the Participant. The late fee will be charged with effect from the weeklysettlements of NSE and BSE falling due on or after April 12, 1999. The questionof extending the similar procedure for weekly settlements of other exchangesas well as for rolling settlements is under consideration and Participants willbe duly informed when the procedure is extended to other settlements.All Participants are hereby advised to adhere to the above instructions andinform their Clients accordingly. Participants are also advised to observe thefollowing operating guidelines for execution of settlement related instructions:1. The instructions relating to settlements should be segregated for eachstock exchange, market type and settlement number. This should includedelivery-out instructions, Client to CM Pool Transfer instructions andinter-settlement instructions with the target settlement pertaining towhich pay-in is due.2. The execution of the transactions in DPM for each stock exchange,market type and settlement number should be prioritised in a logicalmanner. Transactions that have the effect of crediting the CM PoolAccounts for a settlement, such as Client to CM Pool Transfer instructionsand inter-settlement instructions should be given priority over deliveryoutinstructions for that settlement.3. Transactions that have the effect of crediting those Clients accountfrom where the securities have to be moved to CM Pool Accounts forthe target settlement should be executed well in advance. Acceptanceand execution of such instructions at the last moment should not beentertained.4. Participants should ensure that the transactions that have the effect ofcrediting the CM Pool Accounts for a settlement, such as Client to CMPool Transfer instructions and inter-settlement instructions are in the[ 122 ]
status "Closed, Settled" atleast one hour before the <strong>NSDL</strong> Deadline time.In case the instructions are in any other status, Participants shouldreport to <strong>NSDL</strong> Help-Desk immediately after following guidelines givenbelow at nos. 6, 7 & 8.5. Participants should ensure that the delivery-out instructions are in thestatus "Accepted by <strong>NSDL</strong>" at <strong>NSDL</strong> Deadline time. In case the instructionsare in any other status, Participants should report to <strong>NSDL</strong> Help-Deskimmediately after following guidelines given below at nos. 6, 7 & 8.(Also refer Circular No. <strong>NSDL</strong>/PI/98/353 dated August 6, 1998)6. When the transactions are in the status "In Transit to <strong>NSDL</strong>" for a longtime, the fact should be reported to <strong>NSDL</strong> Help-Desk immediately.7. The Participant should continuously monitor that all the three services(communications, transmit & receive) are running. In case it is foundthat any of the services are stopped, the Participant should verifywhether any errors are displayed on the server by pressing ALT+TAB andreport the same to <strong>NSDL</strong> Help-Desk immediately.8. A token number should be obtained for all calls logged-in at the Help-Desk.9. In case the Participant has verified/released many future datedinstructions or many accounts are opened after EOD or there are majorpay-ins on the next day, the BOD of next business day should be receivedearly (say at 7.30 a.m.) on such days in order to process all pendingtransactions.10. Non-settlement related instructions like account opening,dematerialisation, rematerialisation, etc. should not be captured/verified & released or exports should not be taken during settlementtimings.11. While importing-exporting transactions/data in the DPM, the followingshould be ensured:i. Imports-Exports should be done preferably after completion ofEOD process. In case of emergencies, imports may be done duringbusiness hours.ii. Receive and transmit services should be manually stopped beforeimport-export. It should be started again manually through GISMOafter completion of the import-export.iii. It should be ensured through GISMO that no user is logged-in fromany of the Client machines i.e., the DPM system should be onunimode basis at the time of taking any import-export.Facilities have been given to Participants to monitor successful execution ofinstructions and DPs must train their staff to monitor such execution.Instructions - Guidelines for Participants having CM accountsCircular No :In view of the release of DPM software version 2.6 which will be operational<strong>NSDL</strong>/PI/2000/292 from March 13, 2000, all Participants having Clearing Member Accounts areDate : March 10, 2000 requested to note and ensure the following for the purpose of monitoringDelivery Out Instructions :1. On Verify/release the Delivery-out Instruction will go into the status "InTransit to <strong>NSDL</strong>" irrespective of sufficient balances available in the CM[ 123 ]
Pool Account. In case of insufficient balances, the status of theinstruction will change to "Overdue at DM" and will remain in that statustill such time the balance available in the CM Pool Account for therelevant settlement is less than the order quantity of the Delivery-OutInstruction.2. On receipt of credit for the full order quantity in the CM Pool Account,the Delivery-Out Instruction is triggered and the status changes to"Accepted by <strong>NSDL</strong>".3. At <strong>NSDL</strong> Deadline time, if the balance in the CM Pool Account does notbecome equal to the order quantity, then such Delivery-Out Instructionwhich is in the status "Overdue at DM" will be executed partially to theextent of balance available in the CM Pool Account. The status of suchDelivery-out Instruction will change to "Partially Accepted by <strong>NSDL</strong>".The partially executed quantity is displayed on the Delivery-OutInstruction screen separately against the field "Delivered Quantity".4. Participants must monitor the status of such partially executed Delivery-Out Instructions at the <strong>NSDL</strong> Deadline time in the Delivery-Out Instructionscreen by selecting the flag [ ] for the field "See only Partial DeliveryoutInstructions" or by selecting the status "Partially Accepted by <strong>NSDL</strong>"and querying on the same.5. At <strong>NSDL</strong> Deadline time if there is no balance in the CM Pool Account,then the Delivery-Out Instruction which is in the status "Overdue at DM"will fail with the status "Closed, Failed during settlement" with thereason "Insufficient positions".6. In case of those settlements where the facility of late pay-in window isprovided, the Delivery-Out Instruction will be executed to the extentof balance available in the CM Pool Account at the first <strong>NSDL</strong> deadlinetime and the status of the same will be updated to "Partially Acceptedby <strong>NSDL</strong>" or "Accepted by <strong>NSDL</strong>". If no balance is available in the CMPool account at the first <strong>NSDL</strong> deadline time, the Delivery-Out Instructionwill continue to remain in status "Overdue at DM". Participants mustmonitor such Delivery-Out Instructions which are still in status "Overdueat DM" at the <strong>NSDL</strong> Deadline time by selecting the status "Overdue atDM" and querying on the same.7. Such instructions in the status "Overdue at DM" or "Partially Acceptedby <strong>NSDL</strong>" will remain in that status till the final <strong>NSDL</strong> deadline timewaiting for sufficient balance . On receipt of credit for the full orderquantity in the CM Pool Account in the late pay-in window, the Delivery-Out Instruction is triggered and the status changes to "Accepted by<strong>NSDL</strong>".8. At the final <strong>NSDL</strong> deadline time, if there is still no balance in the CMPool Account, then the Delivery-Out Instruction which is in the status"Overdue at DM" will fail with the status "Closed, Failed duringsettlement" with the reason "Insufficient positions".9. Participants should ensure that the transactions that have the effect ofcrediting the CM Pool Accounts for a settlement, such as Client to CMPool Transfer instructions, inter-settlement instructions and interdepositoryinstructions are in the status "Closed, Settled" atleast onehour before the <strong>NSDL</strong> Deadline time.10. Participants should ensure that the Delivery-Out Instructions are in the[ 124 ]
status "Overdue at DM" or "Accepted by <strong>NSDL</strong>" atleast 30 minutes beforethe <strong>NSDL</strong> Deadline time.11. Participants must ensure through GISMO panel that Communications to<strong>NSDL</strong>, <strong>NSDL</strong> Interface Transmit, <strong>NSDL</strong> Interface Receive as well as Pingto <strong>NSDL</strong> is functioning successfully when there are Delivery-OutInstructions in the status "In Transit to <strong>NSDL</strong>". If any of the aboveprocesses are stopped due to an error, Participants must report thesame to the <strong>NSDL</strong> Help-Desk immediately. Whenever an error messageis displayed on the DPM server do not click on the "OK" button of theerror message. Participants must report the same to the <strong>NSDL</strong> Help-Desk immediately on direct telephone numbers 022-4976341, 4937026,4945177 or on board nos. 4972964-70 at Extn. Nos. 4630-39. Also pleasenote that the DPM system should not be switched off and back-upsshould not be taken until all Delivery-out Instructions for the day'ssettlements become "Accepted by <strong>NSDL</strong>".12. A token number must be obtained by the Participants for all callsreported on <strong>NSDL</strong> Help-Desk.In addition to the above, it is reiterated that the operating guidelines forexecution of settlement related instructions given in Circular No. <strong>NSDL</strong>/PI/99/199 dated March 26, 1999 (copy enclosed) must be strictly adhered to andensure successful execution of instructions.Circular No :It is observed that some of the Participants do not adhere to the operating<strong>NSDL</strong>/PI/99/745 discipline relating to execution of settlement related instructions. ParticipantsDate: September 17, having Clearing Member Accounts have to ensure proper monitoring of the1999 Delivery-Out Instructions especially those which are in the status of "Overdue"on account of partial or nil balances existing in the CM Pool accounts. In thiscontext, all Participants are advised to note and ensure the following :1. Delivery-out Instruction remains in "Overdue" status till such time thebalance available in the CM Pool Account for the relevant settlement isless than the order quantity of the Delivery-Out Instruction.2. On receipt of credit for the full order quantity in the CM Pool Account,the Delivery-Out Instruction is triggered and the status changes to "Intransit to <strong>NSDL</strong>" and then to "Accepted by <strong>NSDL</strong>".3. If the balance in the CM Pool Account does not become equal to theorder quantity by the <strong>NSDL</strong> Deadline time, then the Delivery-OutInstruction will be executed partially to the extent of balance availablein the CM Pool Account. The status of the partially executed DeliveryoutInstruction will change to "In transit to <strong>NSDL</strong>" only at the <strong>NSDL</strong>Deadline time and then to "Accepted by <strong>NSDL</strong>". The partially executedquantity is displayed on the Delivery-Out Instruction screen separatelyagainst the field "Delivered Quantity".4. Participants must monitor the status of such partially executed Delivery-Out Instructions at the <strong>NSDL</strong> Deadline time in the Delivery-Out Instructionscreen by selecting the flag [4] for the field "See only Partial DeliveryoutInstructions" and querying on the same.5. If there is no balance in the CM Pool Account at <strong>NSDL</strong> Deadline time,then the Delivery-Out Instruction which are in "Overdue" status will failwith the status "Closed, Failed during settlement" with the reason"Insufficient positions".[ 125 ]
6. Participants must ensure through GISMO panel that Communications to<strong>NSDL</strong>, <strong>NSDL</strong> Interface Transmit, <strong>NSDL</strong> Interface Receive as well as Pingto <strong>NSDL</strong> is functioning successfully especially at <strong>NSDL</strong> Deadline timewhen there are Delivery-Out Instructions in the "Overdue" status. If anyof the above processes are stopped due to an error, Participants mustreport the same to the <strong>NSDL</strong> Help-Desk immediately. Whenever an errormessage is displayed on the DPM server do not click on the "OK" buttonof the error message. Also please note that the DPM system should notbe switched off and back-ups should not be taken until all Delivery-outInstructions for the day's settlements become "Accepted by <strong>NSDL</strong>".7. If the "Overdue" Delivery-out Instructions do not become"Accepted by<strong>NSDL</strong>" within 15 minutes of <strong>NSDL</strong> Deadline time, Participants must reportthe same to the <strong>NSDL</strong> Help-Desk immediately on direct telephonenumbers 022-4976341*, 4937026, 4945177 or on board nos. 4972964-70at Extn. Nos. 4012, 4037, 4038 or 4516*.8. A token number must be obtained by the Participants for all callsreported on <strong>NSDL</strong> Help-Desk.In addition to the above, it is reiterated that the operating guidelines forexecution of settlement related instructions given in Circular No. <strong>NSDL</strong>/PI/99/199 dated March 26, 1999 (copy enclosed) must be strictly adhered to andensure successful execution of instructions.Instructions - Acceptance deadline for Rolling SettlementsCircular No :Participants are hereby advised that Securities and Exchange Board of India<strong>NSDL</strong>/PI/2002/0583 (SEBI) has issued a circular no. D&CC/FITTC/CIR-07/2002 dated April 8, 2002Date : April 8, 2002 stating that it has been decided that the Participant shall execute client'sinstructions received 24 hours before pay-in time of the respective StockExchanges. This means, the clients must submit the delivery instruction slipsto the Participants atleast 24 hours before the pay-in time (<strong>NSDL</strong> deadline) asshown in DPM system. Any instructions received after such time may also beexecuted at the risk of the client. In this context, Participants are advised toensure compliance with the requirements of time and date stamping of thedelivery instruction forms submitted by their clients (ref.: Circular no. <strong>NSDL</strong>/PI/98/519 dated October 13, 1998). Participants are also advised to revisetheir deadlines prescribed to the clients for submission of delivery instructionsin view the above instructions.Circular No :As all Participants are aware, compulsory rolling settlements for the 10 scrips<strong>NSDL</strong>/PI/2000/018 specified by SEBI are scheduled to commence with effect from January 10,Date : January 7, 2000 2000. In this context, your attention is invited to our Circular No. <strong>NSDL</strong>/PI/99/839 dated October 29, 1999 (copy enclosed) advising all Participants aboutthe schedule for submission and execution of delivery instructions.Participants are once again advised to inform their clients (including clearingmembers) to submit the delivery instructions atleast two days prior to thepay-in day. Further, all delivery instructions including Delivery-out must beexecuted in the DPM System by the Participants atleast one day prior to thepay-in day.Circular No :The Sub Group of the SEBI Committee on Rolling Settlement has drawn out a<strong>NSDL</strong>/PI/99/839 schedule for the activities to be conducted/undertaken by stock exchanges,Date: October 29, depositories, depository participants, trading members and clients. The extract1999 of the same is enclosed for your information and necessary action. In this[ 126 ]
context, Participants are advised to inform their clients (including clearingmembers) that the delivery instructions for the rolling settlements must besubmitted atleast two days (one day in case of auction) prior to the pay-inday. Participants are further advised that all the delivery instructions includingDelivery-Out must be executed in the DPM system atleast one day prior tothe pay-in day.Instructions - Procedure for Online Inter Depository Transfer of SecuritiesCircular No :Sub : Inter-depository transfer instructions<strong>NSDL</strong>/POLICY/All Participants are hereby informed that CDSL has intimated to <strong>NSDL</strong> that in2009/0052 case of interdepository transfer instructions where securities are to be creditedDate: June 30, 2009 to the Clearing Member Accounts maintained with CDSL, with effect fromJuly 4, 2009, it is mandatory to capture target settlement ID details of CDSLas mentioned by Clients / Clearing Members in the inter depository instructionslips, otherwise, the same will not be considered for settlement at CDSL.Participants are requested to take note of the above.Precaution while processing DIS and Despatch of transaction statementCircular No :It has been brought to <strong>NSDL</strong>'s notice that a franchisee of a Participant has<strong>NSDL</strong>/PI/2005/2088 misused securities lying in the clients' accounts by debiting the accountsDate : October 28, without proper authorisation from the account holders and not issuing proper2005 Transaction Statements at stipulated intervals. In this background, in orderto strengthen the checks and balances in the system, Participants are advisedto follow the instructions given below:1. The functions of verification of Delivery Instruction Slip (DIS) serialnumbers, signature(s) of authorised signatories and release ofinstructions should be carried out by the Participant itself and not leftto the franchisee.2. Those Participants who are servicing their clients through the back officesystems should have a mechanism in place whereby the balances as perback office system are reconciled on the daily basis with the DPM-DPsystem. The internal auditor of the Participant should state in itsquarterly audit report whether such a mechanism exists and whetherthe auditor has found it to be satisfactory. The first such report shouldbe filed with <strong>NSDL</strong> in the audit report for the quarter ending December31, 2005.3. It is reiterated that the internal auditor should carry out a randomcheck whether the Transaction Statements generated from the backoffice system are same as from the DPM-DP system and mention theresults of such a check in every quarterly report.Participants are once again advised to ensure that Transaction Statementsrequired to be given to the clients as per Business Rule 14.3.1 of <strong>NSDL</strong>, aredispatched directly to the addresses of clients as per records (e.g. accountopening form) of the Participant and are not distributed through franchisees.(Circular No. <strong>NSDL</strong>/PI/99/823 dated October 20, 1999.)[ 127 ]
Instructions - Serial number validation for Inter-depository instructions & NCFM certificatesCircular No :<strong>NSDL</strong>/PI/2003/0356Date: March 3, 2003Attention of Participants is invited to Rule 18.1.1 (xiii) (Rule 18.1.1(13) w.e.f.April 1, 2003 notified vide our Circular No. <strong>NSDL</strong>/PI/2003/0321 dated February25, 2003) of the Business Rules of <strong>NSDL</strong> regarding levy of penalty on accountof no/inadequate control over issuance and/or acceptance of instruction slips.Participants are advised to note that slip number validation is also applicablefor Inter-depository instructions and for any violation, penalty will be leviedaccordingly.Further, if the number of qualified persons does not equal the total numberof service centres, penalty is levied as per Rule 18.1.1 (x) (Rule 18.1.1 (17)w.e.f. April 1, 2003 notified vide our Circular No. <strong>NSDL</strong>/PI/2003/0321 datedFebruary 25, 2003). In this context, Participants are advised to maintain alist of NCFM qualified personnel and copies of certificates at the main officeso as to enable <strong>NSDL</strong> officials visiting Participant's office, to verify the details.b. Controls on DI formsRule 4.5.3The Participant shall not accept any instruction for debit or pledge of securitiesfrom a Client unless the Participant has fully satisfied itself that the instructionhas been given by the Client itself. In respect of instructions received inpaper form, the Participant shall ensure that the Client submits the instructionsonly on an instruction form issued by the Participant to the Client by verifyingthe instruction forms with its records pertaining to serial numbers of instructionforms issued to the Clients.Instructions - DI form - Serial number controlCircular No :<strong>NSDL</strong>/PI/99/64Date: January 25, 1999It has been reported in certain sections of press that some Participants arenot maintaining records of pre-printed serial numbers of the instruction forms(especially relating to debit instructions) issued to their Clients. As a result,there is inadequate internal control over processing of debit instructions. Inthis context, we would like to advise that <strong>NSDL</strong> is in the process of amendingits Business Rules to require Participants to maintain such records and control.In the meanwhile, all Participants are advised to ensure that proper recordsrelating to serial numbers of instruction forms issued to the Clients aremaintained in their back-office in their own interest and in the interest oftheir Clients. Further, any instruction for debit of a Client account submittedon an instruction form other than the one issued to a Client should not beaccepted unless the Participant has fully satisfied itself that the instructionhas been given by the Client itself.Instructions - SEBI's stipulated procedures for issuance and verificationCircular No :<strong>NSDL</strong>/PI/2000/834Date : June 2, 2000Further to Circular Nos. <strong>NSDL</strong>/PI/2000/341 dated March 24, 2000 and <strong>NSDL</strong>/PI/2000/499 dated April 18, 2000 regarding records of serial numbers ofdelivery instruction forms issued to the clients, Participants are advised tofollow the under-mentioned procedures stipulated by SEBI for issuance andverification of delivery instruction forms:[ 128 ]
1. Initial issuance of the delivery instruction forms will be with accountopening in accordance with the procedures already set out. For furtherissuance of delivery instruction forms, the delivery instruction formbook issued to the clients by Participants shall contain a requisitionform for issue of another delivery instruction form book as in the caseof a bank chequebook. Re-issuance of subsequent delivery instructionform books shall be on submission of the requisition slip contained inthe delivery instruction form book.2. As already informed, all delivery instruction forms must bear a preprintedunique identification number. Additionally, the back officesystem of Participants must record these unique numbers and run anautomatic check while executing transactions based on such deliveryinstruction forms.3. Employees of Participants processing the delivery instruction forms shallput their signature on the delivery instruction forms indicating thatthey have verified the signature and the unique delivery instructionform number belonging to the specific client. There shall also be anindication of the value of the transactions contained in a single deliveryinstruction form on the system of Participants and in case the value ofsecurities on the delivery instruction form amounts to Rs. Five lakh ormore, it should be subject to a two step verification, especially for offmarket transactions.Instructions - Revised DI formsCircular No.Sub: Extension of deadline for usage of existing Account Opening Form<strong>NSDL</strong>/POLICY/(AOF) & Delivery Instruction Slip (DIS)2008/0019 Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular Nos.Date: March 26, 2008 <strong>NSDL</strong>/POLICY/2007/0069 / 0070 and 0071 dated November 12, 2007 regardingModification of AOF & DIS under the advise of Financial Intelligence Unit-India (FIU-IND). As all DPs are aware, <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/POLICY/2007/0071 dated November 12, 2007 had informed the DPs to use the existingAOF and DIS till March 31, 2008 or till such time the existing AOFs and DIS areexhausted, whichever is earlier. As an interim measure, DPs were advised toaccept the existing AOF and DIS for opening new accounts and executingtransactions respectively, alongwith the 'Additional Details', in a prescribedformat, on a plain paper, duly signed by the applicant(s)/Clients.In this regard, DPs have represented to <strong>NSDL</strong> with a request to extend theaforesaid deadline of March 31, 2008, citing a few practical difficulties asmentioned below:1) Existing stock of AOF / DIS are yet to be exhausted and hence printingof revised AOF / DIS will be a financial burden on the DPs.2) The process of dispatching of the revised DIS in lieu of the existing DIS(which are lying with the Clients) would put the DPs and the Clients[ 129 ]
into hardship. The process would also increase the overheads (cost,man hours etc) of the DPs.In light of the above representations, all DPs are hereby informed that thedeadline for usage of the existing AOFs / DIS is extended till September 30,2008 or till such time the existing AOF / DIS are exhausted, whichever isearlier. During this interim period, DPs are advised to follow the procedurementioned in the aforesaid Circular No. <strong>NSDL</strong>/POLICY/2007/0071 datedNovember 12, 2007 regarding obtaining of 'Additional Details' alongwith theAOF / DIS.In case the stock of the existing AOF / DIS are exhausted before, September30, 2008, DPs would be required to print and distribute the revised AOF andDIS in the format mentioned in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0069dated November 12, 2007.For further information, DPs are requested to contact Mr. Amit Shinde on TelNo. (022) 2499 4486 (email: shindea@nsdl.co.in) / Mr. Vinith Nair on Tel. No.(022) 2499 4414 (email: vinithn@nsdl.co.in).Circular No :Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/2002/1132<strong>NSDL</strong>/PI/2002/1885 dated July 13, 2002 regarding amendment of Annexure L of the BusinessDate : October 30, Rules of <strong>NSDL</strong> pertaining to Delivery instructions by Clients. Participants were2002 also advised that Annexure L in the old format will also be valid and Participantsshould continue to accept the same from the Clients. However, wheneverParticipants reprint Annexure L, the same should be in the amended format.In this context, many Participants have been requesting <strong>NSDL</strong> to allow themto use the old format of Annexure L as well.In view of the aforesaid, it is hereby informed that Participants can use eitherthe old format or the new format of Annexure L.Circular No :<strong>NSDL</strong>/PI/2002/1132Date: July 13, 2002<strong>NSDL</strong> has been receiving requests from Participants regarding modification ofAnnexure L so as to enable the Clients to give delivery instructions in favourof multiple target Client Ids/CM-BP-Ids. Accordingly, Annexure L of the BusinessRules of <strong>NSDL</strong>, pertaining to Delivery Instructions by Clients has been amended.In this regard, Participants are requested to note that Annexure L in theexisting format is also valid and Participants should continue to accept thesame from the Clients. However, whenever Participants reprint Annexure L(Delivery Instructions by Clients), the same should be in the amended format.c. OthersTransactions in Warehouse Receipts (Commodities) after Final Expiry DateCircular No :Sub: Transactions in Warehouse Receipts (Commodities) after Final Expiry<strong>NSDL</strong>/POLICY/Date2009/0067 All Participants are hereby informed that Multi Commodity Exchange of IndiaDate: July 31, 2009 Ltd (MCX) has intimated that after the final expiry date of a warehouse receipt(i.e. end date of ICIN), warehouse receipts cannot be transferred by clientsfor market delivery or for transfers to another client. The clients can take[ 130 ]
physical delivery of the commodities from the warehouse (rematerialisationrequest).Hence with effect from August 1, 2009, no transactions can be effected afterthe final expiry dates of warehouse receipts (i.e. end date of ICIN) except forthe following:1. Physical Delivery (Rematerialisation) Requests.Transfers from Clearing Member Pool Account to Beneficial Owner Account.Circular No :Sub: Transactions in Warehouse Receipt after Final Expiry Date<strong>NSDL</strong>/POLICY/All Participants are hereby informed that National Commodity Derivatives2009/0058 Exchange of India (NCDEX) has intimated that after the final expiry date of aDate: July 17, 2009 warehouse receipt (i.e. end date of ISIN), warehouse receipts cannot betransferred by clients for market delivery or for transfers to to another client.The clients can take physical delivery of the commodities from the warehouse(rematerialisation request).Hence with effect from August 1, 2009, no transactions can be effected afterthe final expiry dates of warehouse receipts (i.e. end date of ISIN) except forthe following:1. Physical Delivery (Rematerialisation) Requests.2. Transfers from Clearing Member Pool Account to Beneficial OwnerAccount.Securities Lending & Borrowing Scheme (SLBS)Circular No :Sub: Review of Securities Lending and Borrowing (SLB) Framework<strong>NSDL</strong>/POLICY/Attention of Participants is invited to SEBI Circular No. MRD/DoP/SE/Dep/2010/0005 Cir-14/2007 dated December 20, 2007 and MRD/DoP/SE/Dep/Cir-31/2008Date: January 11, 2010 dated October 31, 2008 intimated vide <strong>NSDL</strong> Circular nos. <strong>NSDL</strong>/POLICY/2007/0078 dated December 24, 2007 and <strong>NSDL</strong>/POLICY/2008/0078 dated November5, 2008 respectively, regarding SEBI guidelines on Short Selling and SecuritiesLending and Borrowing (SLB).SEBI has now vide its Circular No. SEBI/MRD/DoP/SE/Dep/Cir- 01/2010 datedJanuary 6, 2010 informed the revised framework for SLB, copy of which isenclosed for the information of Participants.DEPUTY GENERAL MANAGERMarket Regulation Department – Division of PolicyEmail: harinib@sebi.gov.inSEBI/MRD/DoP/SE/Dep/Cir- 01 /2010January 06, 20101. The Executive Directors/Managing Directors of all Stock Exchanges2. Managing Director and CEO, <strong>NSDL</strong>3. Managing Director and CEO, CDSLDear Sir/ Madam,Sub: Review of Securities Lending and Borrowing (SLB) FrameworkThe framework for SLB was specified vide circular no. MRD/DoP/SE/Dep/Cir- 14 /2007 dated December20, 2007 and was operationalised with effect from April 21, 2008. The SLB framework was revised videcircular no. MRD/DoP/SE/Cir-31/2008 dated October 31, 2008. Pursuant to feedback received from marketparticipants and proposals for revision of SLB received from NSE and BSE, the framework is now modifiedas under:[ 131 ]
1. The tenure of contracts in SLB may be upto a maximum period of 12 months. The ApprovedIntermediary (Clearing corporation/ Clearing House) shall have the flexibility to decide the tenure(maximum period of 12 months).2. The lender / borrower shall be provided with a facility for early recall / repayment of shares.3. In case the borrower fails to meet the margin obligations, the Approved Intermediary (AI) shallobtain securities and square off the position of such defaulting borrower, failing which there shallbe a financial close-out.4. In case lender recalls the securities anytime before completion of the contract, the AI on a besteffort basis shall try to borrow the security for the balance period and pass it onward to the lender.The AI will collect the lending fee from the lender who has sought early recall.5. In case of early recall by the lender, the original contract between the lender and the AI will existtill the contract with the new lender for the balance period is executed and the securities returnedto the original lender.6. In case of early repayment of securities by the borrower, the margins shall be released immediatelyon the securities being returned by the borrower to the AI. The AI shall on a best effortbasis, try to onward lend the securities and the income arising out of the same shall bepassed on to the borrower making the early repayment of securities.7. In case AI is unable to find a new borrower for the balance period, the original borrower will haveto forego lending fee for the balance period.8. Incase of early recall by lender or early repayment of securities by borrower, the lending fee for thebalance period shall be at a market determined rate.9. The other provisions, as specified in SEBI circular no. MRD/DoP/SE/Dep/Cir-14/2007 datedDecember 20, 2007 and circular no. MRD/DoP/SE/Cir- 31/2008 dated October 31, 2008 shall continueto be applicable.10. Exchanges and Depositories are advised toa. take necessary steps and put in place necessary systems for implementation of the above at theearliest;b. make necessary amendments to the relevant bye-laws, rules and regulations for the implementationof the above;c. issue necessary instructions to the member brokers/clearing members and depository participantsand also to disseminate the same on the website.11. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities andExchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996, to protect theinterests of investors in securities and to promote the development of, and to regulate thesecurities market.Yours faithfully,HARINI BALAJICircular No :Sub: Revised Securities Lending and Borrowing (SLB) Framework.<strong>NSDL</strong>/POLICY/Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/2008/0078 0078 dated December 24, 2007 enclosing therewith SEBI circular no. MRD/Date: November 5, 2008 DoP/SE/Dep/Cir-14/2007 dated December 20, 2007 regarding SEBI guidelineson Short Selling and Securities Lending and Borrowing.SEBI has now vide its circular no. MRD/DoP/SE/Cir- 31/2008 dated October31, 2008 informed the revised framework for SLB. Copy of the said circulardated October 31, 2008 is enclosed for the information of Participants.[ 132 ]
AnnexureCHIEF GENERAL MANAGERMarket Regulation Department – Division of PolicyTel: 26449370 Fax: 2644 9031Email: mdrao@sebi.gov.inMRD/DoP/SE/Cir- 31 /2008October 31, 20081. The Managing Director / CEO,National Stock Exchange and Bombay Stock Exchange2. Managing Director, <strong>NSDL</strong> and CDSLDear Sir,Sub: Review of Securities Lending and Borrowing (SLB) FrameworkThe framework for SLB was specified vide circular no. MRD/DoP/SE/Dep/Cir- 14 /2007 dated December20, 2007. SLB was operationalised with effect from April 21, 2008. Pursuant to feedback from marketparticipants and proposals for revision of SLB received from NSE and BSE, the framework is beingrevised as under:1. TenureTenure for SLB may be increased to 30 days from the present 7 days.2. Corporate Actions during the 30 day SLB contractThe SLB tenure of 30 days will result in the need for appropriate adjustments for corporateactions. The corporate actions may be treated as follows:a. Dividend: The dividend amount would be worked out and recovered form the borrower atthe time of reverse leg and passed on to the lender.b. Stock split: The positions of the borrower would be proportionately adjusted so that thelender receives the revised quantity of shares.c. Other corporate actions such as bonus/ merger/ amalgamation / open offer etc: Thetransactions would be foreclosed from the day prior to the ex-date. The lending fee wouldbe recovered on a pro-rata basis from the lender and returned to the borrower.3. Time window for SLBThe time for SLB session may be extended from the present one hour (10 am to 11 am) to thenormal trade timings of 9:55 am to 3:30 pm.4. Risk Managementa. With regard to risk management in SLB, it is advised that common risk management practicesshall be followed by stock exchanges for SLB. It is reiterated that the exchanges shouldensure that the risk management framework strikes a balance between ensuring commercialviability of SLB transactions and ensuring adequate and proper risk management. Exchangesshould satisfy themselves regarding the adequacy of the risk management system.b. Margins in SLB may be taken in the form of cash and cash equivalents as prescribed in thecircular MRD/DoP/Cir-07/2005 dated February 23, 2005.5. Exchanges and Depositories are advised toa. take necessary steps and put in place necessary systems for implementation of the above atthe earliest;b. make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above;c. issue necessary instructions to the member brokers/clearing members and depositoryparticipants and also to disseminate the same on the website.6. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities andExchange Board of India Act, 1992, to protect the interests of investors in securities and to promotethe development of, and to regulate the securities market.Yours faithfully,S V MURLI DHAR RAO[ 133 ]
Circular No :Sub : Operationalisation and settlement timings for Securities Lending &<strong>NSDL</strong>/POLICY/Borrowing Scheme (SLBS)2008/0025 As all Depository Participants (DPs) are aware, SEBI vide its circular no. MRD/Date : April 16, 2008 DoP/SE/Cir-05/2008 dated March 19, 2008 (copy enclosed) informed the stockexchanges and the depositories about the operationalisation of Short Sellingand SLBS with effect from April 21, 2008. Further, <strong>NSDL</strong> vide its Circular No.<strong>NSDL</strong>/PI/2008/0162 dated January 29, 2008 informed DPs regardingincorporation of Market Type Codes in the CC Calendar at the request ofNational Securities Clearing Corporation Ltd (NSCCL) and BOI ShareholdingLimited (BOISL). The pay-in timings with respect to SLBS settlements asinformed by NSCCL and BOISL, effective from April 21, 2008 and <strong>NSDL</strong> deadlinetimings thereof are given hereunderCC Id Market Description <strong>NSDL</strong> NSE/BSE NSE/BSEType Code deadline Pay-in Pay-outtime time timeIN001019 18 SLB 9.00 am 9.30 am 11.30 amIN001019 19 SLB-RIN001019 20 BUY IN AUCTIONIN001002 23 SLB FIRST LEGIN001002 24 SLB RETURN LEGIN001002 25 SLB AUCTION BUY-INFor further information / clarification, DPs are requested to contact Mr.Narayan Venkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in) / Mr.Rakesh Mehta Tel (022) 2499 4480 (email : rakeshm@nsdl.co.in).AnnexureChief General ManagerMarket Regulation Department-Division of PolicyE-mail: mdrao@sebi.gov.inMRD/DoP/SE/Cir- 05 /2008March 19, 20081. The Executive Directors/Managing Directors/Administrators of all Stock Exchanges2. Managing Director & CEO, <strong>NSDL</strong>3. Managing Director & CEO, CDSLDear Sir / Madam,Sub:- Operationalisation of Short Selling and Securities Lending and Borrowing1. SEBI vide circular dated December 20, 2007 had specified the broad framework for short selling byinstitutional investors and a full-fledged securities lending and borrowing scheme for all marketparticipants.2. It has been decided to operationalise the above with effect from Monday, April 21, 2008.3. The Stock Exchanges and the Depositories are advised to :[ 134 ]
3.1 make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision.3.2 bring the provisions of this circular to the notice of the member brokers/clearing members,depository participants and also disseminate the same on their website.3.3 communicate to SEBI, the status of the implementation of the provisions of this circular inthe Monthly Development Report.4. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securitiesand Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996, to protect theinterests of investors in securities and to promote the development of, and to regulate the securitiesmarket.Yours faithfully,S V Murali Dhar RaoCircular No :Sub. :- Securities Lending and Borrowing Scheme (SLBS)<strong>NSDL</strong>/POLICY/Attention of DPs is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0078 dated2008/0005 December 24, 2007 enclosing therewith SEBI circular no. MRD/DoP/SE/Dep/Date: January 29, 2008 Cir-14/2007 dated December 20, 2007 regarding SEBI guidelines on Short sellingand Securities Lending and Borrowing.In pursuance to the same, please find enclosed circular no. NSCCL/SEC/2008/053 dated January 28, 2008 issued by National Securities Clearing CorporationLtd (NSCCL) and notice no. 20080128-3 dated January 28, 2008 issued by BOIShareholding Limited (BOISL) for information and necessary action.AnnexureNotice no : 20080128-3Notice date : Monday, January 28, 2008Subject : BOISL Notice regarding Securities Lending and Borrowing Scheme(SLBS)Segment Name GeneralContents :BOI SHAREHOLDING <strong>LIMITED</strong>Sub. : Securities Lending and Borrowing Scheme (SLBS)The members of Bombay Stock Exchange Ltd. (BSE) were informed vide NoticeNo.20071224-10 dated December 24, 2007 about the introduction of SecuritiesLending and Borrowing Scheme (SLBS) as specified by SEBI vide its CircularNo.MRD/DoP/SE/Dep/Cir-14/2007 dated December 20, 2007.In this connection, members of BSE are hereby informed that, the ClearingHouse of BSE i.e. BOI Shareholding Ltd. (BOISL), as the Approved Intermediaryunder the Securities Lending Scheme, 1997 announces the Securities Lendingand Borrowing Scheme (SLBS) as per the broad framework specified by SEBIvide its aforesaid Circular No. MRD/DoP/SE/Dep/Cir-14/2007 dated December20, 2007 and any other circular / guidelines that may be issued in respect ofthe same from time to time.[ 135 ]
The salient features of the SLBS are as under :Eligibility All trading / clearing members of BSE as well as Banks and Custodiansshall be eligible to participate in SLBS, subject to fulfillment of theeligibility criteria specified by BOISL. For this purpose they shall, interalia, have to register as SLB Member in SLBS with BOISL as per theregistration procedure specified by BOISL. SLB Member desirous of lending or borrowing securities under SLBS cando so either on their own account or on behalf of their clients. SLB Member shall be required to enter into an agreement with BOISL andthe clients shall be required to enter into back to back agreement withthe SLB Member as per the formats specified by BOISL. The formats ofthe same shall be available shortly on the website of BSE. The SLB Member shall apply to BOISL for allotment of Unique Client IDfor each client who desires to participate in SLBS.Eligible Securities To begin with, the dematerialised securities traded in F & O Segmentshall be eligible for lending and borrowing under SLBS. BOISL shall fromtime to time announce the addition / removal of the securities to /from the list of eligible securities. In case of Record Date or Closure of Register of Members of a Company,the securities will not be allowed for lending and borrowing under theSLBS during the period as may be decided by BOISL from time to time.Lending and Borrowing transaction on screen based platform BOISL shall provide a separate screen based order matching platform toexecute lending and borrowing transactions. A detailed circular inrespect of such platform will be issued in due course.Clearing & Settlement Procedure The settlement obligations for transactions under SLBS will be on grossbasis i.e. there shall be no netting of transactions. Following market types are to be used for giving instructions to theDepositories for securities pay-in :SLBS Pay-inFor first leg pay-in of Securities (by lender)For return leg pay-in (return of borrowed securitiesby the borrower)For pay-in of securities in SLB AuctionMarket TypeSLBSLB-RBuy-in AuctionThe pay-in and pay-out of funds and securities shall be through thedesignated clearing bank account and securities settlement accountrespectively.The Clearing Bank accounts currently used by members of BSE in CashSegment (Equity Market) shall be the designated bank account for[ 136 ]
T Daysettlement of funds obligations under the SLBS.For securities demat account the SLB Member may approach the depositoryparticipants in respect of Pool / Principal accounts for settlement ofsecurities obligations under SLBS.The transactions under SLBS shall be settled on a T+1 day basis as pertime lines specified by BOISL. The lender shall be required to deliverthe securities by the scheduled time on T+1 day. Failure to deliversecurities shall result in financial close-out. The close-out computationformula shall be intimated by way of a circular.For a borrow transaction the settlement obligation shall be the lendingfees plus the lending price. The lending price shall be previous day’sclosing price in Cash Segment of BSE.To start with, tenure of lending shall be seven trading days. Accordingly,the return of securities by the borrower shall be scheduled on T+8 day(where T is the SLBS transaction day).All SLB members shall be required to return the securities borrowed oncompletion of period of lending. The securities shall be returned to thelender of the securities by BOISL. In the case of borrower failing toreturn securities, BOISL shall conduct an auction for obtaining securities.In the event of exceptional circumstances resulting in non-availabilityof securities in auction, such transactions would be financially closedoutat appropriate rates. The close-out computation formula shall beintimated by way of a circular.BOISL shall specify the settlement calendar with respect to SLBS fromtime to time. A typical settlement cycle for a lending and borrowingtransaction shall be as under :ActivitiesSecurities Lending & Borrowing sessionCustodial confirmationFinal obligation to participant[ 137 ]Timings10:00 am – 11:00 amby 2:00 pm3:30 pmT+1 day Pay-in of securities/funds – 1st leg 9:30 amPay- out of securities/funds – 1st legT+8 dayPay-in of securities of return legPay-out of securities/funds of return legBuy-in auction for failure of borrower to returnsecuritiesAuction obligation to participantT+9 dayPay-in of securities for auction settlementPay-out of securities/funds for auction settlement11:30 am9:30 am11:30 am12:30 pm (approx.)4:30 pm9:30 am11:30 am
Margins and Collaterals All transactions in the SLBS shall be subject to levy of margins. Themargins shall be levied at a client level. The details in respect of marginand collateral deposit are mentioned in Annexure-I.Position limits As prescribed by SEBI, the position limits with respect to SLBS shall beapplicable at various levels. To begin with, the position limits at the level of Market, SLB Memberand Client shall be as follows:a) the market wide position limit for transactions under SLBS shallbe 10% of the free float capital of the company in terms of numberof shares.b) No SLB Member shall have open position of more than 10% of themarket wide position limit or Rs.50 crore (base value) whicheveris lower.c) For a FII / MF the position limits shall be the same as that of a SLBMember.d) The client level position limit shall not be more than 1% of themarket wide position limit.Shortages & Close-outIn the event of fund shortages by the borrowers the SLBS transactionsshall be cancelled as may be decided by BOISL and accordingly, thesecurities shall be returned to the lenders alongwith lending fees. Inthe event, lender fails to deliver securities in the settlement thetransactions shall be closed-out. The computation methodology andrate of close-out shall be intimated by BOISL from time to time.In the event the borrower fails to return the securities BOISL shallconduct a “Buy-in Auction”. The buy-in auction shall be carried out inthe Cash Segment of BSE.If the securities cannot be bought through the buy-in auction, then thetransactions shall be closed-out. The computation methodology andrate of close-out shall be intimated by BOISL from time to time. In all cases of shortages BOISL may initiate various actions includingwithdrawal of borrowing and lending facility of the participant, withholdthe securities / funds pay-out due to the participant or any other actionas may be decided by BOISL from time to time.Fines and penalties Fines and penalties shall be imposed on the SLB Members for defaults indelivery / return of securities or defaults in payment of funds or marginobligations or for violation of Unique Client Code requirements or forany other reasons as may be specified by BOISL from time to time.Arbitration All claims, differences or disputes between the SLB Members and their[ 138 ]
clients arising out of transactions in SLBS shall be subjected to arbitrationmechanism as intimated by BOISL from time to timeThe detailed modalities with respect to implementation of SLBS and theeffective date of implementation shall be communicated separately.n case of any clarifications members may contact :NameContact Nos.Mr.Peter D’Souza – BOISL 5042Mr.Daniel Lasrado – BOISL 5032Ms.Avani Kulkarni – BOISL 5065Ms.Sheela Anjaria – BSE, Clearing and Settlement 8149Mr.Sanjay Narvankar – BSE, Clearing and Settlement 8113Mr.Surendra Rashinkar – BSE, Clearing and Settlement 8306Mr.Hitesh Desai / Mr.Yogesh Bambardekar – BSE,Dept.of Surveillance & Supervison 8286Mr.Amit Kadam – BSE, Membership 8010Monday,January 28, 2008A. C. Gautam,Managing Director - BOISLAnnexure - ICollateral Deposits and Margins for transactions under SLBS:The criteria in respect of composition of capital, computation and collectionof margins would be as follows:A. Composition of Capital (Liquid Assets): SLB Members may note that the capital deposited as collateral towardsBase Minimum Capital and Additional Capital for Securities Lending andBorrowing are to be maintained in form of Cash and Cash equivalentonly. Base Minimum Capital (BMC) :o Base Minimum Capital of Rs.10 lakhs to be separatelymaintained by SLB Members for SLBs. Additional Capital (Liquid Assets) :o In addition to the Base Minimum Capital the SLB Membersmay deposit additional capital in form of cash or cashequivalent only (i.e., Fixed Deposit Receipts of Banks andBank Guarantee).B. Margins : Margins shall be computed and collected as per the present systemfollowed in the Cash segment (Equity Market). All participants in theSecurities Lending and Borrowing shall be margined. BOISL wouldcompute, collect and release various margins as follows :[ 139 ]
VaR Margin and ELM Margin:• VaR margin and ELM margin rates as applicable to the securityin the cash segment of BSE at beginning of day rates shall beapplicable in the SLBS.• The VaR margin and ELM margin shall be collected on anupfront basis by adjusting against the collateral of the SLBMembers at the time of transaction.• The VaR margin and ELM margin shall be collected on thegross open position of the SLB Member. The gross open positionfor this purpose would mean the gross of all positions acrossall the clients of a SLB Members including its proprietaryposition• VaR margin rates for SLBS shall be available on the websiteof BSE.• The VaR Margin and ELM margin so collected shall be releasedon completion of pay-in of the respective settlement.Mark to Market Margin:• Mark to market margin shall be calculated by marking eachtransaction in security to the closing price of the security atthe end of day in the cash segment of BSE. In case the securityhas not been traded on a particular day in the equity market,the latest available closing price at the BSE shall be consideredas the closing price.• The mark to market margin (MTM) shall be collected fromthe SLB Member at the end of day on T day.• Such MTM will be collected from the SLB Members in theevening on the T day, first by adjusting the same from theavailable cash and cash equivalent component of the liquidassets and the balance MTM in form of cash from the SLBMembers through their clearing banks on the same day.• The MTM margin shall be collected on the gross open positionof the SLB Members. The gross open position for this purposewould mean the gross of all positions across all the clients ofthe SLB Member including its proprietary position. For thispurpose, the position of a client would be netted across itsvarious securities and the positions of all the clients of a SLBMember would be grossed.• There would be no netting off of the positions and setoffagainst MTM profits across two settlements. However, forcomputation of MTM profits/losses for the day, netting orsetoff against MTM profits would be permitted.Fixed percentage on lend / borrow transactions• In addition to the aforesaid margins, the collateral depositsof the SLB Members will also be blocked upfront towards thefollowing:o In case of both the borrower and lender, a fixedpercentage of lending price shall be levied as margins.[ 140 ]
Such margins will be collected on an upfront basis byadjusting against the collateral of the SLB Member. Tobegin, with the fixed percent shall be 25%. Lending fee amounto In case of the borrower, lending fees amount based on theactual transacted value shall be blocked upfront against thecollateral. Custodial transactionso In respect of transactions entered by a SLB Member which isto be settled by a custodian, the margins from the time oftransactions till confirmation by the custodian shall be leviedon the SLB Member. On confirmation of the said transactionsby the custodian, the custodian shall be levied the marginsapplicable on such transactions.o In case of rejection by the custodian, the margins on thetransaction rejected shall continue to be levied on the SLBMember. Release of margins :• SLB Members may note that:o All margins shall be applicable at client level.o Both lender and borrower shall be levied margins inrespect of first leg of transaction in the SLBS.o The borrower shall also be levied margins in respect ofreturn leg of transactions in SLBS.o Margins as collected above shall be released aftercompletion of pay-in of respective settlements. Exemption from margins :o Exemption from margins shall be available in case where earlypay-in of securities is made by the lender of securities.Annexure<strong>NATIONAL</strong> <strong>SECURITIES</strong> CLEARING CORPORATION LTD.Download Ref. No: NSE/CMPT/10146Ref. No: NSCCL/SEC/2008/ 053 Date: January 28, 2008ToAll Members & Custodians,<strong>SECURITIES</strong> LENDING & BORROWING SCHEME (SLBS)In pursuance of SEBI Circular No. MRD/DoP/SE/Dep/Cir-14 /2007 datedDecember 20, 2007 and in continuation of NSCCL Circular No.NSCCL/SEC/2007/0646 dated December 24, 2007, NSCCL as an Approved Intermediary(AI) announces the Securities Lending & Borrowing Scheme (SLBS) within theoverall framework of "Securities Lending Scheme, 1997".The salient features of the scheme are as under:1. Participant EligibilityAll clearing members of NSCCL including Banks and Custodians,[ 141 ]
hereinafter referred to as 'Participant', shall be eligible to participatein SLBS. In order to become eligible to participate in SLBS, clearingmembers shall have to register as Participants in SLBS.For this purpose, the eligible persons shall be required to follow theregistration procedure as specified by NSCCL which shall include enteringinto an agreement with NSCCL as per the format specified.Participants desirous of lending or borrowing securities can do so eitheron their own account or on behalf of their clients. Prior to undertakinglending or borrowing of securities on account of clients, the Participantshall enter into an agreement with each client as per the format specifiedby NSCCL.The Participant shall apply to NSCCL for allotment of a Unique client IDfor each client who desires to participate in SLBS.2. Eligible SecuritiesSecurities lending and borrowing shall be permitted in dematerializedform only. NSCCL shall announce the list of securities eligible underSLBS from time to time. To start with, securities available for trading inF&O segment of National Stock Exchange of India Ltd. (NSEIL) shall bepermitted.In case of Record Date or Closure of Register of Members of a Companyin any of the eligible security, the security shall not be available forlending and borrowing during the period as may be intimated by NSCCLfrom time to time3. Process of securities lending and borrowingOrder Matching Platform:NSCCL shall provide an automated, screen based, order matchingplatform to the Participant to execute lending and borrowingtransactions. The Participant shall be allowed to put Borrowal / lendingorders. The orders shall be matched on a price - time priority. Detailsof the order matching platform being provided for SLBS transactionsare enclosed as Annexure 1.The orders placed by the Participant shall be for the lending fee.Clearing:NSCCL shall compute obligations based on the transactions executed onthe order matching platform. All obligations shall be on a gross basis i.ethere shall be no netting of transactions.Transactions under SLBS segment shall be identified based on differentsettlement types as intimated by NSCCL for the first leg and reverse legsettlements.Settlement Procedure:The pay-in and pay-out of funds and securities shall be through thedesignated bank accounts and securities settlement accountrespectively.The transactions shall be settled on a T+1 day basis as per time linesspecified by NSCCL. The lender shall be required to deliver the securitiesby the scheduled time on T+1 day. Failure to deliver securities shall[ 142 ]
esult in financial close-out. The close-out computation formula shallbe intimated by way of circular.For a borrow transaction, the obligation shall be the lending fees plusthe lending price. The lending price shall be the previous day's closingprice in the Capital Market segment of NSEIL.Designated Bank AccountThe bank account currently used by Participant for settlement of fundsin the Capital Market segment shall be the designated bank account forgiving effect to funds debits/credits under SLBS.Securities Settlement AccountParticipants shall be required to maintain accounts with both depositoriesi.e <strong>NSDL</strong> & CDSL. The pool account currently used by Participants in<strong>NSDL</strong> for effecting securities pay-in and pay-out in the Capital Marketsegment shall be used for settlement under SLBS.In case of CDSL, Participants shall require to open a separate settlementaccount for effecting securities pay-in and pay-out under SLBS.4. Period of lendingTo start with, tenure of lending / borrowing shall be seven tradingdays. Accordingly the return of securities by borrower shall be scheduledon the T+8 day (where T is the SLBS transaction day).5. Process of return of securitiesAll Participants shall be required to return the securities borrowed oncompletion of period of lending. The securities shall be returned to thelender of the securities by NSCCL. In the case of borrower failing toreturn securities, NSCCL shall conduct an auction for obtaining securities.In the event of exceptional circumstances resulting in non-availabilityof securities in auction, such transactions would be financially closedoutat appropriate rates. The close-out computation formula shall beintimated by way of a circular.6. Lending and Borrowing CalendarNSCCL shall specify the settlement calendar with respect to SLBS fromtime to time. A typical settlement cycle for a lending and borrowingtransaction shall be as under:T DayActivitiesSLBS transaction sessionCustodial confirmationFinal obligation to ParticipantT+1 dayPay-in of securities/funds first leg (Settl Type L)Pay- out of securities/funds first legT+8 dayPay-in of securities of reverse leg (Settl Type P)Timings10:00 am - 11:00 am2:00 pm3:30 pm9:30 am11:30 am9:30 am[ 143 ]
Pay-out of securities/funds of reverse legBuy-in auction for failure of borrower to returnsecurities Around 12:00 noonAuction obligation to ParticipantT+9 dayPay-in of securities for auction settlement(Settl Type Q)Pay-out of securities/funds for auction settlement11:30 am4:30 pm9:30 am11:30 am7. Margins and CollateralAll transactions under SLBS shall be subject to levy of margins. Themargins shall be levied at a client level and collected on an upfrontbasis from the Participant. The margins to be levied on SLBS transactionshall be intimated by NSCCL from time to time. The details in respectof margin and collateral deposit are enclosed as Annexure 2.8. Position LimitsNSCCL shall prescribe position limits at various levels for transactionsin SLBS in consultation with SEBI and the same shall be intimated fromtime to time. To begin with the limits shall be as under:(a) the market-wide position limits for SLB transactions shall be 10% ofthe free-float capital of the company in terms of number of shares (b)No Participant shall have open position of more than 10% of the marketwideposition limits or Rs. 50 crore (base value), whichever is lower (c)For a FII/MF, the position limits shall be the same as of the Participant(d) The client level position limits shall be not more than 1% of themarket-wide position limits.9. Shortages and Close outIn the event of funds shortage by the borrower, the SLBS transactionsshall be cancelled, as may be decided by NSCCL and accordingly,securities shall be returned to the lenders alongwith lending fees.In the event the lender fails to deliver securities, the transaction shallbe closed out. The methodology and rate of close out shall be intimatedby NSCCL from time to time.In the event the borrower fails to return the securities NSCCL shallconduct a buy-in auction. The buy-in auction shall be carried out in theCapital Market segment of NSEIL.If the security cannot be bought through the buy-in auction, thetransaction shall be closed out. The methodology and rate of close outshall be intimated by NSCCL from time to time.In all cases of shortages, NSCCL may initiate various actions includingwithdrawal of access to the order matching platform , withhold of thesecurities/funds pay-out due to the Participant or any other action asmay be intimated by NSCCL from time to time.[ 144 ]
10. Fines and PenaltiesNSCCL shall impose fines and penalties on the Participants for defaultsin delivery / return of securities, or payment of fund obligations orpayment of margin or violation of unique client code or any other reasonas may be specified by NSCCL from time to time.11. ArbitrationAll claims, differences or disputes between the Participants and theirclients arising out of transactions in SLBS shall be subjected to arbitrationmechanism as intimated by NSCCL from time to time.The detailed modalities with respect to implementation of SLBS and theeffective date of implementation shall be communicated separately.In case of any clarifications, members are requested to contact Mr. SamirRajdev, Ms. Meghana Mukadam, Mr. Shailesh Golatkar on telephone numbers26598268/ 26598215/ 26598383.For National Securities Clearing Corporation Ltd.Rana UsmanManagerANNEXURE 1The order matching platform features & user navigation for SLBS are describedbelow. For further details Participants are requested to refer to the on-linehelp facility.Parameters for Securities Lending & BorrowingMarket time 10.00 AM - 11.00 AM SLBS SegmentMarket Type N Normal MarketBook Type RL Regular LotSeries FL SLBS SegmentSeries RL Auction Market for Reverse Legin Cash MarketPrice band No price band Operating range - 40%Permitted lot size 1Tick Size Rs 0.01Setting up Securities in Market Watch: For setting up securities in theMarket Watch screen, the user has to press the function key [F4], enter therequired details in Symbol, Series and Market Type fields and press [Enter].The default option displayed in the market type field is 'N'.Order Entry - Borrow/ Lend orders can be entered in SLBS using the functionkeys [F1] and [F2] and selecting 'RL' in the Book Type field. With respect to[ 145 ]
orders in the SLBS, Participants may note the following:• Quantity - Order quantity should be in multiples of Market Lot.• Price - In price field member has to enter fees for securities lending &borrowing. They can enter either market orders or limit price orders.Order price for limit price orders should be in multiples of tick size.• PRO/CLI - Both 'Proprietary (Pro)' and 'Client (Cli)' orders are allowed.• Time Conditions -User can specify time conditions as 'Day' or 'IOC'.• Participant Code - A valid Custodial Participant Code has to be enteredin this field.Order Cancellation/Modification - Order cancellation and modification isallowed for orders entered in the SLBS. Both Single and Quick OrderCancellation functions are available. In order to effect Quick Cancellation oforders for a security in SLBS, a member has to press [Shift+F3] to invokeQuick Order Cancellation screen and select 'RL' in the Book Type field. QuickCancellation can also be done for all securities in the SLBS by selecting theBook Type as 'RL' and other parameters as relevant.MBP - User can query order information for the SLBS in MBP by selecting'REGULAR LOT' as book type in the selection screen. Orders are stackedaccording to price in MBP. The high, low, last transacted price, percentagechange and average transaction price figures are calculated with respect totransactions in SLBS.Market Inquiry - Security statistics for SLBS can be viewed by selecting'NORMAL' as market type.Outstanding Orders/Activity log/ Previous Transactions - Outstanding order/Activity log/ Previous Transaction information in a particular security can beviewed for SLBS by selecting the book type 'REGULAR LOT' in the respectiveselection screens.Order and Transaction Confirmation Slips - The order confirmation slip fororders entered in SLBS displays 'RL' as Book Type field. Similarly, transactionconfirmation slip generated for SLBS transactions show 'N' in the Market Typefield.Net Position - The Net Position screen displays consolidated statistics for allmarkets as well as separately for each market.Most Active Securities - This screen display consolidated statistics i.e.transacted value, transacted quantity, no of transactions for a security acrossthe markets.On-line Backup - In the On-line Backup function a facility is provided toselect order/transactions based on Market Type. Alternately, members cantake a backup for all markets by selecting 'All' in the Market Type field.Full Message Display - In Full Message Display, messages can be filtered onSymbol and Series.Offline Order Entry - This function is available for SLBS. The structure forthe input file is given in the online help.Branch/User Order Value Limit - Branch/User Order Limit is applicable for aparticular Branch/User for orders across all Markets.Securities Order Quantity Limit - Securities Order Quantity Limit is applicablefor a particular security across all Markets.Order Limits - Order limits set by a user are applicable for a single orderacross all Markets.[ 146 ]
Reports - Transactions report generated for Participants i.e. TransactionsDone, Order Log and Open Orders report, displays records in ascending orderof security name. Within a security records are displayed by Market Type.Bhav Copy - Security statistics pertaining to SLBS transactions are shown inthe Market Statistics report.ANNEXURE 2MARGINS AND COLLATERALS1. Collateral DepositsParticipants may deposit collaterals in the form of cash equivalentsi.e., cash, bank guarantees and fixed deposit receipts, and any otherform of collateral as may be prescribed by the Approved Intermediary(NSCCL) from time to time. The collateral deposited by the participantshall be utilized towards margin requirement of the participant.In case of failure of the participant to meet its obligation, the collateralsprovided by the participants may be liquidated by NSCCL to meet theobligation of the participant1.1 Minimum CollateralEvery participant is required to continuously maintain minimumcollateral of Rs.10 lacs in the form of cash as prescribed by theNSCCL. This deposit should be provided by the participant at thetime of registration in Securities Lending and Borrowing Scheme(SLBS).2. MarginsAll transactions under SLBS shall be subject to margins. Following marginsshall be applicable for transactions under SLBS.2.1 First Leg transactionsBoth lender and borrower shall be levied margins in respect offirst leg of transactions under SLBS.2.1.1 Borrow transactionThe following margins shall be levied on the Participantsfor a borrow transactions:1. Value at Risk Margins2. Extreme Loss Margins3. Mark to Market Margins4. Fixed percentage of lending price as may bespecified by NSCCL5. Fixed percentage of lending fee as may bespecified by NSCCL2.1.2 Lend transactionThe following margins shall be levied on the Participantsfor lend transactions:1. Value at Risk Margins2. Extreme Loss Margins3. Mark to Market Margins4. Fixed percentage of lending price as may be specifiedby NSCCL[ 147 ]
2.2 Reverse Leg transactionsOnly the borrower shall be levied margins in respect of reverseleg of transactions under SLBS. The following margins shall belevied on the Participants for a borrow transactions:1. Value at Risk Margins2. Extreme Loss Margins3. Mark to Market Margins4. Fixed percentage of lending price as may be specified byNSCCL2.3 Value at Risk Margin (VaR Margin)• VaR margin rate as applicable to the security in the capitalmarket segment shall be applicable in the SLBS.• The VaR margin shall be collected on an upfront basis byadjusting against the collateral of the Participant at thetime of transaction.• The VaR margin shall be collected on the gross openposition of the Participant. The gross open position forthis purpose would mean the gross of all positions acrossall the clients of a Participant including its proprietaryposition• VaR margin rate for each security shall be disseminated tothe Participants through the Extranet and on the websiteof the Exchange.• The VaR margin so collected shall be released oncompletion of pay-in of the respective settlement.2.4 Extreme Loss Margin• Extreme Loss margin rate as applicable to the security inthe capital market segment shall be applicable in the SLBS• The Extreme Loss margin shall be collected on an upfrontbasis by adjusting against the collateral of the Participantat the time of transaction.• The Extreme Loss margin shall be collected on the grossopen position of the Participant. The gross open positionfor this purpose would mean the gross of all positions acrossall the clients of a Participant including its proprietaryposition• The Extreme Loss margin so collected shall be released oncompletion of pay-in of the respective settlement.2.5 Mark to Market Margin• Mark to market loss shall be calculated by marking eachtransaction in security to the closing price of the securityat the end of day in the capital market segment. In casethe security has not been transacted on a particular dayin the capital market segment, the latest available closingprice at the NSE shall be considered as the closing price.• The mark to market margin (MTM) shall be collected fromthe Participant before the start of the SLBS session of thenext day.[ 148 ]
• The MTM margin shall also be collected/adjusted from/against the collateral deposited by the Participant• The MTM margin shall be collected on the gross openposition of the Participant. The gross open position forthis purpose would mean the gross of all positions acrossall the clients of a Participant including its proprietaryposition. For this purpose, the position of a client wouldbe netted across its various securities and the positions ofall the clients of a Participant would be grossed.• There would be no netting off of the positions and setoffagainst MTM profits across two settlements However, forcomputation of MTM profits/losses for the day, netting orsetoff against MTM profits would be permitted.• The MTM margin so collected shall be released oncompletion of pay-in of the settlement.2.6 Fixed Percentage of lending price• A fixed percentage of lending price shall be levied as marginon the Participants for both borrow and lend transactionsas may be intimated by NSCCL from time to time. To startwith the fixed percentage shall be '25%'• This shall be collected on an upfront basis by adjustingagainst the collateral of the Participant at the time oftransaction.• This shall be collected on the gross open position of theParticipant. The gross open position for this purpose wouldmean the gross of all positions across all the clients of aParticipant including its proprietary position• The margin so collected shall be released on completionof pay-in of the respective settlement.• The lending price shall be the previous day closing priceof the security in the capital market segment2.7 Fixed Percentage of lending fee• A fixed percentage of lending fee shall be levied as marginon the Participants for borrow transactions as may beintimated by NSCCL from time to time. To start with thefixed percentage shall be '100%'• This shall be collected on an upfront basis by adjustingagainst the collateral of the Participant at the time oftransaction.• The margin so collected shall be released on completionof pay-in of the respective settlement.• The lending fee shall be the actual price of the transaction2.8 Exemption from marginsIn cases where early pay-in of securities is made prior to thesecurities pay-in, such positions for which early pay-in (EPI) ofsecurities is made shall be exempt from margins. The EPI wouldbe allocated to clients having net deliverable position, on a randombasis.[ 149 ]
2.9 Custodial transactionsIn respect of transactions entered by a Participant which is to besettled by a custodian, the margins from the time of transactionstill confirmation by the custodian shall be levied on the Participant.On confirmation of the said transactions by the custodian, thecustodian shall be levied the margins applicable on suchtransactions.In case of rejection by the custodian, the margins on thetransaction rejected shall continue to be levied on the Participant.2.10 Short fall of marginsIn case of any shortfall in margin the Participant shall not bepermitted to transact in SLBS with immediate effect. The sameshall be considered as violation and shall attract penal charges asmay be specified by NSCCL from time to time2.11 Margins from the Client:Participants should have a prudent system of risk management toprotect themselves from client default. Margins are likely to bean important element of such a system. The same shall be welldocumented and be made accessible to the clients and NSCCL.However, the quantum of these margins and the form and modeof collection are left to the discretion of the Participants.Delivery of Instructions through Speed-eCircular No :Sub: Amendment to Business Rules<strong>NSDL</strong>/POLICY/All Participants are hereby informed that Annexure ‘LA’ (old format) and2010/0060 Annexure ‘LA’ (new format) of Business Rules pertaining to ‘Combined –Date: June 3, 2010 Delivery Instructions by Clients’ have been amended and renamed as AnnexureLA – I and Annexure LA – II respectively. The amended Annexures LA-I and LA-II are enclosed with highlighting the changes and without highlighting thechanges.Participants may continue to use their existing stock of ‘Combined-DeliveryInstructions by Clients’ till such time it is exhausted and would be required toprint and issue the revised Combined Delivery Instruction slips i.e. AnnexureLA – I and Annexure LA – II thereafter.Circular No :Sub: SPICE enhancement – Ascertain status of uploaded instructions and<strong>NSDL</strong>/POLICY/Clients registered for SPICE2010/0059 As Participants are aware that Clearing Members can avail the feature ofDate: May 28, 2010 SPICE (Submission of Power of attorney based Instructions for ClientsElectronically) for submitting instructions (auto pay-in) through SPEED-efacility (refer Circular No. <strong>NSDL</strong>/POLICY/2009/0126 dated December 31,2009). SPICE has been further enhanced with two features viz., (i) ‘Auto PayinInstructions Status Download’ to ascertain the status of the instructions(auto pay-in) uploaded through SPEED-e facility and (ii) ‘POA Client ListDownload’ to ascertain the Clients registered for SPICE. The features areexplained in detail which is enclosed at Annexure I.The aforesaid features will be released on SPEED-e facility on Saturday, May29, 2010.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.[ 150 ]
Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Annexure I(i) ‘Auto Pay-in Instructions Status Download’:Clearing Members (CMs) can download status of instructions with respectto digitally signed instructions submitted through SPEED-e facility todebit the demat accounts of Clients and credit their pool accounts.This new feature will facilitate CMs to ascertain the status of theinstructions and if required make follow-up with their Clients. Example;if the downloaded file has instructions in overdue status i.e., ‘Waitingfor balances’ on account of shortages of securities in the Client’s account,CMs can ascertain the status and make follow up with their Clientsaccordingly. CMs will be required to click on the link named ‘Auto PayinInstructions status Download’ as exhibited below and enter eitherthe batch number or date range to download the status of uploadedinstructions (auto pay-in). The downloaded file would be zipped using‘WinZip’. Participants will be required to unzip the file and save thesame in their desired folder. File formats and a sample file are enclosedat Annexure A.(ii) POA Client List Download :CMs can download list of its Clients that are currently registered forSPICE. CMs will be required to click on the link named ‘POA Client ListDownload’ as exhibited below. The downloaded file would be zippedusing ‘WinZip’. Participants will be required to unzip the file and savethe same in their desired folder. The status of the Clients would bedisplayed as ‘Accepted’ in the downloaded file provided Participants(where Clients have their demat accounts) have registered (uploadedacceptance file) the Client for SPICE. File formats and a sample file areenclosed at Annexure B.[ 151 ]
Annexure AFile formats for ‘Auto-Payin Instructions status Download’:HEADER RECORDSr. No. Field Description1 CM BP ID2 User ID3 Number of records in file4 Timestamp of creation of file Ddmmyyyyhhmmss formate.g.:01042010142558DETAILED RECORDSr. No. Field Description1 Batch ID Max 8 Integers2 TXN Number Max 15 integers3 SPEED-e Instruction ID Max 15 integers4 DPM Instruction Id Max 15 integers5 CM ID6 DP ID7 Client ID8 POA ID Max 8 Integers9 ISIN Max 12 characters10 Market type Max 24 characters11 Settlement Number Max 7 characters12 Execution Date dd-MMM-yyyy formate.g. 30-Mar-201013 Requested Quantity Decimal with Max size 16e.g.: 123451234512.50014 Settled Quantity Decimal with Max size 16e.g.: 123451234512.50015 Status 2 characters16 Rejection reason 1 Max 5 Integers17 Rejection reason 2 Max 5 Integers18 Rejection reason 3 Max 5 Integers19 Rejection reason 4 Max 5 IntegersNote : Field details would be ‘Charat’ separatedStatus Code and Description:CODE Description00 Rejected at DP03 Withheld by DP in Backoffice04 Rejected by DP in its Backoffice10 Received by SPEED-e11 Received by DP13 Received by DP20 Instruction sent to other depository21 Instruction sent to other depository31 Received by DP32 Received by DP33 Waiting for Counter-Party Instruction[ 152 ]
34 Received by DP35 Closed Partially Settled37 Received by DP38 Transferred40 Waiting for Balances41 Waiting for Balances51 Transferred to CC53 Failed54 Rejected55 Cancelled by DP56 Cancelled by Clearing Corporation57 Cancelled due to ACA99 Updated by DPRejection Reason Code:Rejection DescriptionReason Code3045 ISIN not in valid status3121 Stlm date not equal to system stlm run date3166 Cancelled - Overdue status3167 Cancelled - Not matched status3182 SI rejected; invalid client id3801 Invalid client status61715 Isin does not exist9703 Rejected due to ACA3801 Invalid client status3334 ADO Exec date is before the instruction execution3333 ACA Exec date is same as the instruction execution5013 Invalid Market Details5046 Your instruction has been received beyond the acceptancedeadline5058 Invalid Other Depository ID.5059 The ISIN is Partially Freezed.5060 Invalid Target/Source Market Details combination5061 The Source and Target CM Ids cannot be the same5062 Invalid CM Id & Market Details Combination5015 Qty should not be in decimals5045 Execution date cannot be Sunday5003 Invalid Execution Date5058 Invalid Other Depository ID5014 Quantity should be greater than zero and less than999999999999.9995002 ISIN does not exist5021 Pay In Date is Less Than Exec Date7070 DP holiday7071 CDSL holiday5090 You cannot submit an instruction of current execution dateafter 6 pm IST from Monday to Friday and 3 pm IST onSaturday”[ 153 ]
N000001 CM_USER 4 280520101156497223747 2.09E+08 99661140 12345678 IN000001 IN000000 12589666 12345678 INE784A01011 ROLLING MKT LOT 809184 29-May-10 10 0 13 0 0 0 07223747 2.09E+08 99661150 12345678 IN000001 IN000000 12589666 12345678 INE784A01011 ROLLING MKT LOT 809184 29-May-10 10 0 10 0 0 0 07223747 2.09E+08 99661156 12345678 IN000001 IN000000 12589666 12345678 INE784A01011 ROLLING MKT LOT 809184 29-May-10 10 10 51 0 0 0 07223747 2.09E+08 99661136 12345678 IN000001 IN000000 53534534 12345678 INE784A01011 ROLLING MKT LOT 809184 29-May-10 10 0 99 3045 0 0 0Annexure BFile formats for ‘POA Client List Download’:HEADERSr. No. Field Description1 CM BP ID2 User ID3 Number of records in file4 Timestamp of creation of file Ddmmyyyyhhmmss formate.g.:01042010142558RECORDSr. No. Field Description1 CM BP ID2 DP ID DP ID of the Client3 Client ID4 Current Status Accepted5 POA ID Default 8 spacesIN000001 CM_USER 12 28052010124302IN000001 IN000000 42042043 Accepted 1IN000001 IN000000 42042143 Accepted 1IN000001 IN000000 42042943 Accepted 1IN000001 IN000000 11001915 Accepted 1IN000001 IN000000 10000001 Accepted 12345678IN000001 IN000000 76576857 Accepted 0IN000001 IN000000 10000015 Accepted 1010IN000001 IN000000 19870203 Accepted 100IN000001 IN000000 46453453 Accepted 0IN000001 IN000000 19410002 Accepted 18400003IN000001 IN000000 19410003 Accepted 18400003IN000001 IN000000 19410004 Accepted 18400003Circular No :Sub: Execution date based download of instructions from SPEED-e<strong>NSDL</strong>/POLICY/SPEED-e/ All Participants are hereby informed that based on the representations received2010/0008 from Participants, SPEED-e facility has been enhanced whereby pendingDate: May 26, 2010 instructions can be downloaded based on an execution date. The regulardownload i.e., download of all instructions pending for download will continueto be operative. Post version release, Participants will have the flexibility todownload instructions by either selecting the execution date or through regulardownload. The process flow and important instructions are enclosed atAnnexure A.This feature will be released on SPEED-e facility on Saturday, May 29, 2010.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel: (022) 2499 4361 (email: sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel: (022) 2499 4372 (email: rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel: (022) 2499 4479 (email: narayanv@nsdl.co.in).[ 154 ]
Circular No :<strong>NSDL</strong>/POLICY/SPEED-e/2010/0003Date: March 9, 2010Circular No :<strong>NSDL</strong>/POLICY/SPEED-e/2010/0001Date: January 19, 2010Sub: Incorporation of designated CM BP IDs of NSCCL and ICCL asPre-notified accounts in SPEED-e facilityAttention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2009/0116 dated December 5, 2009 regarding facility for holding Mutual Fund (MF)units in dematerialised form. To facilitate Clients (Password based Users) tosubmit instructions pertaining to MF units (for redemption purpose) throughSPEED-e facility, designated CM BP IDs viz., IN565576 and IN619960 of NationalSecurities Clearing Corporation Limited and Indian Clearing CorporationLimited respectively have been incorporated as pre-notified accounts in theSPEED-e facility. Clients will be able to transfer only MF units (Security typecode ‘20’) into these designated pre-notified pool accounts through SPEED-efacility.This feature is scheduled to be released on SPEED-e facility on March 13,2010.Sub: Participant-wise deadline for submission of instructions with currentdate as the execution date on SPEED-eAs all Participants are aware, the deadline time for submission of instructionsthrough SPEED-e facility by Clients and Clearing Members (CMs) with currentdate as the execution date is upto 7:00 p.m. IST on weekdays and 3:00 p.m.IST on Saturdays. This deadline is uniformly applicable to all Participants.Based on the feedback received from Participants, Participants would begiven the flexibility to decide their own deadlines for their Clients and CMswithin a permissible range. The feature will be released on SPEED-e onSaturday, January 23, 2010. Salient features of this facility are as follows:(i) The current deadline time of 7.00 pm for submission of instructionswith current date as execution date can be extended till 8.15 pm orcan be reduced till 6.00 pm on weekdays. Similarly, the deadline timeof 3.00 pm for submission of instructions on SPEED-e on Saturdays canbe extended till 4.15 pm or can be reduced till 1.30 pm. The deadlinetime for submission of inter depository delivery instructions onSPEED-e on weekdays and Saturdays will remain unchanged.(ii) To avail this feature, Participants will be required to submit a writtenrequest [duly authorized by the Compliance Officer of the Participantstating the Participant name, DP ID and the deadline time to be set-upon SPEED-e as mentioned in point no. (i) above] to SPEED-e cell of<strong>NSDL</strong> at least one day in advance, i.e. prior to the effective date forextending / reducing the deadline time on SPEED-e for submission ofinstructions by their Clients and CMs with current date as the executiondate on weekdays and / or Saturdays.(iii) The request letter should be addressed to:SPEED-e CellNational Securities Depository LimitedTrade World, A-Wing, 4th FloorKamala Mills Compound, Senapati Bapat MargLower ParelMumbai - 400 013.Tel : (022) 2499 4200Fax : (022) 2497 2993[ 155 ]
(iv) Upon receipt of the request from the Participant, <strong>NSDL</strong> will set-up thedeadline time on SPEED-e system. The deadline time once set-up onSPEED-e system will continue with revised deadline time till request tomake changes to the same is received from the Participant.(v) Pursuant to the release of this feature, the current deadline time forsubmission of instructions with current date as the execution date onSPEED-e i.e., 7.00 pm for weekdays and 3.00 pm for Saturdays willcontinue to be effective till request to make changes to the deadlinetime (in the manner mentioned above) is received from Participants.For more information / clarification, Participants are requested to contactthe following officials:Name of the official Telephone Number Email addressMs. Kirti Samant (022) 2499 4424 kirtis@nsdl.co.inMr. Sandeep Kumar (022) 2499 4361 sandeepk@nsdl.co.inMr. Rahul Gupta (022) 2499 4372 rahulg@nsdl.co.inMr. Narayan Venkat (022) 2499 4479 narayanv@nsdl.co.inCircular No :Sub: Launch of SPICE (Submission of Power of attorney based Instructions<strong>NSDL</strong>/POLICY/for Clients Electronically) on SPEED-e / IDeAS2009/0126 All Participants are hereby informed about the introduction of a facility forDate: December 31, auto pay-in of securities named SPICE (Submission of Power of attorney based2009 Instructions for Clients Electronically) using the infrastructure of SPEED-eand IDeAS. The details of the facility are given below:(I) Introduction :This facility is in respect of demat accounts operated on the basis ofPower of Attorney (POA). Many investors execute POA in favour of theirstock brokers (i.e. Clearing Members) and advise their Participantsaccordingly. Based on the POA, Clearing Members (CMs) submitinstructions (auto pay-in) to the Participants (where Clients maintaindemat accounts) to debit the demat accounts of the Clients. SPICEwould enable such CMs to submit digitally signed instructions toParticipant through the SPEED-e facility thereby eliminating the needto give paper based delivery instructions to the Participants.(II) Process :a) CMs can set up registration requests in respect of their Clients (whohave given POA in their favour) on SPEED-e.b) Registration requests can be confirmed by the Clients’ Participantthrough SPEED-e or IDeAS (if not subscribed for SPEED-e facility).c) Upon confirmation by the Clients’ Participant, the Client accounts getregistered for the SPICE facility.d) After Clients are registered for this facility, CM can submit digitallysigned instructions to debit the demat accounts of Clients and creditits pool account through SPEED-e facility.e) Participants of the Clients (where Clients maintain demat accounts)will download these instructions and import it into their DPM systemfor execution.[ 156 ]
(III) Pre-requisites:Entities Subscription to RemarkClearing Member SPEED-e Client should have given POA infavour of the CM for submission ofinstructions.Participant of the CM SPEED-e -Client (beneficiary - Must have given POA in favour ofaccountholder)the CM and POA must have beensubmitted to the Participant.Participant of the Either SPEED-e Must have taken the POA (givenClient or IDeAS by Clients in favour of the CM)documents in its records.(IV)(V)Registration:The Participant of the CM (where the CM maintains the CM Pool Account)and the CM should have subscribed for the SPEED-e facility for availingthe facility of SPICE. In case the CM has not subscribed for SPEED-efacility, the CM will be required to register on SPEED-e by following theexisting process.CMs who wish to avail SPICE facility (existing as well as new subscribersof SPEED-e) will be required to submit an application as per Annexure1 (enclosed) to their Participants (subscribed for SPEED-e facility).Clients of such CMs should have given Power of Attorney (POA) in favourof the CM and POA documents must be in the records of the Participantswhere the Clients are maintaining their demat accounts. Participantsof the CM will be required to forward Annexure 1 (duly authorized bytheir Compliance Officer) to <strong>NSDL</strong> for activating the SPICE facility fortheir CMs.In case CMs shift their CM Pool Accounts, then such CMs will be requiredto re-register their Clients and follow the procedures mentioned above.Workflow:Workflow enclosed at Annexure A.(VI) Back office file formats:Back office file formats for CMs and Participants enclosed at AnnexureB. Further, the file formats will be displayed on SPEED-e website and<strong>NSDL</strong> SQLASSIST intranet site (https://sqlassist). Participants are alsorequested to inform their CMs about the new file formats.(VII) Charges :ParticularsClientParticipantCMCharges payableFreeFreeNo additional charges for CMs for availing SPICE facility.The existing charge of Rs.125 payable per quartertowards subscription for SPEED-e will continue.[ 157 ]
For more information / clarification, Participants are requested to contactthe following officials :Name of the official Telephone Number Email addressMr. Yogesh Parve (022) 2499 4490 yogeshp@nsdl.co.inMr. Sandeep Kumar (022) 2499 4361 sandeepk@nsdl.co.inMr. Narayan Venkat (022) 2499 4479 narayanv@nsdl.co.inAnnexure 1(Draft application to be given on the letter head of the Clearing Member toits Depository Participant)Date :Name of the Compliance OfficerDP Name (DP ID )AddressDear Sir/Madam,We wish to subscribe our Clearing Member (CM) Account for SPICE (Submissionof Power of attorney based Instructions for Clients Electronically) facilitywhich will facilitate us to submit instructions on behalf of Clients (who havegiven Power of Attorney in favour of us) on SPEED-e. We agree that if anysecurities are moved to our CM Pool Account which are not due to us for anyreasons including but not limited to an error or fraud, we undertake toimmediately return the securities to the Client. The details of our accountare as under:CM-BP-ID I NYours faithfully,(Authorised Signatories)To be signed by the current authorized signator(ies) of the Clearing Member=================================================================AuthorisationReceived an application for subscription for SPICE facility from________________________(name of the Clearing member) having CM BP IDIN___________. The application form has been verified with respect to thementioned CM account and certified that the same is in order. We request<strong>NSDL</strong> to activate the CM for SPICE facility.Name of the Compliance Officer ___________________Signature of the Compliance Officer : ______________(Stamp of the DP)Date: ___/___/_______DD MM YYYYPlace_____________[ 158 ]
DPMWEB ImportAnnexure 2SPEED-e File formatsHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)Filler Character 6 15 O Can be used for branch codein futureDP Id Character 8 23 MDP Role Integer 2 25 MTotal number of Detail Records Integer 5 30 MSender Date Date 8 38 MSender Time Character 4 42 MSender User Id Character 8 50 OFiller Character 4 54 O Not in useURL Registration No Integer 5 59 MTotal 59Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Trailer Record (19)Filler Character 6 15 O Can be used for branch codein futureCM pool Delivery Qty Decimal 15 30 O 12+3 without decimal pointFiller Decimal 15 45 O Not in UseFiller Decimal 15 60 O Not in UseDFP Instruction Total Qty Decimal 15 75 O 12+3 without decimal pointFiller Decimal 15 90 O Not in UseDelivery Out Instruction Total Qty Decimal 15 105 O 12+3 without decimal pointInter Settlement Instruction Total Qty Decimal 15 120 O 12+3 without decimal pointFiller Decimal 15 135 O Not in UseFiller Decimal 15 150 O Not in UseFiller Decimal 15 165 O Not in UseFiller Decimal 15 180 O Not in UseIrreversible Delivery Out Total Qty Decimal 15 195 O 12+3 without decimal pointInter Depository Transfer DFP Decimal 15 210 O 12+3 without decimal pointFiller Decimal 15 225 Not in UseFiller Decimal 15 240 O Not in UseFiller Character 7 247 O Not in UseGrand Total of Qty Decimal 15 262 M 12+3 without decimal pointTotal 262Inter Transfer Instruction(DFP) (904)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)[ 159 ]
Line Number Integer 5 14 MTransaction Type Integer 3 17 M 904Transaction Flag Character 1 18 M It should be ‘A’ for all ordersFiller Character 7 25 O Not in UseClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 OSettlement Number Character 7 79 OExecution Date Date 8 87 MFiller Character 6 93 O Not in UseOther DP Id Character 8 101 MOther Client Id Integer 8 109 O Required only if target clientis House/NonHouse i.e. CM BPId is not presentFiller Integer 2 111 O For POA instruction submiteedby CM filler is '11'. For CCfiller is '12'.Other CM BP Id Character 8 119 O Required only if target is a CMFiller Character 9 128 O Not in UseInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 OInternet Transaction Id Integer 15 233 O Added for Internet TransactionID,Internet Instruction ID Integer 15 248 M Added for Internet InstructionID,Consideration Character 15 263 M Required only if target clientis House/NonHouse i.e. CM BPId and settlement number arenot present and market typeis 00.Reason/Purpose Character 20 283 M Required only if target clientis House/NonHouse i.e. CM BPId and settlement number arenot present and market typeis 00.Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 28 313 O Not in UseTotal 313Delivery Out Instruction (906)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 906Transaction Flag Character 1 18 M It should be ‘A’ for all orders[ 160 ]
Filler Character 7 25 O Not in UseClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 MSettlement Number Character 7 79 MExecution Date Date 8 87 MFiller Character 41 128 O Not in UseInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 OInternet Transaction Id Integer 15 233 O Added for Internet TransactionID,Internet Instruction ID Integer 15 248 M Added for Internet InstructionID,Filler Character 35 283 O Not in use (Fillers Added inthe place of Consideration &Reason/purpose, for keepingthe length of detail record inDownload file same)Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 28 313 O Not in UseTotal 313Inter Settlement Transfer Instruction (907)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 907Transaction Flag Character 1 18 M It should be ‘A’ for all ordersFiller Character 7 25 O Used for pledge closure/invocationClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 M .Settlement Number Character 7 79 MExecution Date Date 8 87 MFiller Character 32 119 OOther Market Type Integer 2 121 MOther Settlement Number Character 7 128 MInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 O[ 161 ]
Internet Transaction Id Integer 15 233 O Added for Internet TransactionID,Internet Instruction ID Integer 15 248 M Added for Internet InstructionID,Filler Character 35 283 O Not in use (Fillers Added inthe place of Consideration &Reason/purpose, for keepingthe length of detail record inDownload file same)Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 28 313 O Not in UseTotal 313Irreversible Delivery Out Instruction (912)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 912Transaction Flag Character 1 18 M It should be ‘A’ for all ordersFiller Character 7 25 O Not in UseClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 MSettlement Number Character 7 79 MExecution Date Date 8 87 MFiller Character 6 93 OIrreversible Reason Code 1 Integer 4 97 OIrreversible Reason Code 2 Integer 4 101 OIrreversible Reason Code 3 Integer 4 105 OIrreversible Reason Code 4 Integer 4 109 OFiller Character 19 128 O Not in UseInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 OInternet Transaction Id Integer 15 233 O Added for Internet TransactionID,Internet Instruction ID Integer 15 248 M Added for Internet InstructionID,Filler Character 35 283 O Not in use (Fillers Added inthe place of Consideration &Reason/purpose, for keepingthe length of detail record inDownload file same)Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BO[ 162 ]
Filler Character 28 313 O Not in UseTotal 313CM pool to pool transfer(934)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 934Transaction Flag Character 1 18 M It should be ‘A’ for all ordersFiller Character 7 25 O Not in UseClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 OSettlement Number Character 7 79 OExecution Date Date 8 87 MFiller Character 6 93 O Not in UseOther DP Id Character 8 101 OOther Client Id Integer 8 109 O Required only if target clientis House/NonHouse i.e. CM BPId is not presentFiller Integer 2 111 OOther CM BP Id Character 8 119 M Required only if target is a CMOther Market Type Integer 2 121 OOther Settlement Number Character 7 128 OInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 OInternet Transaction Id Integer 15 233 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 248 M Added for Internet InstructionID, earlier not in useFiller Character 35 283 O Not in use (Fillers Added inthe place of Consideration &Reason/purpose, for keepingthe length of detail record inDownload file same)Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 28 313 O Not in UseTotal 313Detail record for Inter Transfer Instruction (925)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 925[ 163 ]
Transaction Flag Character 1 18 M It should be ‘A’ for all ordersFiller Character 7 25 O Not in UseClient Id Integer 8 33 MISIN Character 12 45 MQuantity Decimal 15 60 M 12+3 without decimal pointFiller Character 10 70 OMarket Type Integer 2 72 OSettlement Number Character 7 79 OExecution Date Date 8 87 MFiller Character 6 93 O Not in UseOther Client Code Character 16 109 MFiller Integer 2 111 OOther Depository Id Character 8 119 M IN000026Filler Character 9 128 OInternal Reference Number/Remarks Character 20 148 O RemarksSender Reference Number 1 Character 35 183 OSender Reference Number 2 Character 35 218 OInternet Transaction Id Integer 15 233 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 248 M Added for Internet InstructionID, earlier not in useConsideration Character 15 263 M Required only if target clientis House/NonHouse i.e.settlement number is notpresent and market type is00.Reason / Purpose Character 20 283 M Required only if target clientis House/NonHouse i.e.settlement number is notpresent and market type is00.Routing Indicator Integer 2 285 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOOther Settlement Details Integer 13 298 OFiller Character 15 313 O Not in UseTotal 313when URL 90001 Routing Indicator BackOffice02 Captured01 Captured and VR03 With held with DP04 Rejected05 Only VRwhen URL 10001 Routing Indicator SpeedeAlways 00Capture and VR[ 164 ]
Response FileDescription Data Type Size End Status RemarksFile begin Indicator Character 2 2 M It should be '{}' by defaultHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)Filler Character 6 15 O Can be used for branch codein futureDP Id Character 8 23 MDP Role Integer 2 25 MBatch Acceptance Status Character 1 26 M A-Successful VerificationRelease,R- Failure duringVerification- ReleaseTotal number of Detail Records Integer 5 31 MBusiness Date Date 8 39 M YYYYMMDDSender User Id Character 8 47 OFiller Character 9 56 O Not in useURL Registration No Integer 5 61 MDetail Record (904, 906,907)Total 61Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Character 3 17 MTransaction Flag Character 1 18 MInstruction Id Integer 9 27 M Instruction id generated byDPM.Internal Reference Number Character 20 47 OSender Reference Number 1 Character 35 82 OSender Reference Number 2 Character 35 117 OInternet Transaction Id Integer 15 132 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 147 M Added for Internet InstructionID, earlier not in useOrder Status integer 2 149 M List given below.Status change date time Date time 14 163 M System date timeFiller Integer 7 170 O Can be used to representOriginal Order ReferenceNumber for pledge closure,pledge invocation, closureconfirmation and invocationconfirmation. Also can beused for SLB - Lend andBorrowClient Id Integer 8 178 M[ 165 ]
ISIN Character 12 190 MQuantity Decimal 15 205 M 12+3 without decimal point(for manual and automaticDelivery Out, quantityexecuted, i.e. sent to DM)Filler Character 2 207 O Can be used to representlock-in codeFiller Character 8 215 O Can be used to representlock-in reasonMarket Type Integer 2 217 OSettlement Number Character 7 224 OExecution Date/Closure Date Date 8 232 O Execution date for accounttransfer/DO /CorporateAction/inter settlement,Closure Date for Pledging andHypothecation (Pledgor,Pledgee) and SLBFiller Character 6 238 O Can be used for branch codein futureOther DP Id/Related DP Id Character 8 246 O Applicable in case of DFP/RFP/Pledge/SLB. Related DPId for <strong>NSDL</strong> transferinstructionOther Client Id/No. of certificates Integer 8 254 O Applicable in case of DFP/RFP/Intra transfer/Pledge/Demat/ Remat/ SLB.Filler Integer 2 256 O For POA instruction submiteedby CM filler is '11'. For CCfiller is '12'.Other CM BP Id Character 8 264 O only for DFP/RFP subject toother a/c is of CMOther Market Type Integer 2 266 O Applicable in case of InterSettlement transferOther Settlement Number Character 7 273 O Applicable in case of InterSettlement transferFiller Character 20 293 O Can be used to representagreement no which ismandatory for pledge/SLBinstructionRejection reason code 1 Integer 5 298 ORejection reason code 2 Integer 5 303 ORejection reason code 3 Integer 5 308 ORejection reason code 4 Integer 5 313 ORouting Indicator Integer 2 315 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 8 323 OTotal 323[ 166 ]
Detail Record (912- Irreversible Delivery Out)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Character 3 17 MTransaction Flag Character 1 18 MInstruction Id Integer 9 27 MInternal Reference Number Character 20 47 OSender Reference Number 1 Character 35 82 OSender Reference Number 2 Character 35 117 OInternet Transaction Id Integer 15 132 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 147 M Added for Internet InstructionID, earlier not in useOrder Status integer 2 149 M List given below.Status change date time Date time 14 163 M System date timeFiller Integer 7 170 OClient Id Integer 8 178 MISIN Character 12 190 MQuantity Decimal 15 205 M 12+3 without decimal point(for manual and automaticDelivery Out, quantityexecuted, i.e. sent to DM)Filler Character 10 215 OMarket Type Integer 2 217 OSettlement Number Character 7 224 OExecution Date Date 8 232 OFiller Character 6 238 O Can be used for branch codein futureIrreversible Reason Code 1 Integer 4 242Irreversible Reason Code 2 Integer 4 246Irreversible Reason Code 3 Integer 4 250Irreversible Reason Code 4 Integer 4 254Filler Character 19 273Filler Character 20 293 ORejection reason code 1 Integer 5 298 ORejection reason code 2 Integer 5 303 ORejection reason code 3 Integer 5 308 ORejection reason code 4 Integer 5 313 ORouting Indicator Integer 2 315 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 8 323 OTotal 323[ 167 ]
Detail Record (934 CM pool to pool)Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Character 3 17 MTransaction Flag Character 1 18 MInstruction Id Integer 9 27 M Instruction id generated byDPM.Internal Reference Number Character 20 47 OSender Reference Number 1 Character 35 82 OSender Reference Number 2 Character 35 117 OInternet Transaction Id Integer 15 132 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 147 M Added for Internet InstructionID, earlier not in useOrder Status integer 2 149 M List given below.Status change date time Date time 14 163 M System date timeFiller Integer 7 170 O Can be used to representOriginal Order ReferenceNumber for pledge closure,pledge invocation, closureconfirmation and invocationconfirmation. Also can beused for SLB - Lend andBorrowClient Id Integer 8 178 MISIN Character 12 190 MQuantity Decimal 15 205 M 12+3 without decimal point(for manual and automaticDelivery Out, quantityexecuted, i.e. sent to DM)Filler Character 2 207 O Can be used to representlock-in codeFiller Character 8 215 O Can be used to representlock-in reasonMarket Type Integer 2 217 O List given belowSettlement Number Character 7 224 OExecution Date/Closure Date Date 8 232 O Execution date for accounttransfer/DO /CorporateAction/inter settlement,Closure Date for Pledging andHypothecation (Pledgor,Pledgee) and SLBFiller Character 6 238 O Can be used for branch codein futureFiller Character 8 246 O Applicable in case of DFP/RFP/Pledge/SLB. Related DPId for <strong>NSDL</strong> transferinstruction[ 168 ]
Filler Integer 8 254 O Applicable in case of DFP/RFP/Intra transfer/Pledge/Demat/ Remat/ SLB.Filler Integer 2 256 OOther CM BP Id Character 8 264 O only for DFP/RFP subject toother a/c is of CMOther Market Type Integer 2 266 O Applicable in case of InterSettlement transferOther Settlement Number Character 7 273 O Applicable in case of InterSettlement transferFiller Character 20 293 O Can be used to representagreement no which ismandatory for pledge/SLBinstructionRejection reason code 1 Integer 5 298 ORejection reason code 2 Integer 5 303 ORejection reason code 3 Integer 5 308 ORejection reason code 4 Integer 5 313 ORouting Indicator Integer 2 315 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 8 323 OTotal 323Detail Record (925 Inter-Depository )Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Character 3 17 MTransaction Flag Character 1 18 MInstruction Id Integer 9 27 M Instruction id generated byDPM.Internal Reference Number Character 20 47 OSender Reference Number 1 Character 35 82 OSender Reference Number 2 Character 35 117 OInternet Transaction Id Integer 15 132 O Added for Internet TransactionID, earlier not in useInternet Instruction ID Integer 15 147 M Added for Internet InstructionID, earlier not in useOrder Status integer 2 149 M List given below.Status change date time Date time 14 163 M System date timeFiller Integer 7 170 O Can be used to representOriginal Order ReferenceNumber for pledge closure,pledge invocation, closureconfirmation and invocationconfirmation. Also can beused for SLB - Lend andBorrow[ 169 ]
Client Id Integer 8 178 MISIN Character 12 190 MQuantity Decimal 15 205 M 12+3 without decimal point(for manual and automaticDelivery Out, quantityexecuted, i.e. sent to DM)Filler Character 2 207 O Can be used to representlock-in codeFiller Character 8 215 O Can be used to representlock-in reasonMarket Type Integer 2 217 OSettlement Number Character 7 224 OExecution Date/Closure Date Date 8 232 O Execution date for accounttransfer/DO /CorporateAction/inter settlement,Closure Date for Pledging andHypothecation (Pledgor,Pledgee) and SLBFiller Character 6 238 O Can be used for branch codein futureOther Client Code Integer 16 254 OFiller Integer 2 256 OOther Depository Id Character 8 264 O IN000026Filler Integer 2 266 O SpacesFiller Character 7 273 O SpacesOther Settlement Details Integer 13 286 OFiller Character 7 293 O Can be used to representagreement no which ismandatory for pledge/SLBinstructionRejection reason code 1 Integer 5 298 ORejection reason code 2 Integer 5 303 ORejection reason code 3 Integer 5 308 ORejection reason code 4 Integer 5 313 ORouting Indicator Integer 2 315 M 00 in case of SPEED-e batch01,02,03,04,05 - in caserouted through BOFiller Character 8 323 OTotal 323Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Trailer Record (19)Filler Character 6 15 O Can be used for branch codein futureCM pool Delivery Accepted Qty Decimal 15 30 O 12+3 without decimal pointCM pool Delivery Rejected Qty Decimal 15 45 O 12+3 without decimal pointFiller Decimal 30 75 O Not in Use[ 170 ]
Filler Decimal 30 105 O Not in UseDFP Instruction Accepted Qty Decimal 15 120 O 12+3 without decimal pointDFP Instruction Rejected Qty Decimal 15 135 O 12+3 without decimal pointFiller Decimal 30 165 O Not in UseDelivery Out Instruction Accepted Qty Decimal 15 180 O 12+3 without decimal pointDelivery Out Instruction Rejected Qty Decimal 15 195 O 12+3 without decimal pointInter Settlement Instruction Accepted Decimal 15 210 O 12+3 without decimal pointQtyInter Settlement Instruction Rejected Decimal 15 225 O 12+3 without decimal pointQtyFiller Decimal 30 255 O Not in UseFiller Decimal 30 285 O Not in UseFiller Decimal 30 315 O Not in UseFiller Decimal 30 345 O Not in UseIrreversible Delivery Out Accepted Qty Decimal 15 360 O 12+3 without decimal pointIrreversible Delivery Out Rejected Qty Decimal 15 375 O 12+3 without decimal pointInter Depository Delivery Accepted Qty Decimal 15 390 O 12+3 without decimal pointInter Depository Delivery Rejected Qty Decimal 15 405 O 12+3 without decimal pointFiller Decimal 30 435 O Not in UseFiller Decimal 30 465 O Not in UseFiller Character 7 472 O Not in UseGrand Total of Accepted Qty Decimal 15 487 M 12+3 without decimal pointGrand Total of Rejected Qty Decimal 15 502 M 12+3 without decimal pointFile end Indicator RecordTotal 502Description Data Type Size End Status RemarksFile end Indicator Character 2 2 M It should be '{}' by defaultwhen URL is 90001 Routing Indicator BackOffice02 Captured01 Captured and VR03 With held with DP04 Rejected05 Only VRwhen URL is 10001 Routing Indicator SpeedeAlways 00Capture and VR[ 171 ]
Change Orders for the Day (COD)Description Data Type Size End Status RemarksFile begin Indicator Character 2 2 M It should be ‘{}’ by defaultHeader RecordDescription Data Type Size End Status RemarksRecord Type Integer 2 2 M Header Record (11)DP Id Character 8 10 MFull/Incremental Flag Character 1 11 M F- Full, I – Incremental,Default to FLast Export date and time Date 14 25 O Can be used to represent last exportdate and time in case of incrementalimportFiller Date 8 33 O Not in useStatement Preparation Date Date 8 41 M System DateStatement Preparation Time Time 6 47 M System TimeTotal number of Detail Records Integer 9 56 MURL Registration No Integer 5 61 MFiller Character 9 70 O Not in useDetail RecordTOTAL 70Description Data Type Size End Status RemarksRecord Type Integer 2 2 M Detail Record (12)Line Number Integer 9 11 MFiller Character 6 17 O Can be used for branch code in futureTransaction Type Integer 3 20 M List given belowTransaction No. Integer 9 29 M Transaction number of DPM.Order Status from integer 2 31 M List given below.Order Status to integer 2 33 M List given belowCancellation Status from integer 2 35 M List given belowCancellation Status to integer 2 37 M List given belowStatus change date time Date time 14 51 O System date timeFiller Integer 7 58 O May be used in future to representoriginal order reference no of pledgeclosure, pledge invocation, closureconfirmation and invocationconfirmation. It may also used forSLB.ISIN Character 12 70 MRequested Quantity Decimal 15 85 M 12+3 without decimal pointBooked Quantity Decimal 15 100 M 12+3 without decimal point (formanual and automatic Delivery Out,quantity executed, i.e. sent to DM)Internet Transaction Id Integer 15 115 O Added for Internet Transaction ID,earlier not in useInternet Instruction ID Number 15 130 MFiller Character 10 140 OTotal 140[ 172 ]
Trailer RecordDescription Data Type Size End Status RemarksRecord Type Integer 2 2 M Trailer Record (19)Filler Character 6 8 O Can be used for branch code infutureFiller Decimal 30 38 O Not in UseFiller Decimal 30 68 O Not in UseTotal CM pool Delivery Decimal 15 83 O 12+3 without decimal pointRequested QtyTotal CM pool Delivery Decimal 15 98 O 12+3 without decimal pointBooked QtyTotal DFP Instruction Decimal 15 113 O 12+3 without decimal pointRequested QtyTotal DFP Instruction Decimal 15 128 O 12+3 without decimal pointBooked QtyFiller Decimal 30 158 O Not in UseTotal Delivery Out Instruction Decimal 15 173 O 12+3 without decimal pointRequested QtyTotal Delivery Out Instruction Decimal 15 188 O 12+3 without decimal pointBooked QtyTotal Inter Settlement Decimal 15 203 O 12+3 without decimal pointInstruction Requested QtyTotal Inter Settlement Decimal 15 218 O 12+3 without decimal pointInstruction Booked QtyFiller Decimal 30 248 O Not in UseFiller Decimal 30 278 O Not in UseFiller Decimal 30 308 O Not in UseFiller Decimal 30 338 O Not in UseTotal Irreversible Delivery Decimal 15 353 O 12+3 without decimal pointOut Requested QtyTotal Irreversible Delivery Decimal 15 368 O 12+3 without decimal pointOut Booked QtyFiller Decimal 30 398 O Not in UseFiller Decimal 30 428 O Not in UseFiller Decimal 30 458 O Not in UseFiller Character 7 465 O Not in UseGrand Total of Requested Qty Decimal 15 480 M 12+3 without decimal pointGrand Total of Booked Qty Decimal 15 495 M 12+3 without decimal pointFile end Indicator RecordTotal 495Description Data Type Size End Status RemarksFile end Indicator Character 2 2 M It should be ‘{}’ by default[ 173 ]
Annexure ASalient features of the facility and detailed work flowSr.No.Work FlowReference no. of the fileformat as per Annexure B1 CM will register the Client IDs on SPEED-e on behalf of whom itwishes to submit instructions using Digital Signature Certificate(DSC) through upload link "Upload (POA Registration)"1.1 - Client Registration byCM.2 The status of the Client registration can be ascertained by the CMby downloading the response file through link "View status (POARegistration)".3 Participants (where the Client has the demat account) willdownload the Client registration file (uploaded by CM) throughSPEED-e / IDeAS (IDeAS in case the Participant has not subscribedfor SPEED-e facility) website through link “Download (POARegistration)”1.2 - Response file for ClientRegistration.1.3 - Batch Download byParticipant with respect tobatch uploaded by CM forClient registration.4 The downloaded file will carry the signature of <strong>NSDL</strong>. Participantswill verify the file using signature verification utility (SVU). TheSVU can be downloaded from SPEED-e / IDeAS website. Thereafter,the prescribed file as per 1.4 will be uploaded by Participants usingDSC through link “Upload (POA Authorisation)”. The file will containdetails as to whether the Participant has accepted or rejected theClient registration for this facility. Participants should ensure thatacceptance is provided only for those Clients (on whose behalf theCM will be submitting instructions through SPEED-e) who havegiven POA in favour of the CM.5 Participants can ascertain the status of the records with respect tothe file uploaded by them by downloading a response file throughlink "View Status (POA Authorisation)".1.4 - Batch Upload byParticipant for accepting /rejecting the requestssubmitted by the CM.1.5 - View Response file6 Once Clients are registered for this facility, CM can start submittinginstructions on behalf of the Clients on SPEED-e through link“Upload Auto- Payin Instruction”1.6 - Batch Upload by CM onbehalf of Clients7 Participants will download the instructions, verify it with the SVUand upload the same into the DPM System. For this purpose, adownload link is provided on SPEED-e / IDeAS and necessary ‘EXE’will be required to be loaded in the DPM system.A separate indicator to identify POA based instructions submittedby CMs is provided in the download instructions file.8 In case the Client revokes the POA then Participant shouldimmediately ensure to upload rejection file on SPEED-e / IDeAS asthe case may be and discontinue the facility for the Client. Therequisite link to upload is “Upload (POA Authorisation)”.Annexure 21.4 - Batch Upload byParticipant for accepting /rejecting the requestssubmitted by the CM.[ 174 ]
Annexure B1.1 Batch Upload - Client registration by CMFile begin Indicator RecordDescription Data Type Size End Status RemarksFile begin Indicator Character 2 2 M It should be '{}' by defaultHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)CM BP ID Character 8 17 MTotal number of Detail Records Integer 5 22 MFiller Character 10 32 O Default SpacesTotal 32Detail recordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (12)Line Number Integer 5 14 MDP Id Character 8 22 MClient ID Integer 8 30 MPOA ID Integer 8 38 OFiller Character 12 50 O Default spacesTotal 50File end Indicator RecordDescription Data Type Size End Status RemarksFile end Indicator Character 2 2 M It should be '{}' by default1.2 Response file for Client RegistrationHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)CM BP ID Character 8 17 MTotal number of Detail Records Integer 5 22 MResponse Creation Date Date 8 30 MResponse Creation Time Character 4 34 MDetail RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Flag Character 1 15 MInstruction ID Integer 15 30 MInstruction capture date time Date time 14 44 M System date time[ 175 ]
Order Status Character 2 46Rejection reason code 1 Integer 5 51 O Default '00000'Rejection reason code 2 Integer 5 56 O Default '00000'Rejection reason code 3 Integer 5 61 O Default '00000'Rejection reason code 4 Integer 5 66 O Default '00000'Filler Character 10 76 O Default spacesTotal 76Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord type Character 2 9 M Trailer Record (19)Filler Character 10 19 O Default SpacesTotal 191.3 Batch Download by Participant with respect to batch uploaded by CM for Client registrationHeaderDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)DP Id Character 8 17 MTotal number of Detail Records Integer 5 22 MFile create Date Integer 8 30 O System DateFile create Time Integer 4 34 O System TimeTotal 34Detail RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14Client Id Integer 8 22 MCM BP Id Character 8 30 MPOA ID Integer 8 38 OStatus Character 1 39 M S - SubmittedFiller character 11 50 O Default SpacesTotal 50Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord type Character 2 9 M Trailer Record (19)Filler Character 10 19 O Default SpacesTotal 19[ 176 ]
1.4 Batch Upload by Participant for accepting / rejecting the requests submitted by the CM.HeaderDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)DP Id Character 8 17 MTotal number of Detail Records Integer 5 22 MFile create Date Integer 8 30 OFile create Time Integer 4 34 OTotal 34Detail RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14Client Id Integer 8 22 MCM BP Id Character 8 30 MPOA ID Integer 8 38 OStatus Character 1 39 M A - AcceptedR - RejectedFiller Character 11 50 O Default SpacesTotal 50Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord type Character 2 9 M Trailer Record (19)Filler Character 10 19 O Default SpacesTotal 191.5 View Response fileHeaderDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)DP ID Character 8 17 MTotal number of Detail Records Integer 5 22 MResponse Creation Date Date 8 30 MResponse Creation Time Character 4 34 MDetail RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Flag Character 1 15 MInternet Instruction ID Integer 15 30 M[ 177 ]
Order Status integer 2 32 MInstruction capture date time Date time 14 46 M System date timeRejection reason code 1 Integer 5 51 O Default '00000'Rejection reason code 2 Integer 5 56 O Default '00000'Rejection reason code 3 Integer 5 61 O Default '00000'Rejection reason code 4 Integer 5 66 O Default '00000'Filler Character 10 76 O Default spacesTrailer RecordTotal 76Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord type Character 2 9 M Trailer Record (19)Filler Character 10 19 O Default SpacesTotal 191.6 Batch Upload by CM on behalf of ClientsFile begin Indicator RecordDescription Data Type Size End Status RemarksFile begin Indicator Character 2 2 M It should be '{}' by defaultHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Header Record (11)Filler Character 6 15 O Can be used for branch codein future.CM BP ID / DP Id / CC Id Character 8 23 MTotal number of Detail Records Integer 5 28 MRole Character 2 30 O Mandatory if batch has POAinstructions. Role are asfollows:-CMTotal 30Detail record:-Description Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Detail Record (12)Line Number Integer 5 14 MTransaction Type Integer 3 17 M 940 for Auto-PayinInstructionTransaction Flag Character 1 18 M It should be A for all ordersFiller Character 7 25 O Not in UseISIN Character 12 37 MQuantity Decimal 15 52 M 12+3 without decimal pointMarket Type Integer 2 54 MSettlement Number Character 7 61 MExecution Date Date 8 69 M[ 178 ]
Source DP Id Character 8 77 MSource Client Id Integer 8 85 MTarget CM BP Id Character 8 93 MFiller Character 1 94 O Not in UseInternal Reference Number/Remarks Character 20 114 O Remarks, PopulateReference Details as in CMBOPOA ID Integer 8 122 OFiller Character 22 144 O Not in UseTotal 144Trailer RecordDescription Data Type Size End Status RemarksBatch Number Integer 7 7 MRecord Type Integer 2 9 M Trailer Record (19)Filler Character 6 15 O Default spacesFiller Decimal 15 30 O Default 15 Zero'sFiller Decimal 15 45 O Default 15 Zero'sFiller Decimal 15 60 O Default 15 Zero'sDFP Instruction Total Qty Decimal 15 75 O 12+3 without decimal pointFiller Decimal 15 90 O Default 15 Zero'sDelivery Out Instruction Total Qty Decimal 15 105 O 12+3 without decimal pointInter Settlement Instruction Total Qty Decimal 15 120 O 12+3 without decimal pointInter Depository Instruction Total Qty Decimal 15 135 O 12+3 without decimal pointAuto - Payin Instruction Total Qty Decimal 15 150 O 12+3 without decimal pointFiller Decimal 15 165 O Default 15 Zero'sFiller Decimal 15 180 O Default 15 Zero'sIrreversible Delivery Out Total Qty Decimal 15 195 O 12+3 without decimal pointPool to Pool Instruction Total Qty Decimal 15 210 O Default 15 Zero'sFiller Decimal 15 225 O Default 15 Zero'sFiller Decimal 15 240 O Default 15 Zero'sFiller Character 7 247 O Default spacesGrand Total of Qty Decimal 15 262 M 12+3 without decimal pointTotal 262Circular No :Sub: Change in e-Token Specification for SPEED-e facility<strong>NSDL</strong>/POLICY/As all Participants are aware, Participants and Clients who have subscribed to2009/0120 SPEED-e facility as e-Token User can access the SPEED-e website throughDate: December 7, 2009 digital signature certificate using the e-Token facility (Ref.: Circular No. <strong>NSDL</strong>/POLICY/2008/0013 dated March 3, 2008). The specifications for e-Token wereas given below:e-TokenAladdin e-Tokene-Token Memory Size Option32KThe 32K memory is now upgraded to 72K memory and its cost is around Rs.1000(which is same as the cost for 32K e-Token). Henceforth, Participants procuringe-Tokens are advised to procure the 72K e-Token. They should also advise thesame to their Clients. Existing users who have 32K e-Token can continue touse the same.For any clarification with respect to e-Token, Participants are requested tocontact Mr. Ganesh Pawar / Mr. Rahul Mehta on 022-24994447/ 4456.[ 179 ]
Circular No :Sub: Facility of Inter Depository Delivery Instructions on SPEED-e<strong>NSDL</strong>/POLICY/All Participants are hereby informed that facility to submit Inter DepositorySPEED-e/2009/0008 Delivery Instructions (IDD) on SPEED-e will commence on Saturday, SeptemberDate: September 10, 12, 2009. In this regard, the deadline timings for submitting IDD instructions2009 on SPEED-e will be as follows:Particulars Days TimingsDeadline time for Clearing Members Weekdays (Monday 5.00 pm(CMs) / Clients (smart card / e-tokento Friday)Users) to submit instructions onSPEED-e with same day execution date Saturdays 1.30 pmParticipants are requested to note the following:1) Clients and CMs can continue to submit future dated IDD instructionson SPEED-e after the aforesaid deadline time.2) Participants should download at least one batch of instructions fromSPEED-e after the aforesaid deadline time and ensure to upload thesame into the DPM System before the prescribed deadline time forexecuting Inter Depository Transfer instructions i.e., 6.00 pm onweekdays and 2.30 pm on Saturdays.3) Participants are requested to refer to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/SPEED-e/2009/0004 dated June 15, 2009 in regard to changes to theback office file formats.(i) Participants who route their SPEED-e instructions through backoffice system and thereafter upload the same into the DPM Systemare requested to be ready with the latest back office file formatsby September 11, 2009 otherwise routing instruction through backoffice would not be feasible. Participants will then have to directlyimport instruction downloaded from SPEED-e into DPM system.(ii) Operations of SPEED-e remain unchanged for Participants whodownload instructions from SPEED-e and upload them directlyinto the DPM System.4) If the back office file formats of Clients / CMs are not ready by theversion release date i.e. September 12, 2009, they can still continue tosubmit instructions with the existing file formats with respect to theexisting features available on SPEED-e (i.e., Delivery-Out to ClearingCorporation, Inter-settlement, CM Pool to CM Pool and Delivery toClient in case of CMs and Delivery to CM and Delivery to Client in caseof Clients).5) New web-import utility will be provided to Participants in the CompactDisk (CD) containing DPM System Version 9.7 (scheduled to be releasedon September 12, 2009, ref Circular No. <strong>NSDL</strong>/POLICY/2009/0081 datedSeptember 5, 2009). Upon installing DPM System Version 9.7 in the DPMserver, the new web-import will automatically get installed.6) Clients (smart card / e-token Users) who wish to submit IDD instructionswill be required to mention the ‘Consideration’ and ‘Reasons/Purpose’(ref Circular No. <strong>NSDL</strong>/POLICY/SPEED-e/2008/0007 dated December13, 2008). These are mandatory fields in the SPEED-e system.Alongwith the aforesaid launch, ‘Pending Instruction’ option (under ‘Inquiries’)has been enhanced which will facilitate Participant to view various types ofinstructions submitted by their CMs and Clients on SPEED-e which are pending[ 180 ]
Circular No :<strong>NSDL</strong>/POLICY/SPEED-e/2009/0004Date: June 15, 2009for download. Upon entering the execution date, following details will bedisplayed:=================================================================Execution date Instruction Number of Number ofType Pending Instructions Late Submissions=================================================================It may be noted that submission of IDT instruction through SPEED-e will beavailable for all smart card / e-token users of SPEED-e. Further, SPEED-e willreflect the following status transition for IDT instruction submitted fromSPEED-e:Actions initiated Various status of instructions displayedon SPEED-e for Clients / CMsInstruction submitted by Clients / Pending (Instructions that are yet to beCMs on SPEED-eauthorized) / Received by SPEED-eInstruction downloaded by Received by DPParticipantAfter instructions are uploaded Accepted by <strong>NSDL</strong>by Participant on the DPM System Instruction Sent to other DepositoryTransferredWaiting for BalancesFailedCanceled by DPRejected at DPRejectedWithheld by DP in BackofficeReceived by DPRejected by DP in its BackofficeUpdated By DPFor further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Sub : Facility to submit Inter -Depository Delivery Instructions onSPEED-eAll Participants are hereby informed that SPEED-e facility is being enhancedto include the feature of enabling investors / clearing members (CMs) tosubmit Inter Depository Delivery (IDD) instructions. This facility will beavailable only to Smart Card / E-token Users. IDD instructions can be submittedon interactive as well as batch mode basis.Participants who route their SPEED-e instructions through their back officeand thereafter upload the same into the DPM System are requested to makenecessary changes in their back office as highlighted in the enclosed fileformat at Annexure A by July 15, 2009. Changes in the existing file formatsfor Clients and CMs are enclosed at Annexure B which will also be displayedon the SPEED-e website. Participants are requested to inform their Clients /[ 181 ]
CMs about the new file formats. Even after the release of new version, Clients/ CMs can upload other type of instructions in batch mode as per the existingfile formats.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :Sub : View facility on SPEED-e for Participants in respect of off-market<strong>NSDL</strong>/POLICY/instructions submitted by Clients on SPEED-eSPEED-e/2009/0003 A facility to view off-markets instructions (submitted by smart card /Date: May 15, 2009 e-token Users through SPEED-e) on SPEED-e has been provided for Participantssubscribed for SPEED-e facility. Participants are requested to follow the processenclosed at Annexure I for viewing the off-market instruction details.Participants can view off-market instruction details of past three months.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar [Tel : (022) 2499 4361 / email : sandeepk@nsdl.co.in] /Mr. Rahul Gupta [Tel : (022) 2499 4372 / email : rahulg@nsdl.co.in].Annexure I(i) Click on icon “View Off Market Transactions” under Inquiries.(ii) Make a search on all or any of the parameter(s) i.e.:(a) SPEED-e transaction no.,(b) DP instruction no.,(c) ISIN,(d) Client ID,(e) Execution date (From - To).(iii) Upon specifying the parameter(s), Participants can view details of offmarketinstructions such as source & target Client ID, ISIN, Quantity,DPM instruction number, SPEED-e transaction / instruction number,Consideration, Reasons / Purpose etc.Circular No.Sub: Launch of Virtual Keyboard on IDeAS / SPEED-e websites to facilitate<strong>NSDL</strong>/POLICY/Users to enter password in more secured manner and change in minimum2009/0027 configuration for accessing IDeAS / SPEED-e websitesDate: April 11, 2009 All Participants are hereby informed that <strong>NSDL</strong> is pleased to announce thelaunch of virtual keyboard on IDeAS (https://ideas.nsdl.com) / SPEED-e(https://speed-e.nsdl.com) websites to facilitate Users to enter their passwordin a more secured manner. This feature is released on April 11, 2009. Salientfeatures of Virtual Keyboard are as follows:(i) This feature is available for password based Users of IDeAS andSPEED-e facility and Clearing Members availing the facility of IDeASusing password based option (hereinafter referred as Users).(ii) Virtual keyboard will be made available for Users on IDeAS / SPEED-ewebsites to enter their password at the time of registration, login,reset of password, change of password and during auto-expiry ofpassword.(iii) At present, Users enter their password using a physical keyboard forlogin to IDeAS / SPEED-e websites. Users will now have the choice toenter their password either using the physical keyboard or virtualkeyboard (after enabling the check box - ‘Use Virtual Keyboard’).(iv) Users will be required to enter the entire password (in toto) eitherusing the physical keyboard or virtual keyboard for all the passwordfields provided on the screen.[ 182 ]
The minimum configuration of a PC for accessing IDeAS / SPEED-e websiteshas been revised as follows:Operating System Microsoft Windows 2000, Windows Server 2003, WindowsXP and Windows Vista.BrowserMicrosoft Internet Explorer 6.0 and above.RAM512 MBThe above information about virtual keyboard will also be displayed on IDeAS/ SPEED-e websites. Participants may guide their Clients in this regard.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No.Sub: Withdrawal of User fee for Users of IDeAS facility and reduction in<strong>NSDL</strong>/POLICY/annual fees for SPEED-e facility2009/0025 As all Participants are aware, <strong>NSDL</strong>’s common internet facility called IDeASDate: April 1, 2009 facilitates investors to view latest balances and transactions in their depositoryaccounts. SPEED-e facilitates Users (Beneficial Owners and Clearing Members)to submit delivery instructions on the internet. SPEED-e facilitates Participantsto eliminate paper [Delivery Instruction Slips (DIS)] resulting in reduction incost of storage and processing of DIS and the risk involved in verifying specimensignatures of account holders at the time of processing DIS.<strong>NSDL</strong> is pleased to announce reduction in the fees for IDeAS and SPEED-efacilities with effect from April 1, 2009 as follows:Particulars Existing Fees Revised FeesIDeASUser Fee Rs.10 per quarter NilSPEED-eAdmission Fee Rs. 6,00,000 Rs.2,00,000Annual Fee Rs.1,00,000 for main DPM Rs.25,000 irrespectiveset-up and Rs. 50,000 for of number of DPMevery additional DPMset-upsset-up subject to amaximum of Rs 3,00,000.The revised fee structure and features of IDeAS and SPEED-e facilities areenclosed at Annexure I and Annexure II respectively.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Annexure IFee structure for IDeAS and SPEED-e (for Participants)Type of feeIDeASAdmission fee NIL -Annual Fee Rs.10,000 for first Fees for the ensuing calendar yearDPM set-up and (January to December) will beRs.5,000 for every charged in the monthly billadditional DPM set-up. for December.Fee[ 183 ]
SPEED-eAdmission fee Rs. 2,00,000Payable at the time of joiningSPEED-e facility.Annual Fee Rs. 25,000 irrespective Payable at the time of joiningof number of DPM SPEED-e facility. Fees will beset-ups.charged in advance in the monthlybill of March for the ensuingfinancial year (April to March).Note : If Participants subscribe for SPEED-e facility, no charges are payableby Participants for IDeAS facility.Type of User Facility FeePassword based UserBO (Beneficial Only IDeASOwners)BO Only SPEED-e NILBOE-token* based UserIDeAS and SPEED-eBO Only IDeAS NILOnly SPEED-eIDeAS and SPEED-eRs. 125 per quarterRs. 125 per quarterCM (Clearing Only IDeAS Payable annually by CM to <strong>NSDL</strong>Members) Only SPEED-e Rs. 125 per quarter* Charges for e-token will be Rs.1,000 approx.Annexure IIVarious features and advantages of IDeAS facility are given below:(I) Clients (Beneficial Owners) View the latest balances along with the value based on the previousday closing price* in depository account(s). View transactions that have taken place in depository account(s)during the last 30 days. Download month-wise transaction statement for the previous months(maximum 12 months) bearing <strong>NSDL</strong>’s digital signature, which canbe verified by using a Signature Verification Utility. SEBI has permitted the Participants to discontinue providing physicaltransaction statements to their Clients who subscribe for the IDeASfacility. However, Participants will be required to send a consolidatedtransaction statement, in physical form, for the entire financial yearand the same shall be dispatched before 15th of May every year(Refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0010 dated March 24,2006).*Disclaimer : While care has been exercised by <strong>NSDL</strong> compiling price file, <strong>NSDL</strong> does not warrantcompleteness or accuracy and damages arising out of use of this information. For any specific /latest information, you may contact the respective stock exchange.(II) Clearing Members (CMs)CMs will be able to view and download the latest balances and transactions[ 184 ]
in their pool accounts in respect of settlements for the current pay-indate, previous four and next four pay-in dates. Other features availableon IDeAS for CMs are as follows: View ISIN-wise positions / transactions for a given market type andsettlement number. View Delivery-out instructions which are in ‘overdue’ status, for agiven market type and settlement number. Download transactions in the Pool Account to determine shortagesfor follow-up with Clients. Download ISIN master to keep the back-office system up-to-date.Various features and advantages of SPEED-e facility are given below:(I) Features(a) Clients: Password based Users can submit market instructions in favourof maximum three pre-notified CM Accounts. E-token Users can submit both market as well off-marketinstructions in an interactive as well as batch upload. Submission of instruction(s) to freeze / unfreeze account(s) /ISIN(s) and / or specific quantity of securities under an ISIN.Further, freeze request executed by Clients through SPEED-ecannot be unfrozen by the Participant (applicable for e-tokenbased Users).(b) CMs:CM Users can avail the following features both on interactive as wellas on a batch submission mode: Delivery-out to Clearing Corporation Delivery to Client Inter-Settlement CM Pool to Pool(II) Advantages Check the latest balances in the depository account through IDeASbefore submitting instructions and monitor the status of executionof the same. View status of execution of delivery instructions. Save time and efforts in obtaining delivery instruction slips andsubmitting them to Participant. Freeze depository accounts on SPEED-e. Freeze created throughSPEED-e can be unfrozen only through SPEED-e (applicable fore-token based Users). Convenience for NRI Clients to operate their accounts.Circular No :<strong>NSDL</strong>/POLICY/SPEED-e/2009/0002Date : March 21, 2009Sub : Partial settlement of pay-in instructions executed from Client toCM Pool Account on SPEED-eAll Participants were informed about the feature of partial settlement ofpay-in related account transfer instructions executed from Client to ClearingMember (CM) Pool account vide <strong>NSDL</strong> circular no. <strong>NSDL</strong>/POLICY/2009/0019dated March 14, 2009. The above feature is scheduled to be released onSaturday i.e., March 21, 2009.[ 185 ]
In view of the above, Participants who have subscribed for SPEED-e facilityare informed that subsequent to the release of this feature, Clients whosubmit Client to CM Pool account transfer instructions on SPEED-e will beenabled to view the “Requested Quantity” and “Delivered quantity” in thelink viz., “View Instructions / Delivery to Clearing Member” on SPEED-ewebsite. Further, the status of the Client to CM Pool account transferinstructions having partial balance in the Client account, subsequent toexecution of pay-in, will get updated as “Closed Partially Settled” onSPEED-e website.The above information will be displayed to the SPEED-e Clients on the welcomescreen on SPEED-e log-in. Participants may guide their Clients in this regard.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :<strong>NSDL</strong>/POLICY/SPEED-e/2009/0001Date : March 13, 2009Sub : Facility for Participants to mark holiday(s) on SPEED-eAll Participants are hereby informed about the launch of Holiday Master featureon SPEED-e which will facilitate Participants (subscribed for SPEED-e facility)to mark holiday(s) on SPEED-e. After the Participant has marked holiday(s)on SPEED-e, Clients / Clearing Members (CMs) of the Participant will not beallowed to submit/ authorize instructions on SPEED-e with execution date asthe holiday date. This release is scheduled on March 14, 2009. Salient featuresof this facility are as follows:a) A new function for allocation of rights has been introduced for markingand authorizing a holiday on SPEED-e to the Admin user.b) To avail of this facility of marking/authorizing a holiday, Admin Usermust assign the ‘capture’ and ‘authorization’ rights to differentFunctional Users.c) The capturer and authorizer cannot be the same User.d) Capturer can mark holiday(s) (clicking on link ‘Add DP Holiday’) / cancelthe marked holiday(s) (clicking on link ‘View / Cancel DP Holiday’).The details thus captured shall remain in captured status i.e. pendingfor authorization. While marking the holiday(s) Capturer will be requiredto mention the reason for marking holiday. Care must be taken whilecapturing the reason as the reason of holiday, as captured by theParticipant, will be displayed to Clients/ CMs of that Participant.e) Authorizer will be able to authorize the holiday(s) that are in capturedstatus (clicking on link ‘Authorize Add / Cancel Holiday’). Further, theauthorizer cannot modify the holiday details that are in captured status.f) The holiday(s) must be marked & authorized by Participants well-inadvance i.e. latest by 6.30 pm of one working day prior to the date ofholiday. Example: If Participants wish to mark & authorize Friday, March27, 2009 as a holiday on SPEED-e, Participants must do so latest by6.30 pm on Thursday, March 26, 2009.[ 186 ]
g) Once a holiday is captured and authorized by the Participant, the Clientsof that Participant will be unable to submit or authorize instructions onSPEED-e with execution date as the holiday date. If there are instructionsalready executed by the Clients/ CMs with execution date falling onthe date marked as holiday, Participants can still mark such a day as aholiday as such pending instructions can and should be downloaded andimported into DPM System. At the time of marking a holiday, a messagewill be displayed on the SPEED-e advising users of the Participants tocheck for any pending instructions to be downloaded for the date whichis marked as holiday.h) After 6.45 pm of one day prior to the day which is marked as a holiday,Participants are advised to download all pending instructions fromSPEED-e and in case there are any instructions, upload the same before8.30 pm into the DPM System.i) A link viz., “View / Cancel DP Holiday” will facilitate Participants toview various status of holiday details viz., ‘Captured’, ‘Active’,‘Cancellation Requested’, ‘Cancelled’.j) A link is also provided for Clients / CMs to view the holiday(s) alongwith the reasons, marked by the Participants.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel: (022) 2499 4361 (email: sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel: (022) 2499 4372 (email: rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :Sub : Version Release - Incorporation of FIU details on SPEED-e for smart<strong>NSDL</strong>/POLICY/SPEED-e/ card / e-token Users2008/0007 Further to our Circular No. <strong>NSDL</strong>/POLICY/SPEED-e/2008/0006 dated NovemberDate : December 13, 10, 2008, Participants who have subscribed for SPEED-e facility are requested2008 to note that <strong>NSDL</strong> has scheduled version release on SPEED-e on December 20,2008 to incorporate the fields viz., 'Consideration' and 'Reasons/Purpose' forcapturing the required details under the said fields, at the time of submittingoff-market instructions by smart card / e-token Users.Participants are requested to take note of the following important operatinginstructions with respect to version release:1) Compact Discs (CD) containing new version of the DPM System andinstructions regarding upgradation is being sent to Participants by courierseparately. In addition, the version release software will also be madeavailable on the intranet site of <strong>NSDL</strong> viz., http://sqlassist/SPEED-e/Ver8.11 on December 19, 2008. Participants are requested to installthe software downloaded from the SQLassist or the CD only on December20, 2008. If any problem is encountered in installing the software onDecember 20, 2008, Participants are requested to contact <strong>NSDL</strong> HelpDesk on (022) 2499 4601 to 4610 and obtain a token number for thecall.2) Participants are requested to note that the new file formats as informed[ 187 ]
in our aforesaid circular will be applicable from December 20, 2008onwards. Hence, Participants who are routing their SPEED-e instructionsthrough their back office and thereafter uploading the same into theDPM System are requested to be ready with the latest back office fileformats. Further, smart card / e-token Users who submit off marketinstructions on a batch mode also need to be ready with the latest fileformats for uploading off market instructions on SPEED-e. Participantsare requested to inform their smart card / e-token Users about thedevelopments.3) Participants are advised to download at least one batch of instructionsfrom SPEED-e after 6.30 pm and upload the same into the DPM Systemon December 19, 2008.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :Sub : Revocation of SPEED-e and IDeAS facility by <strong>NSDL</strong> consequent to<strong>NSDL</strong>/POLICY/closure of such Client accounts in the DPM system2008/0065 In continuation of <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2008/0024 dated April 11,Date : September 26, 2008, all Participants are hereby informed that with effect from September2008 26, 2008, <strong>NSDL</strong> shall also revoke the Client IDs of password Users and User IDsof smart card / e-token Users on SPEED-e / IDeAS at regular intervals aftersuch Clients accounts are closed in the DPM System.Other details as informed in <strong>NSDL</strong> Circular Nos. <strong>NSDL</strong>/POLICY/2008/0020 and<strong>NSDL</strong>/POLICY/2008/0024 dated April 4 and 11, 2008 respectively remainunchanged.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Narayan Venkat Tel (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :Sub: Withdrawal of usage fee for password based Users of the SPEED-e<strong>NSDL</strong>/POLICY/facility2008/0046 As all Depository Participants (DPs) are aware, <strong>NSDL</strong> launched its commonDate: June 26, 2008 internet facility called SPEED-e on September 1, 2001, which facilitates Users(Beneficial Owners and Clearing Members) to submit delivery instructions onthe internet. Users have the option of accessing SPEED-e facility either as aPassword User or as a Smart Card / e-Token User.With a view to encourage investors to submit delivery instructionselectronically over internet, <strong>NSDL</strong> is pleased to announce the withdrawal ofusage fee of Rs.25 charged to DPs, every quarter, in respect of Passwordbased Users of the SPEED-e facility, with effect from July 1, 2008.DPs are requested to pass on the benefit to the Password based Users of theSPEED-e facility.[ 188 ]
Circular No :Sub : Revocation of SPEED-e and IDeAS facility consequent to closure of<strong>NSDL</strong>/POLICY/demat accounts2008/0024 Depository Participants (DPs) have represented to <strong>NSDL</strong> that Clients (BeneficialDate : April 11, 2008 Owner) do not submit revocation request to DPs for revoking SPEED-e / IDeASfacility, at the time of closing their demat accounts. In this context, DPs haverequested <strong>NSDL</strong> to allow them to revoke such Client accounts on SPEED-e /IDeAS on receipt of closure request with respect to demat accounts.DPs may unilaterally revoke the Client IDs in case of password Users and UserIDs in case of smart card / e-token Users on SPEED-e / IDeAS as applicable,after carrying out the closure of demat accounts of such Clients. In case ofsmart card / e-token Users, DPs should send the Client details i.e. Client ID,User ID and Signature Revocation Form of such Clients to <strong>NSDL</strong> after carryingout the revocation of User ID. As all DPs are aware, <strong>NSDL</strong> vide its Circular No.<strong>NSDL</strong>/POLICY/2008/0020 dated April 4, 2008 informed DPs about the launchof download of Clients details on SPEED-e / IDeAS, whereby DPs can downloadand view the details of their respective Clients who have subscribed for theservices of SPEED-e and / or IDeAS. This facility will enable the DPs toidentify the accounts in SPEED-e / IDeAS for the purpose of revocation ofaccess.Consequent to account closure, DPs are advised to provide the transactionstatement to such Client for the period from the beginning of the quarter inwhich the account is closed till the date of closure. Further, the transactionstatement should bear the words "Account Closed" and should be prominent.For this purpose, DPs can affix a rubber stamp or create a suitable systemthat will clearly show on the transaction statement that the account hasbeen closed (Refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0014 dated May 11,2006).For further information / clarification, DPs are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Narayan Venkat Tel (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No :Sub: Launch of new feature 'Client List Download' for DP on SPEED-e and<strong>NSDL</strong>/POLICY/IDeAS2008/0020 As all Participants are aware, <strong>NSDL</strong> has provided a common internet facilityDate: April 04, 2008 called SPEED-e and a facility called IDeAS (Internet-based Demat AccountStatement) to view balances and transactions in demat accounts updated onan online but not real time basis. DPs were advised to maintain the list ofclients who have subscribed for these facilities manually in a register. DPshave been representing to <strong>NSDL</strong> for a utility that will provide the list ofclients who have subscribed for SPEED-e or/and IDeAS facility.<strong>NSDL</strong> is now pleased to announce the launch of 'Client List Download' onSPEED-e and IDeAS. This facility is expected to be released on April 4, 2008.In this feature, a new link "Download Client List" under the option "Inquiries"would be provided to DP Administrator and DP Functional Users. DPs candownload a digitally signed file containing the details of the clients who havesubscribed for SPEED-e or/and IDeAS in a TCL file. DPs can verify the digitalsignature of <strong>NSDL</strong> using a Signature Verification Utility. Detailed procedureregarding installation of Signature Verification Utility is already available toview and download on SPEED-e site.[ 189 ]
DPs who have subscribed to SPEED-e facility will get the list of clients whohave subscribed for SPEED-e or/and IDeAS facility & list of Clearing Memberswho have subscribed for SPEED-e facility. DPs who have subscribed forIDeAS facility will get the list of clients who have subscribed for only IDeASfacility.The downloaded file will provide the following details.Sr No Column Remarks1 DP ID The DP ID of the DP user doing the download2 USER ID downloading The USER ID of the DP user doing thethe filedownload3 No of records Will display total number of recordsgenerated in the downloaded file4 Downloaded file date & The date will be displayed in thetimestampfollowing format (YYYYMMDDHHMMSS)5 Registration Number Registration No. will be displayed only incase of a Password based user6 Client Activation Date User Activation Date will be displayed incase of a password based user. Incase ofSmart Card based users, the Clientregistration date will be displayed7 Client ID / CM BP ID In case the client is a CM then Client Id aswell as CM BP ID will be shown in the file.In case the client is an investor then onlyClient Id will be shown.8 Status This field can be Active/Suspended Theuser present in any other status will notbe included in the file.9 Service This field will denote whether the clientis using either SPEED-e or IDeAS or Both.It would display SPEED-e or IDeAS orSPEED-e & IDeAS in the file depending onthe facility subscribed.10 User Type This field will denote whether the clientis smart card based or password based. Ifthe client is password based then thefield will be displayed as Password and ifthe client is smart card based then SmartCard will be displayed.The downloaded file will contain the list of clients that are in Active/Suspendedstatus at the time of download by the DP user in the SPEED-e system.Circular No :Sub: SPEED-e Operations Manual for DPs<strong>NSDL</strong>/POLICY/<strong>NSDL</strong> is pleased to inform the Depository Participants (DPs) that the SPEED-e2008/0003 Operations Manual for DPs is now available for download on SQLASSIST IntranetDate: April 03, 2008 site of <strong>NSDL</strong> (//sqlassist/SPEED-e Operations Manual). This operations manualis also available for download to DP Users (i.e. Admin and Functional User) on<strong>NSDL</strong> SPEED-e Website (https://speed-e.nsdl.com).[ 190 ]
Circular No :Sub : Extension in Deadline for Submission of Instructions on SPEED-e<strong>NSDL</strong>/POLICY/As all Participants are aware, <strong>NSDL</strong> launched its common internet facilitySPEED-e/2008/0001 called SPEED-e on September 1, 2001. At present, SPEED-e allows the ClientsDate : January 3, 2008 to submit instructions with current date as the execution date only upto 6:00p.m. IST (3:00 p.m. on Saturdays). Participants have requested <strong>NSDL</strong> to extendthe deadline for submission of instructions on SPEED-e for their clients onweekdays.In this regard, <strong>NSDL</strong> is pleased to announce the following changes onSPEED-e with effect from January 7, 2008:• Instructions with current date as the execution date can be executedon SPEED-e by the client upto 6:30 p.m. IST (earlier 6:00 p.m. IST).However, instructions with future date as the execution date can beexecuted at any time, even after 6.30 p.m. IST.Further, there is no change in the deadline for submission of instructions withcurrent date as the execution date on SPEED-e by the client on Saturdayswhich is 3:00 p.m. IST.Participants must ensure that all the instructions received from the clientswithin the aforesaid deadlines are duly executed in the DPM System and incase Participants encounter any difficulty in downloading the instructionsfrom SPEED-e, the same should be reported to Help Desk immediately. Incase of emergency, <strong>NSDL</strong> will download the file and give it to the Participants.Participants are requested to take note of the above and inform all theSPEED-e Users accordingly.Auto Cancellation of Unconfirmed Pledge/Hypothecation/SLB Orders due to Auto Corporate ActionsCircular No : In continuation of Circular No. <strong>NSDL</strong>/PI/2001/1559 dated October 12, 2001<strong>NSDL</strong>/PI/2001/1566 regarding automatic cancellation of unconfirmed Pledge / Hypothecation /Date : October 13, SLB orders, Participants are further advised that while re-executing the2001 cancelled orders, proportionate quantity credited under the new ISINs uponconversion should be entered in respect of each cancelled order. Participantscan refer to the Auto Corporate Action Details inquiry screen in the DPM forobtaining the details of ACAs viz; Instruction No., Type, Execution Date, DebitISIN, Credit ISIN, Conversion Ratio and statusCircular No :All Participants are hereby informed about the effect on unconfirmed Pledge<strong>NSDL</strong>/PI/2001/1559 / Hypothecation / SLB orders subsequent to release of DPM ApplicationDate : October 12, software Version 3.1. All unconfirmed pledge / hypothecation creation, pledge2001 /hypothecation closure, hypothecation invocation, lend initiation, borrowinitiation, recall initiation and repay initiation requests for those ISINs forwhich Auto Corporate Actions have been executed so far will get automaticallycancelled and securities will get transferred to the new ISINs on Monday,October 15, 2001. The cancelled Pledge / Hypothecation / SLB orders will bereflected in the changed orders for the day (COD) Export. Participants shouldre-execute such cancelled Pledge /Hypothecation / SLB orders immediately.Henceforth, whenever an Auto Corporate Action (ACA) is executed, allunconfirmed Pledge / Hypothecation / SLB orders will get cancelledautomatically and securities will be transferred to the new ISINs on theexecution date of ACA and Participants will have to re-execute those orders.Fresh instruction forms will not be required to be obtained from the clientsfor re-execution of the automatically cancelled Pledge/ Hypothecation / SLBorders on account of ACA.[ 191 ]
Auto Corporate Action for redemptionCircular No :<strong>NSDL</strong>/PI/2002/0763Date: May 14, 2002As a part of software version 3.2, a facility has been introduced wherebysecurities can be redeemed by the Issuers through its R&T Agents, by executingan Automatic Corporate Action (ACA). In this regard, Participants are advisedto note the following:1. The details of ACA can be viewed in the main menu of the DPM systemunder "Inquiries" screen by selecting the option Corporate Action\AutoCorporate Action Allotment.2. The implications of ACA for various types of instructions are as under:Sr. Type of Instruction Effect of ACA onNo.the Execution Date1 Free balances under ACA executedBeneficiary Accounts,CM Pool Accounts andIntermediary Pool Accounts.2 Pending demat requests The requests are cancelled3. Pending remat / The requests are cancelledrepurchase requestsand ACA executed4. Unconfirmed Pledge. The instructions areHypothecation /cancelled and ACASLB instructionsexecuted5. Securities Pledged/ ACA not executed.HypothecatedUpon closure or invocationof the pledge/hypothecation,ACA is executed on the BODof the next day of suchclosure /invocation.6. Locked-in securities ACA not executed. Whensecurities become free,ACA is executed on theBOD of the next day whensecurities become free.7. Balances which are frozen ACA not executed. Whenfreeze is removed, ACA isexecuted on the BOD onthe next day of removal ofthe freeze.8. Balances under the CM ACA not executed.Delivery accountsOn the BOD of the nextday when securities aremoved to CM Pool accounton pay-out or cancellation ofdelivery out instructions,ACA executed.3. No fresh Dematerialisation/ rematerialisation/ repurchase requests canbe initiated before 21 days of the redemption date.[ 192 ]
4. No instructions can be initiated with execution date greater than theredemption date.5. Redemption by way of ACA is not applicable in case of CommercialPapers and Equity Shares.Stipulated time for transfer of securities from CM Pool Account & PenaltyCircular No :Attention of Participants is invited to SEBI Circular No. SEBI/MRD/Policy/AT/<strong>NSDL</strong>/PI/2004/0721 Cir-19/2004 dated April 21, 2004, which states as follows:Date: April 22, 2004 "SEBI vide circular no. SMDRP/Policy/Cir-05/2001 dated February 01, 2001,had stipulated a time limit of 4 calendar days or 2 working days, whichever islater, for transferring the securities from the member's pool account to thebeneficiary accounts of clients. Also, SEBI vide circular No. SMD/Policy/Cir-6/2003 dated February 6, 2003 has stipulated the brokers to distribute thepay-out of securities and funds within 24 hours to their clients. Hence, witha view to harmonize the time limit for the pay-out from the pool account ofthe member to the client account, it is now clarified that, in partialmodification of SEBI circular no. SMDRP/Policy/Cir-05/2001 dated February01, 2001, the stock brokers/clearing members shall be required to transferthe securities from their respective CM Pool account to the respectivebeneficiary account of their clients within 1 working day after the pay-outday. The securities lying in the pool account beyond the stipulated 1 dayshall attract a penalty at the rate of 6 basis point per week on the value ofsecurities."Participants are requested to note that this will be effective from May 1,2004.❑ ❑ ❑[ 193 ]
NOTES[ 194 ]
4. TransmissionBye Law 9.10.1Bye Law 9.10.2.1.Bye Law 9.11.1Rule 12.6.1<strong>NSDL</strong> shall effect the transmission of security balances of any Client due todeath, lunacy, bankruptcy, insolvency or by any other lawful means otherthan transfer.In cases where the deceased is the Karta of a Hindu Undivided Family ("HUF")holding securities in such capacity, the surviving member(s) of the HUF maynotify to <strong>NSDL</strong> the eldest surviving member of the HUF as the Karta of theHUF in accordance with law, and subject to production of such evidence andexecution of such documents as may be prescribed in the Business Rules, thename of such newly designated Karta shall be entered in the records of <strong>NSDL</strong>as having title to the securities held in the beneficial owner account held bythe deceased Karta.Provided however that such facility shall be permitted by <strong>NSDL</strong> only if thegross value of the securities lying to the credit of such beneficial accountdoes not exceed such limit as may be prescribed by <strong>NSDL</strong> in its Business Rulesfrom time to time. In all other cases, no change of name of account holdershall be permitted unless supported by a succession certificate and such otherrequirements as may be prescribed in accordance with law."In respect of every account, the Beneficial Owner(s) (in Nominating Person(s))may nominate any person (Nominee) to whom his securities shall vest in theevent of his death in the manner prescribed under the Business Rules fromtime to time.Transmission of Securities held jointly in the Depository12.6.1.1. In case of death of one of the Clients in a joint account, thesurviving Client(s) shall request the Participant to transmit thebalances lying in the Client account to the account of thesurviving Client(s). The surviving Client(s) shall make anapplication to the Participant in the form specified in AnnexureO alongwith a copy of the death certificate duly attested by aNotary Public or by a Gazetted Officer.12.6.1.2. The Participant shall verify the death certificate and thesignature of the surviving Client(s) before effecting thetransmission.12.6.1.3. In case of death of one or more of the Clients in a joint accountif the surviving client(s) wish to open a new account with thesame Participant, then the Participant will open the newaccount in the name(s) of the surviving member(s), in the sameorder as in the original account, on the basis of the existingdocuments already in the possession of the Participant,provided that the said documents meet the prevailingrequirements for opening an account.Further, the Annexure 'O' (copy enclosed) pertaining toTransmission Request Form (TRF) has been amended and variousformats used alongwith TRF have been restructured andinserted as Annexures of Business Rules as below:[ 195 ]
Rule 12.6.2(i) Annexure 'OC' - Format for Letter of Indemnity to be givenby legal heir(s)/Legal representative(s) in case value ofholding not exceeding Rs.1 lakh on the date of application(copy enclosed).(ii) Annexure 'OD' - Format for Affidavit to be given by legalheir(s)/Legal representative(s) in case value of holdingnot exceeding Rs.1 lakh on the date of application (copyenclosed).(iii) Annexure 'OE' - Format for No Objection Certificate to begiven by legal heir(s)/Legal representative(s) in case valueof holding not exceeding Rs.1 lakh on the date ofapplication (copy enclosed).(iv) Annexure 'OF' - Format for Deed of Indemnity to besubmitted by surviving member(s) of HUF in case value ofholding not exceeding Rs.10 lakh on the date of application(copy enclosed).(v) Annexure 'OG' - Format for Affidavit to be submitted bysurviving member(s) of HUF in case value of holding notexceeding Rs. 10 lakh on the date of application (copyenclosed).12.6.1.4. After effecting the transmission, the Participant shall closethe account of the deceased.Transmission of Securities held singly in the Depository12.6.2.1. In case of death of the sole Client, the legal heir(s) or legalrepresentative(s) of the deceased shall request the Participantto transmit the balances lying in the Client account of thedeceased to the account of the legal heir(s) or legalRepresentative(s).12.6.2.2. The legal heir (s) or the legal representative(s) of such securitiesshall make an application to the Participant in the formspecified in Annexure O alongwith the following documents:-i) A copy of the death certificate duly attested by a NotaryPublic or by a Gazetted Officer.ii) A copy of the Succession certificate duly attested by aNotary Public or by a Gazetted Officer or an order of acourt of competent jurisdiction where the deceased hasnot left a Will; oriii) A copy of the Probate or Letter of Administration dulyattested by a Notary Public or by a Gazetted Officer.12.6.2.3. However, if the legal heir(s) or the legal representative(s)express inability to produce either of the documents mentionedunder (ii) and (iii) of 12.6.2.2, and the market value of thesecurities held in each of the account of the deceased as onthe date of application for transmission does not exceedRs.1,00,000 then the Participant shall process the transmissionrequest on the basis of the following documents:[ 196 ]
Rule 12.6.3i) Request for transmission in Annexure O;ii) Copy of the death certificate duly attested by a NotaryPublic or by a Gazetted Officer;iii) Letter of Indemnity made on appropriate non judicialstamp paper;iv) An Affidavit made on appropriate non judicial stamppaper; andv) No Objection Certificate(s) from all the legal heir(s) whodo not object to such transmission.vi) As an alternate to No Objection Certificate from all legalheir(s) who do not object to such transmission specifiedat 12.6.2.3 (v), a copy of Family Settlement Deed dulyattested by a Notary Public or by a Gazetted Officerprovided that the Family Settlement Deed clearly vestthe securities in favour of the person seeking transmissionin his/her name and vesting of securities in his/her nameis not contingent upon any other onerous conditions insuch Family Settlement Deed.Provided further that if the division of securities as perthe Family Settlement Deed is amongst more than oneperson, then Family Settlement Deed can be consideredas an agreement amongst the legal heirs for transmissionof securities to each legal heir applying for transmission.12.6.2.4. The Participant shall ensure that the documents submitted bythe legal heir(s) or the legal representative(s) are in order andshall then effect a transfer of the balances to the Client accountof the legal heir(s) or the legal representative(s).12.6.2.5. After effecting the transmission, the Participant shall closethe account of the deceased.Transmission of Securities in case of Nomination12.6.3.1. The Client(s) may make a nomination of his/their account infavour of any person by filing with the relevant Participant theform laid out in Annexure JA of these Business Rules. In thecase of joint accounts, all the Clients shall be required to affixtheir signatures to the said form. Such nomination shall beconclusive evidence of the Client(s) disposition in respect ofall the securities in the account for which nomination has beenmade.12.6.3.2. A nomination once made shall not be considered to have beenvaried, substituted or canceled, unless the Client(s) filesanother form as laid out in Annexure JA with the Participant,expressly signifying the interest to vary, substitute or cancelall nominations made earlier. Unless a fresh variation,substitution or cancellation is registered with the Participant,the Depository shall consider the nomination last validlyrecorded in its books as being conclusive evidence of theClient(s) disposition in respect of the securities.[ 197 ]
12.6.3.3. A nomination, substitution shall be valid only if :-a) it is submitted to the Participant by the rightful Client(s)or under his/their due authority.b) it is in prescribed form (Annexure J/JA)c) it is duly signed by Client(s)d) it is properly signed and witnessede) signature of the Client(s) tally with the specimen signaturerecordsf) the details of the securities entered in the nominationforms match those in the records of the Participantg) the photograph of the Nominee is annexed to thenomination formh) the Nominee has signed the nomination form and guardianin case of the nominee being a minor12.6.3.4. If the form is valid in all respects and accepted by theParticipant, the Participant shall register the nomination bygenerating a “Nomination Registration Number” (“NRN”), enterthe same in the DPM (DP) and confirm the same to the Client(s)in writing.12.6.3.5. In the event of a substitution/ cancellation of a nomination afresh NRN or a written certification of cancellation, as thecase may be, shall be generated by the Participant and givento the Client(s) and the DPM (DP) shall be updated.12.6.3.6. The Participant shall at all times, irrespective of subsequentvariations and cancellations, maintain an updated "Register ofNominations" which shall contain the following information :-a) Serial numberb) Date of Registrationc) Nomination Registration Numberd) Certificate of Cancellation of nominatione) Account number of the Client(s)f) Name(s) of the Client(s)g) Address of the Client(s)h) Name of nomineei) Address of nomineej) Schedule date of attaining majority (if the Nominee is aminor)k) All details of variation/ cancellation of nomination withrespective datesl) Remarks and observations of the Participant, if anym) In case the nominee is a minor, the DP shall ensure that afresh photograph and the signatures of the nominee areobtained once in every five years.[ 198 ]
Rule 12.6.412.6.3.7. The Participant shall ensure that such register is maintainedproperly and is verified periodically. All the nominationsreceived should be bound and preserved for record purposes.These records shall form part of the records of the Participant.12.6.3.8. Upon the death of the sole Client or the death of all the Clients,as the case may be, the nominee shall request the Participantin writing alongwith a certified true copy of the deathcertificate (or a duplicate copy of the death certificate iforiginal lost or misplaced) issued by the competent authorityto transmit the securities covered by the nomination to theaccount of the Nominee, held with any Depository. If theNominee does not have an account with the Depository, theNominee shall be required to open an account with anyDepository12.6.3.9. The provisions relating to Annexure "O" shall apply mutatismutandis to the process of transmission of securities to theNominee.12.6.3.10. Before executing any request made under any of the forms inrespect of nomination, the Participant shall ensure thecompleteness of the form and validity of the signature of theClient(s).12.6.3.11. The details of various nominations made by the Client(s) shallform an integral part of the records of the Participant,Depository and the Issuer or its Registrar and Transfer Agentunder Chapter 16 of these Business Rules and shall be Reconciledin accordance with Chapter 15 of these Business Rules.Transmission of Securities held by Karta of Hindu Undivided Family (HUF)in the Depository12.6.4.1. Upon death of the Karta of a Hindu Undivided Family (HUF),the surviving member(s) of the HUF may appoint the eldestsurviving member of the HUF as the new Karta of the HUF.(A) For transmission of securities to the account of the newKarta from the account of the deceased Karta, thesurviving members through the new Karta shall make ajoint application to the Participant in the Form specifiedin Annexure "O" along with the following documents:i. True Copy of the death certificate of the Karta, dulyattested by a Notary Public or by a Gazetted Officer;ii.An appropriate order by a competent court, Providedhowever that, if the surviving members or the NewKarta express their inability to produce the order ofa competent Court, and that the market value ofsecurities lying to the credit of such account as onthe date of application for transmission of securitiesdoes not exceed Rupees Ten Lakh then theParticipant shall process the transmission requeston the basis of the following documents:[ 199 ]
Rule 12.6.5a) Request for transmission in Annexure "O", dulysigned by the New Karta;b) A declaration of the list of surviving membersof HUF in an affidavit in the prescribed form(Annexure "O"), duly notarised;c) Letter of Indemnity in the prescribed form(Annexure "O") from the surviving members.(B) Where there is an objection from any member of the HUF,transmission of securities held in the beneficial owneraccount should be effected only on the basis of a Decreeby a competent Court or the Deed of Partition."12.6.4.2. The surviving members shall furnish to the Participant thecertified copy of the Settlement Deed/ Deed of Partition /Decree of the relevant Court, duly stamped in case the HUFgoes into separation/ partition for dealing with the securitieslying in the beneficial owner account held by the deceasedKarta, and furnish to the Participant the details of the beneficialowner accounts of the individual members in order to havethe securities distributed to their respective accounts.12.6.4.3. The Participant shall ensure that the documents submitted bythe surviving members or the new Karta are in order and shallthen effect a transfer of the balances to the client account ofthe new Karta.12.6.4.4. After effecting the transmission, the Participant shall closethe account held in the name of the deceased Karta.The Participant shall effect the request for transmission of securities withinseven days of receipt of complete set of requisite documents.Transmission of securities in case of nominationCircular No.Sub : Amendment to Business Rules<strong>NSDL</strong>/POLICY/All Participants are hereby notified about the amendments to Business Rules,2009/0078 as given below:Date: September 1, Transmission of securities in case of nomination2009 In case of transmission of securities with nomination, the requirement tosubmit “Affidavit” and “Verification” forming part of “Annexure O” to BusinessRules have been deleted. Thus, in case of transmission of securities withnomination, a request for transmission in “Annexure O” alongwith a certifiedtrue copy of the death certificate (or a duplicate copy of death certificate iforiginal is lost or misplaced) would be sufficient.RBI Clarification on Transmission of Government SecuritiesCircular No.Sub : RBI Clarification on Transmission of Government Securities<strong>NSDL</strong>/POLICY/All Participants are hereby informed that pursuant to enactment of the2009/0021 Government Securities Act, 2006, Reserve Bank of India has clarified that forDate: March 19, 2009 recognition of title to Government Security of the deceased sole holder orjoint holders, where there is no nomination in force, no limit is prescribedfor the value of the securities in the provisions of Government Securities Act,2006 read with the provisions of Regulation 6 of the Government Securities[ 200 ]
Regulations, 2007. In view of the aforesaid, the procedure for transmission ofsecurities under Rule 12.6.2.3 and proviso to 12.6.4.1 (A) (ii) of BusinessRules of <strong>NSDL</strong> shall not apply to Government Securities.Participants are advised to take note of the same for transmission ofGovernment Securities of value less than Rs.1 lac (Rs.10 lac for HUF) andfollow provisions of Rule 12.6.1, Rule 12.6.2 & 12.6.3 [except Rule 12.6.2.3]and 12.6.4 [except proviso to 12.6.4.1 (A) (ii)].Capturing of PAN details in the DPMAS in case of transmissionCircular No. <strong>NSDL</strong>/POLICY/2007/0006Date: January 23, 2007Sub : Transmission in depository account-Capturing description in thePAN field of the deceasedAttention of Depository Participants (DPs) is invited to Circular No. <strong>NSDL</strong>/POLICY/2007/0005 dated January 18, 2007 wherein DPs were informed aboutthe process to be followed when a request for transmission of securities isreceived in case of death of Client(s) holding a depository account and suchaccount is frozen (Suspended for Debit) due to non-compliance of PANrequirements.As explained in the above circular, DPs are required to obtain PAN details oflegal heir(s)/legal representative(s)/nominee in case of death of the soleholder/death of all holders. Where the deceased was a joint holder, DPs arerequired to capture the PAN details of the surviving holder(s) in the DPMApplication Software (DPMAS).In addition to above, DPs are requested to take the following steps inDPMAS:1. Capture the description "TRANSMISIN" in the PAN field of thedeceased.2. Do not enable the PAN flag appearing against the name of thedeceased in the existing depository account.3. Enable the PAN flag only against the names of the surviving holder(s)after updation of the concerned PAN field(s).Thereafter, as explained in the aforesaid circular, DPs are advised to followthe procedure for unfreezing of the depository account, transferring ofsecurities and submitting requests for waiver fees in respect of such depositoryaccounts.Circular No.Sub : Clarification-Obtaining/Capturing of PAN details in the DPMAS in<strong>NSDL</strong>/POLICY/case of transmission in depository account2007/0005 Depository Participants (DPs) have been seeking clarification regardingDate: January 18, 2007 capturing of PAN details when a request for transmission of securities isreceived in case of death of Client(s) holding a depository account and suchaccount is frozen (Suspended for Debit) due to non-compliance of PANrequirements.In this regard, it is hereby clarified that DPs should:1. Capture the PAN details of the surviving holder(s) in the DPM ApplicationSoftware (DPMAS), in case the deceased was a joint holder;2. Obtain the PAN details of the legal heir(s) or legal representative(s) ofthe deceased, in case the deceased was the sole holder of the depositoryaccount;[ 201 ]
3. Obtain the PAN details of the nominee in case of death of the soleholder or death of all the holders, where nomination had been made inrespect of such depository account.Thereafter, DPs are required to follow the procedure given hereunder:A) Unfreeze the Client account in the below given sequence (Refer CircularNo. <strong>NSDL</strong>/POLICY/2006/0068 dated December 29, 2006):(i) Verify the PAN details as per the procedure laid down in CircularNo. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006 with respectto PAN details to be obtained / captured in the DPMAS.(ii) Update the PAN field and enable the PAN flag provided in theDPMAS in respect of the existing depository account. Ensure thatthe status of the updation is 'Closed,Settled'. (applicable onlywhere transmission request is received from the surviving Client(s)as mentioned in point no. (1) above.)(iii) Remove the suspension by initiating unfreeze instruction andensure that the status of the unfreeze instruction is 'Closed,Settled'prior to executing any other instruction in the DPMAS.B) Follow the procedure mentioned for account transfer in case oftransmission as given in Rule 12.6 of Business Rules of <strong>NSDL</strong> under thefollowing:Rule 12.6.1Rule 12.6.2Rule 12.6.3Transmission - Processing pending casesTransmission of securities held jointly in the depositoryTransmission of securities held singly in the depositoryTransmission of securities in case of nominationC) For submitting requests for waiver of fees to <strong>NSDL</strong>, DPs are requestedto follow the procedure mentioned in Circular No. <strong>NSDL</strong>/PI/2003/2103dated December 29, 2003.Circular No.Further to our Circular No. <strong>NSDL</strong>/PI/2000/1983 dated October 25, 2000, all<strong>NSDL</strong>/PI/2000/2034 Participants are hereby advised that the pending transmission cases arisingDate : November 3, out of nomination in respect of beneficial owner's account(s) where a valid2000 nomination exists, can be processed and disposed of under the provisions ofamended Bye Law 9.11 and Business Rule 12.6.3 of <strong>NSDL</strong>. The Participantsshould satisfy themselves about the identity of the nominee. Further, theParticipants should ensure that in respect of existing accounts wherenominations have been obtained, Annexure JA duly filled in by all the accountholder(s) is obtained immediately.Transmission cum Demat - Removal of time limitCircular No.<strong>NSDL</strong>/PI/2001/0899Date : June 25,2001Attention of the Participants is invited to our Circular No. <strong>NSDL</strong>/PI/99/58dated January 22, 1999 regarding the procedure for processing the requestsfor transmission alongwith the dematerialisation of securities in case of jointholdings. In this context, all Participants are hereby informed that suchrequests can be accepted even after two years from the date of the death ofthe deceased.[ 202 ]❑ ❑ ❑
NOTES[ 203 ]
NOTES[ 204 ]
5. Provision of transaction statementRegulation 43Bye Law 6.4.4Circular No.<strong>NSDL</strong>/PI/2003/0671Date : April 23, 2003Bye Law 7.4.1Clause 6 of DP-Client AgreementCircular No.<strong>NSDL</strong>/PI/2003/0671Date : April 23, 2003Rule 14.3.1Circular No.<strong>NSDL</strong>/PI/2003/0671Date : April 23,2003Every participant shall provide statements of account to the Beneficial Ownerin such form and in such manner and at such time as provided in the agreementwith the beneficial owner.'Every Participant shall provide a transaction statement including statementof accounts, if any, to the Clients in such form as specified under the BusinessRules. Such a statement shall be furnished to the Clients at monthly intervals,unless the Participant and its Clients have agreed otherwise. However, ifthere is no transaction in the account, then the Participant shall provide suchstatement to the Client atleast once a quarter. Provided that in case of aParticipant who has not entered into an agreement as per Annexure B of thisBye Laws with its Client in terms of the proviso to Bye Law 6.4.2, then theParticipant shall provide the transaction statement including statement ofaccounts, if any, to the Client as agreed between the Participant and theClient.'The aforesaid amendments come into effect immediately and should beincorporated in the agreements to be executed with new Clients. However,in case of existing Clients, Participants are advised to intimate them aboutthe aforesaid amendments and implement the same w.e.f. June 1, 2003.In case of a dispute between a Client and a Participant with whom the Clienthad maintained his account, and the Participants unwillingness to givetransaction statement to the Client, the Depository shall provide or cause toprovide, through the Participant, such details about daily transactions asmight be required by the Client.'The Depository Participant undertakes to provide a transaction statementincluding statement of accounts, if any, to the Client at monthly intervalsunless the Depository Participant and the Client have agreed for provisionof such statements at shorter intervals. However, if there is no transactionin the account, then the Depository Participant shall provide such statementto the Client atleast once a quarter'The aforesaid amendments come into effect immediately and should beincorporated in the agreements to be executed with new Clients. However,in case of existing Clients, Participants are advised to intimate them aboutthe aforesaid amendments and implement the same w.e.f. June 1, 2003.'The Participant shall furnish a transaction statement including statementof accounts, if any, to every Client, who has opened an account with it,giving the details of the security-wise balances in the accounts of theClients. Such a statement shall be furnished to the Clients at monthly intervalsunless the Client and the Participant have agreed for provision of suchstatements at shorter intervals. However, if there is no transaction in theaccount, then the Participant shall provide such statement to the Client atleastonce a quarter. A specimen of the transaction statement is given in AnnexureV.'The aforesaid amendments come into effect immediately and should beincorporated in the agreements to be executed with new Clients. However,in case of existing Clients, Participants are advised to intimate them aboutthe aforesaid amendments and implement the same w.e.f. June 1, 2003.[ 205 ]
Transaction Statements to clients through Internet (Web-based or Email)Circular No.Sub: Providing Transaction Statements to Clients by email or on website<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, <strong>NSDL</strong> had vide Circular nos.2008/0036 <strong>NSDL</strong>/PI/98/477 and <strong>NSDL</strong>/PI/2002/0398 dated September 22, 1998 and MarchDate: May 21, 2008 7, 2002 respectively clarified that DPs can provide transaction statementsto their Clients by email or on website provided an agreement is executedwith the Client. DPs have been requesting <strong>NSDL</strong> to permit providing of suchtransaction statements to their Clients by email or on website on terms andconditions to be signed by the Clients in this regard.In view of the above, DPs may provide transaction statements by email and/or on website by entering into a legally enforceable arrangement with theClient subject to the following:A. General1. This facility can be provided only on receipt of a written requestfrom Client(s) duly signed (by all account holders in case of jointaccount) clearly stating their intention to receive transactionstatements either by email or on website or both.2. The terms and conditions to be signed by the Client(s) (by allaccount holders in case of joint account) shall include the followingclauses:(a) The Client(s) is/are aware that it will not receive thetransaction statements in paper form.(b) The Client(s) will take all the necessary steps to ensureconfidentiality and secrecy of the login name and passwordof the internet/email account.(c) The Client(s) is/are aware that the transaction statementmay be accessed by other entities in case theconfidentiality/secrecy of the login name and password iscompromised.(d) In case transaction statements are sent by email, theClient(s) shall immediately inform the DP about change inemail address, if any.(e) DPs and Client(s) shall have the right to terminate suchservice provided a written notice is given atleast 10 days inadvance to the other party.3. The signature(s) of the Client(s) on the terms and conditions mustbe verified by a DP official and such official shall sign to theeffect that the same is/are verified.4. In case, the DP is not able to provide transaction statement to itsClients by email or on website due to any reason (includingbounced emails), the DP should ensure that the transactionstatement is provided to the Client in paper form as per the timeschedule stipulated in the Bye Laws & Business Rules of <strong>NSDL</strong>.5. If the Client(s) is/are desirous of receiving transaction statementsin paper form, DPs shall be duty bound to provide the same.[ 206 ]
Circular No. <strong>NSDL</strong>/<strong>NSDL</strong>/PI/2002/0398Date : March 7, 2002B. Email1. The transaction statements should be digitally signed inaccordance with the Information Technology Act, 2000.2. The transaction statements should be password protected.C. Website1. DPs must implement Secure Socket Layer (SSL) security for theirInternet facility featuring site authentication, encryptedcommunication and appropriate client authentication so as torestrict the access of transaction statements only to the Client.The transaction statements made available on website should bedigitally signed in accordance with the Information TechnologyAct, 2000.2. DPs will be required to send a consolidated transaction statementin paper form or in electronic form (email) for the entire financialyear and the same shall be dispatched before 15th May of everyyear.3. The transaction statements should be made available on thewebsite for a period of atleast 12 months.For further information / clarification, DPs are requested to contact Mr. KaushalShah / Ms. Prajakta Sadekar on Tel. No. (022) 24994214 / 4483 (email:kaushals@nsdl.co.in / prajaktas@nsdl.co.in).Participants were advised about the procedure for providing TransactionStatements on internet vide our Circular No. <strong>NSDL</strong>/PI/98/477 datedSeptember 22, 1998. We have been receiving requests from some Participantsto allow them to provide Transaction Statements through email as well.Participants may provide Transaction Statements to their Clients throughInternet (web-based/email), provided an agreement has been executed withthe Client as per the enclosed Annexure. Participant must implement SecureSocket Layer (SSL) security for their Internet facility featuring siteauthentication and encrypted communication.AnnexureAgreement between the Participant and the Client for providing theTransaction Statement through InternetThis agreement made and entered into thisday ofbetweensituated at(hereinafter called "the Client") andsituated at(hereinaftercalled "the Participant").WitnessethWHEREAS the Client has permitted the Participant to provide the transactionstatement through internet (web-based and/or email).[ 207 ]
NOW THEREFORE in consideration of the Participant having agreed to providethe transaction statement through internet (web-based and/or email), boththe parties to the agreement hereby covenant and agree as follows :i. The Participant shall install adequate systems to restrict the access ofthe transaction statement only to the Client.ii. The Client shall take all the necessary steps to ensure confidentialityand secrecy of the login name and password.iii. The Client is aware that the transaction statement may be accessed byother entities in case the confidentiality /secrecy of the login nameand password is compromised.iv. In case the Client opts for transaction statement through email, it shallimmediately inform the Participant about change in email address, ifany. The Participant shall verify and confirm with the Client about thechange. Further, the Participant shall confirm with the Client aboutvalidity of the email address atleast once in a year.v. The Client agrees not to receive Transaction Statement in paper formfrom the Participant. Provided however that, in case when theParticipant is not able to provide Transaction Statement to its Clientsthrough internet (web-based / email) due to any unforeseen problems,the Participant should ensure that the Transaction Statement reachesto the Client in physical form as per the time schedule stipulated in theBye Laws & Business Rules of <strong>NSDL</strong>.vi. The Participant and the Client shall have the right to terminate thisagreement after giving a notice of atleast 10 days to the other party.vii.The above terms and conditions are in addition to and not incontravention of the terms and conditions forming a part of the"AGREEMENT BETWEEN THE PARTICIPANT AND THE PERSON SEEKING TOOPEN AN ACCOUNT WITH THE PARTICIPANT" signed by the Client at thetime of opening the account with the Depository.IN WITNESS WHEREOF the Participant and the Client has caused these presentsto be executed as of the day and year first above written.Signed and delivered by(for and on behalf of the Client)(Witness)Signed and delivered by(for and on behalf of the Depository Participant) (Witness)Transaction Statements - Provisions through InternetCircular No.We have been receiving requests from Participants to allow providing of<strong>NSDL</strong>/PI/98/477 transaction statements through Internet.Date: September 22, Participants are requested to note that in case they desire to provide this1998 service to their clients, they may do so provided an agreement is executedwith the clients as per the format enclosed.[ 208 ]
AnnexureAgreement between the Depository Participant and the client for providingthe Transaction Statement through InternetThis agreement made and entered into thisday ofbetweensituated at(hereinafter called "the Client") andsituated at(hereinafter called "the Depository Participant").WitnessethWHEREAS the Client has permitted the Depository Participant to provide thetransaction statement through internet.NOW THEREFORE in consideration of the Depository Participant having agreedto provide the transaction statement through internet, both the parties tothe agreement hereby covenant and agree as follows:i. The Depository Participant shall install adequate systems to restrictthe access of the transaction statement only to the Client.ii.iii.iv.The Client shall take all the necessary steps to ensure confidentialityand secrecy of the log-in name and password.The Client is aware that the transaction statement may be accessed byother entities in case the confidentiality/ secrecy of the login nameand password is compromised.The Depository Participant and the Client shall have the right toterminate this agreement after giving a notice of atleast 10 days to theother party.v. The above terms and conditions are in addition to and not in violationof the terms and conditions forming a part of the "Agreement betweenthe Depository Participant and the person seeking to open an accountwith the Depository Participant" signed by the Client at the time ofopening the account with the Depository.IN WITNESS WHEREOF the Depository Participant and the Client has causedthese presents to be executed as of the day and year first above written.Signed and delivered by(for and on behalf of the Client)(Witness)Signed and delivered by(for and on behalf of the Depository Participant) (Witness)[ 209 ]
Internet-based Demat Account Statement - IDeASCircular No.Sub: Auto-reset password facility on IDeAS<strong>NSDL</strong>/POLICY/As all Participants are aware, IDeAS facility was enhanced to facilitate Users2010/0074 to capture or modify their email addresses registered on IDeAS (Ref.:CircularDate: July 1, 2010 No. <strong>NSDL</strong>/POLICY/2010/0057 dated May 25, 2010). New feature of auto-resetof password on IDeAS facility will be released on Saturday, July 10, 2010. Thisfeature will assist those IDeAS users who have forgotten their passwords orhave entered wrong passwords (upto three attempts). This feature is madeavailable for Users exclusively availing IDeAS facility. If Users have subscribedfor both IDeAS as well as SPEED-e facility, this auto-reset password facility isnot available. The procedure for auto-reset of password is given below:(1) User would be required to enter the following details:a) User IDb) DP IDc) Client IDIn case the User cannot enter correct details, he/she will be requiredto follow the usual method for resetting the password (i.e., approachingits Participant).(2) Upon successfully entering the details as mentioned in point (1), IDeASwebsite will display a message that new password would be sent to theemail address registered by the User on IDeAS facility.(3) The password will be concealed in a ‘PDF’ file and sent to the User’semail address registered on IDeAS facility. Logic for opening the ‘PDF’file will be communicated to the User in the email.(4) Upon entering the User ID and password (password provided in the‘PDF’ file), IDeAS website will force the User to change the password.(5) Upon successfully changing the password, User will get access to IDeASfacility.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel: (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No.Sub: Display of value of mutual fund holdings on IDeAS facility based on<strong>NSDL</strong>/POLICY/NAV.2010/0070 As Participants are aware, Clients of IDeAS facility can view the latest balancesDate: June 25, 2010 of their demat accounts on the internet along with the value based on theprevious day closing price. IDeAs facility has been further enhanced to displaythe values in respect of mutual fund units (security type code ‘20’) (held bythe Clients in their demat accounts) based on the NAVs (i.e.,Net Asset Value).Further, the date of the NAV of mutual fund units would also be displayed onIDeAS facility.This aforesaid feature would be released on IDeAS facility with effect fromSaturday, June 26, 2010.[ 210 ]
Circular No.Sub: Change in registration process for Clients registered for IDeAS facility<strong>NSDL</strong>/POLICY/through DIRECT2010/0058 As Participants are aware that DIRECT (Direct Ideas REgistration of ClientDate: May 25, 2010 accounT) facilitates registration of depository accounts activated under theIndividual category i.e. Resident-Ordinary, Resident-HUF, NRI-Repatriable, NRI-NonRepatriable and Foreign National-FN for IDeAS facility directly at <strong>NSDL</strong>(Refer Circular No. <strong>NSDL</strong>/POLICY/2009/0087 dated September 22, 2009).IDeAS facility has now been enhanced wherein account holder can enter UserID of his/her choice at the time of registering for IDeAS facility through DI-RECT. As a result, the registration process for DIRECT has undergone a changewhich is given at Annexure A.This feature is scheduled to be released on IDeAS facility on Saturday, May 29,2010.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Annexure A(i) <strong>NSDL</strong> will register the Client for IDeAS facility provided email address ofthe sole holder or at least one of the account holder in case of jointaccounts is captured in the DPM System.(ii) Participants are requested to take due care at the time of capturingemail address of the account holder(s) in the DPM System, that is providedby the Client.(iii) ‘PDF’ file containing registration link will be sent to the Sole Holder’s /First Holder’s (in case of joint accounts) email address (that is capturedin the DPM System) within a week of activation of the depository account.In case the email address of the first holder is not available, thenemail will be sent to the second or third holder, as the case may be,whose email address is captured in the DPM System.(iv) The ‘PDF’ file sent to the account holder will be password protected.Logic for opening the ‘PDF’ file will be communicated to account holderin the email. Process for login to IDeAS website by the account holderafter receiving the ‘PDF’ file from <strong>NSDL</strong> is given in seriatim :a) The ‘PDF’ file will have a registration link and registration password.Account holder will have to click on the registration link.b) The link will direct the account holder to IDeAS pre-registrationwebpage. Account holder will enter the password (provided in the‘PDF’ file) in the pre-registration webpage and click on ‘Submit’button.c) Registration page would be displayed on the screen. Account holderwill enter details viz., User ID of his / her choice, date of birth andpassword & re-confirm password. In case the User ID entered isalready registered for IDeAS facility, account holder will be requiredto enter another User ID of his / her choice. Further, thispage would also display other details of the account holder viz,name of the account holder(s), DP ID, Client ID, email ID etc. (ascaptured in the DPM System) which would be static.[ 211 ]
d) After successful entry of the above details by the account holder,confirmation page containing all the aforesaid details (mentionedin point no. c) would be displayed. Account holder will have toclick on the ‘Confirm’ button.e) Account holder will be directed to IDeAS login page (https://ideas.ideas.nsdl.com) upon clicking ‘Click here to login to IDeASfacility’.f) Account holder will login to the IDeAS website by entering theUser ID and password.g) IDeAS website will display the terms and conditions.h) After the account holder gives confirmation to the terms and conditions,the account holder will get access to IDeAS facility.i) The Statement of holdings and transactions will be displayed fromthe next business day onwards after the account holder has successfullylogin to the IDeAS facility i.e., if the account holder hassuccessfully login to the IDeAS facility on Monday, the statementof holdings and transactions will start getting displayed from Tuesdayonwards. Further, the transaction statement of current monthwill be available for download latest by 7th of the following month.j) In case the account holder does not register for IDeAS facility within30 days of sending of the email, the registration link will get disabled.Account holder in such case will have to then opt for usualmethod for IDeAS registration (Ref : Circular No. <strong>NSDL</strong>/POLICY/2007/0059 dated October 5, 2007).Circular No.Sub: Facility to reset password and view & change email ID on IDeAS facility<strong>NSDL</strong>/POLICY/All Participants are hereby informed that Users (i.e.Clients) of IDeAS facility2010/0057 will be given the ability to reset forgot passwords themselves by keying-in fewDate: May 25, 2010 parameters on IDeAS website. The new password would be sent at their emailaddress registered on IDeAS website. This feature will be released on IDeASfacility in June 2010.As a preparatory step to the above facility, IDeAS facility is being enhanced tofacilitate Users to view / change their email addresses registered on IDeAS.This feature is scheduled to be released on IDeAS facility on Saturday, May 29,2010. In this regard, existing Users who login on to IDeAS facility after releaseof this feature will be required to follow the below given process:(i) Upon entering the User ID and password on IDeAS website, a screenwould appear, which will prompt the User to either confirm the existingemail ID (i.e., email ID entered by Users at the time of registrationthrough usual method or available in the DPM system if registeredthrough DIRECT) or change the email ID by entering a new email ID.(ii) Upon giving confirmation to the existing email ID or upon changing theexisting email ID, User will be required to enter his/her login password.Thereafter, User will be provided access to the IDeAS facility.A separate link named ‘View / Change Email ID’ is provided on IDeAS facilitywhich will facilitate User to view as well as change his / her email ID. Uponchanging the email ID, an auto generated email will be sent to both the existingand new email address (changed) of the User. User will receive the emailfrom <strong>NSDL</strong> from the email ID: ideas@nsdl.co.in.[ 212 ]
Circular No.Sub: Reduced de-registration period for Users who do not login to IDeAS<strong>NSDL</strong>/POLICY/facility registered through DIRECT2010/0012 As Participants are aware that DIRECT (Direct Ideas REgistration of ClientDate: February 3, 2010 accounT) facilitates registration of depository accounts activated under theIndividual category i.e. Resident-Ordinary, Resident-HUF, NRI-Repatriable, NRI-NonRepatriable and Foreign National-FN for IDeAS facility directly at <strong>NSDL</strong>(Refer Circular No. <strong>NSDL</strong>/POLICY/2009/0087 dated September 22, 2009).The period for de-registration of User IDs of account holders registered throughDIRECT (Direct Ideas REgistration of Client accounT) has been reduced from60 days to 30 days. As a result, the User IDs of the account holders who do notlogin to the IDeAS facility within the specified period (i.e.,30 days) of sendingthe email from <strong>NSDL</strong> will be de-registered. In such case, the account holderswill have to opt for usual method of IDeAS registration.Circular No.Sub: Launch of DIRECT (Direct Ideas REgistration of Client accounT) at<strong>NSDL</strong>/POLICY/<strong>NSDL</strong> upon activation of Client accounts2009/0087 As Participants are aware, <strong>NSDL</strong>’s common internet facility called IDeASDate: September 22, facilitates demat account holders to view latest balances alongwith the value2009 based on the previous day closing price and transactions that have takenplace during last 30 days in the depository accounts. IDeAS also features thefacility of downloading, printing and viewing digitally signed monthlytransaction statements for previous 12 months.IDeAS facility has now been enhanced wherein depository accounts activatedwith effect from September 24, 2009 under the Individual category i.e.Resident-Ordinary, Resident-HUF, NRI-Repatriable, NRI-Non Repatriable andForeign National-FN will be directly registered at <strong>NSDL</strong> for the IDeAS facility.Salient features of DIRECT are as follows:(i) <strong>NSDL</strong> will register the Client for IDeAS facility provided email addressof the sole holder or at least one of the account holder in case of jointaccounts is captured in the DPM System.(ii) Participants are requested to take due care at the time of capturingemail address of the account holder(s) in the DPM System, that isprovided by the Client.(iii) The User ID and password will be sent to the Sole Holder’s / First Holder’s(in case of joint accounts) email address (that is captured in the DPMSystem) within a week of activation of the depository account. In casethe email address of the first holder is not available, then User ID andpassword will be sent to the second or third holder, as the case may be,whose email address is captured in the DPM System.(iv) The User ID and password sent to the account holder will be in a passwordprotected ‘PDF’ file. Logic for opening the ‘PDF’ file will becommunicated to Clients in the email. Process for login to IDeAS Websiteby the account holder after receiving ‘PDF’ file from <strong>NSDL</strong> is given inseriatim :a) Account holder will login to the IDeAS website (https://ideas.ideas.nsdl.com) with the requisite User ID and password(provided in the ‘PDF’ file).b) The website will display the terms and conditions.c) After the account holder has given his/her confirmation to theterms and conditions, the system will force the account holder tochange the password.[ 213 ]
d) After the account holder has successfully changed the password,he/she will get the access to the IDeAS website.e) In case the account holder does not login to IDeAS within 60 daysof sending of the email, the User ID of the account holder will bede-registered. Account holder in such case will have to then optfor usual method for IDeAS registration [Ref.: Circular No. <strong>NSDL</strong>/POLICY/2007/0059 dated October 5, 2007].For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No.Sub: Launch of Virtual Keyboard on IDeAS / SPEED-e websites to facilitate<strong>NSDL</strong>/POLICY/Users to enter password in more secured manner and change in minimum2009/0027 configuration for accessing IDeAS / SPEED-e websitesDate: April 11, 2009 All Participants are hereby informed that <strong>NSDL</strong> is pleased to announce thelaunch of virtual keyboard on IDeAS (https://ideas.nsdl.com) / SPEED-e(https://speed-e.nsdl.com) websites to facilitate Users to enter their passwordin a more secured manner. This feature is released on April 11, 2009. Salientfeatures of Virtual Keyboard are as follows:(i) This feature is available for password based Users of IDeAS andSPEED-e facility and Clearing Members availing the facility of IDeASusing password based option (hereinafter referred as Users).(ii) Virtual keyboard will be made available for Users on IDeAS / SPEED-ewebsites to enter their password at the time of registration, login,reset of password, change of password and during auto-expiry ofpassword.(iii) At present, Users enter their password using a physical keyboard forlogin to IDeAS / SPEED-e websites. Users will now have the choice toenter their password either using the physical keyboard or virtualkeyboard (after enabling the check box - ‘Use Virtual Keyboard’).(iv) Users will be required to enter the entire password (in toto) eitherusing the physical keyboard or virtual keyboard for all the passwordfields provided on the screen.The minimum configuration of a PC for accessing IDeAS / SPEED-e websiteshas been revised as follows:Operating System Microsoft Windows 2000, Windows Server 2003, WindowsXP and Windows Vista.BrowserMicrosoft Internet Explorer 6.0 and above.RAM512 MBThe above information about virtual keyboard will also be displayed on IDeAS/ SPEED-e websites. Participants may guide their Clients in this regard.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Circular No.Sub: Withdrawal of User fee for Users of IDeAS facility and reduction in<strong>NSDL</strong>/POLICY/annual fees for SPEED-e facility2009/0025 As all Participants are aware, <strong>NSDL</strong>’s common internet facility called IDeASDate: April 1, 2009 facilitates investors to view latest balances and transactions in their depositoryaccounts. SPEED-e facilitates Users (Beneficial Owners and Clearing Members)[ 214 ]
to submit delivery instructions on the internet. SPEED-e facilitates Participantsto eliminate paper [Delivery Instruction Slips (DIS)] resulting in reduction incost of storage and processing of DIS and the risk involved in verifying specimensignatures of account holders at the time of processing DIS.<strong>NSDL</strong> is pleased to announce reduction in the fees for IDeAS and SPEED-efacilities with effect from April 1, 2009 as follows:Particulars Existing Fees Revised FeesIDeASUser Fee Rs.10 per quarter NilSPEED-eAdmission Fee Rs. 6,00,000 Rs.2,00,000Annual Fee Rs.1,00,000 for main DPM Rs.25,000 irrespectiveset-up and Rs. 50,000 for of number of DPMevery additional DPMset-upsset-up subject to amaximum of Rs 3,00,000.The revised fee structure and features of IDeAS and SPEED-e facilities areenclosed at Annexure I and Annexure II respectively.For further information / clarification, Participants are requested to contactMr. Sandeep Kumar Tel : (022) 2499 4361 (email : sandeepk@nsdl.co.in) / Mr.Rahul Gupta Tel : (022) 2499 4372 (email : rahulg@nsdl.co.in) / Mr. NarayanVenkat Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in).Annexure IFee structure for IDeAS and SPEED-e (for Participants)Type of feeIDeASAdmission fee NIL -Annual Fee Rs.10,000 for first Fees for the ensuing calendar yearDPM set-up and (January to December) will beRs.5,000 for every charged in the monthly billadditional DPM set-up. for December.SPEED-eAdmission fee Rs. 2,00,000Payable at the time of joiningSPEED-e facility.Annual Fee Rs. 25,000 irrespective Payable at the time of joiningof number of DPM SPEED-e facility. Fees will beset-ups.charged in advance in the monthlybill of March for the ensuingfinancial year (April to March).Note : If Participants subscribe for SPEED-e facility, no charges are payableby Participants for IDeAS facility.FeeType of User Facility FeePassword based UserBO (Beneficial Only IDeASOwners)BO Only SPEED-e NILBOIDeAS and SPEED-e[ 215 ]
E-token* based UserBO Only IDeAS NILOnly SPEED-eIDeAS and SPEED-eRs. 125 per quarterRs. 125 per quarterCM (Clearing Only IDeAS Payable annually by CM to <strong>NSDL</strong>Members) Only SPEED-e Rs. 125 per quarter* Charges for e-token will be Rs.1,000 approx.Annexure IIVarious features and advantages of IDeAS facility are given below:(I) Clients (Beneficial Owners) View the latest balances along with the value based on the previousday closing price* in depository account(s). View transactions that have taken place in depository account(s)during the last 30 days. Download month-wise transaction statement for the previous months(maximum 12 months) bearing <strong>NSDL</strong>’s digital signature, which canbe verified by using a Signature Verification Utility. SEBI has permitted the Participants to discontinue providing physicaltransaction statements to their Clients who subscribe for the IDeASfacility. However, Participants will be required to send a consolidatedtransaction statement, in physical form, for the entire financial yearand the same shall be dispatched before 15th of May every year(Refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0010 dated March 24,2006).*Disclaimer : While care has been exercised by <strong>NSDL</strong> compiling price file, <strong>NSDL</strong> does not warrantcompleteness or accuracy and damages arising out of use of this information. For any specific /latest information, you may contact the respective stock exchange.(II) Clearing Members (CMs)CMs will be able to view and download the latest balances and transactionsin their pool accounts in respect of settlements for the current pay-indate, previous four and next four pay-in dates. Other features availableon IDeAS for CMs are as follows: View ISIN-wise positions / transactions for a given market type andsettlement number. View Delivery-out instructions which are in ‘overdue’ status, for agiven market type and settlement number. Download transactions in the Pool Account to determine shortagesfor follow-up with Clients. Download ISIN master to keep the back-office system up-to-date.Various features and advantages of SPEED-e facility are given below:(I) Features(a) Clients: Password based Users can submit market instructions in favourof maximum three pre-notified CM Accounts. E-token Users can submit both market as well off-marketinstructions in an interactive as well as batch upload. Submission of instruction(s) to freeze / unfreeze account(s) /ISIN(s) and / or specific quantity of securities under an ISIN.Further, freeze request executed by Clients through SPEED-ecannot be unfrozen by the Participant (applicable for e-tokenbased Users).[ 216 ]
(b) CMs:CM Users can avail the following features both on interactive as wellas on a batch submission mode: Delivery-out to Clearing Corporation Delivery to Client Inter-Settlement CM Pool to Pool(II) Advantages Check the latest balances in the depository account through IDeASbefore submitting instructions and monitor the status of executionof the same. View status of execution of delivery instructions. Save time and efforts in obtaining delivery instruction slips andsubmitting them to Participant. Freeze depository accounts on SPEED-e. Freeze created throughSPEED-e can be unfrozen only through SPEED-e (applicable fore-token based Users). Convenience for NRI Clients to operate their accounts.Circular No.Sub: IDeAS Operational Manual for DPs<strong>NSDL</strong>/POLICY/In continuation to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0057 dated September2007/0059 29, 2007 informing DPs that the IDeAS Users (Password/Smart Card) will beDate: October 5, 2007 able to view the Value of the holdings (in INR) on IDeAS. <strong>NSDL</strong> is now pleasedto inform the DPs that the IDeAS Operational Manual for DPs will now beavailable for download on SQLASSIST Intranet site of <strong>NSDL</strong> (//sqlassist/IDeASOperational Manual). This operational manual will also be available fordownload to DP Users (i.e. Admin and Functional User) on <strong>NSDL</strong> SPEED-ewebsite (https://speed-e.nsdl.com).Circular No.Sub : Display Value of holdings to subscribers of IDeAS<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, <strong>NSDL</strong> offers an Internet based2007/0057 facility called IDeAS (Internet-based Demat Account Statement) throughDate: September its SPEED-e website (https://speed-e.nsdl.com). IDeAS enables a Client to29, 2007 view the latest balances as well as the transactions that have taken placein the last thirty days in its demat account. IDeAS also features the facility ofdownload of digitally signed monthly transaction statements. DPs are advisedto refer to our various circulars (<strong>NSDL</strong>/PI/2003/2054, <strong>NSDL</strong>/PI/2004/1157,<strong>NSDL</strong>/PI/2005/1920, <strong>NSDL</strong>/POLICY/2006/0010 and <strong>NSDL</strong>/POLICY/2006/0045dated December 20, 2003, June 29, 2004, October 7, 2005, March 24, 2006and October 5, 2006 respectively) in this regard.<strong>NSDL</strong> is now pleased to inform the DPs that the IDeAS Users (Password/SmartCard) will be able to view the Value of the holdings (in INR) on IDeAS w.e.fSeptember 29, 2007. This facility will be available for Beneficial Owners only.Value of the holdings will be displayed only for listed ISINs with the date ofthe prices used for calculation of the value.DPs are requested to disseminate the above information to their IDeAS Users.For further information, DPs can visit SPEED-e website https://speede.nsdl.comor contact Mr. Charles Mathew / Mr. Vinith Nair on Tel. No. (022)2499 4482 / 4414.Circular No.Sub : New feature in IDeAS - viewing of transactions<strong>NSDL</strong>/POLICY/As all Participants are aware, <strong>NSDL</strong> offers an internet based facility called2006/0045 IDeAS (Internet-based Demat Account Statement) through https://speed-Date: October 5, 2006 e.nsdl.com. IDeAS at present enables Clients (Beneficial owners) to viewthe latest balances and transactions that have taken place in the last five[ 217 ]
days, in their depository accounts. <strong>NSDL</strong> is pleased to inform that Clients willnow be able to view the transactions for a period of past 30 days. Clients canselect the period upto 30 days from the current date, to view the transactions.Further, IDeAS also features the facility of download of digitally signed monthlytransaction statements for a period of 12 months (Refer Circular No. <strong>NSDL</strong>/POLICY/2006/0010 dated March 24, 2006).Participants are requested to disseminate the above information to theirClients.Circular No.<strong>NSDL</strong> launched IDeAS (Internet-based Demat Account Statement) w.e.f.<strong>NSDL</strong>/PI/2004/1157 January 1, 2004. IDeAS is a facility available on SPEED-e website for viewingDate: June 29, 2004 balances and transactions in demat accounts (ref. Circular No. <strong>NSDL</strong>/PI/2003/2054 dated December 20, 2003). At present, subscribers to IDeAS (Beneficialowners) can view the latest balances and transaction that have taken placein the last five days in their depository accounts. Based on the feedbackreceived from the users, Participants have requested <strong>NSDL</strong> to providetransaction statements on a monthly basis. Accordingly, <strong>NSDL</strong> is pleased toprovide the facility to download the transaction statement on a monthlybasis, to the subscribers of IDeAS, on a pilot basis, w.e.f. July 1, 2004. Thetransaction statements of a particular month will be available latest by 7thof the following month and will be available for download till the details ofthe following month are uploaded to IDeAS. It may be mentioned that if thesubscription to IDeAS is during the month, transaction statement for thatmonth will be for the period starting from the date of subscription till theend of that month.Circular No.<strong>NSDL</strong> launched SPEED-e in September 2001 to enable demat account holders<strong>NSDL</strong>/PI/2003/2054 to submit delivery instructions through Internet. <strong>NSDL</strong> is now pleased toDate: December 20, announce the launch of a facility called IDeAS (Internet-based Demat2003 Account Statement) w.e.f. January 1, 2004. IDEAS is a facility for viewingbalances and transactions in demat accounts updated on an online but notreal time basis. This facility is available to the users of SPEED-e, ClearingMembers who have subscribed to SPEED and to those Clients whose Participantsare registered for IDeAS. Salient features of IDeAS:(A) Clients (Beneficial Owners) :Clients can view the latest balances and transactions that have taken placein the last five days in their depository accounts. Print-out of the screen canalso be taken.(B) Clearing Members (CMs):CMs will be able to view and download the latest balances and transactions intheir pool accounts in respect of settlements for the current pay-in date,previous four and next four pay-in days.Other features for CMs:a. View ISIN-wise positions / transactions for a given market type andsettlement number.b. View Delivery-out instructions which are in “overdue” status, for a givenmarket type and settlement number.c. Download transactions in the Pool Account and import into back-officesystem to determine shortages for follow-up with clients.d. Download ISIN master to keep the back-office system up-to-date.Participants who wish to subscribe to IDeAS will have to pay one time Admissionfee of Rs. 25,000/- and Annual fee of Rs. 10,000/- and Clients who wish toregister for IDeAS will have to pay a quarterly fee of Rs. 10/-. Participants[ 218 ]
who have already subscribed to SPEED-e get IDeAS at no additional cost.However, Clients (who are already subscribers of SPEED-e) of such Participantswho are desirous of subscribing to IDeAS will have to pay an additional quarterlyfee of Rs. 5/- per account i.e. quarterly fee would be Rs. 30/- or Rs. 130/-for password users/smart card users respectively. In case Clients of suchParticipants wish to subscribe only to IDeAS, they will have to pay a quarterlyfee of Rs. 10/- per account.Participants are hereby informed that they will be required to register Clientsfor IDeAS while registration of CMs will be done directly by <strong>NSDL</strong>. It may bementioned that existing SPEED-e users (both password and smart card users)can register online for IDeAS by clicking on the "Change Service" link on SPEEDewebsite https://speed-e.nsdl.com and selecting 'IDeAS'. After Participantauthorises the request, users will be able to access IDeAS with the existingUser Id and password.For further information, Participants can visit SPEED-e websitehttps://speed-e.nsdl.com or contact Mr. Prashant Vagal/Mr. Pankaj Srivastavaon Tel. No. (022) 56608037.Exemption from sending physical transaction statement to subscribers of IDeASCircular No.Sub : Exemption from sending physical transaction statement to<strong>NSDL</strong>/POLICY/subscribers of IDeAS2006/0010 As all Participants are aware, <strong>NSDL</strong> offers an Internet based facility calledDate: March 24, 2006 IDeAS (Internet-based Demat Account Statement) through its SPEED-ewebsite (https://speed-e.nsdl.com). IDeAS can be availed of by a BeneficialOwner (Client) provided its Participant has subscribed to this service.IDeAS enables a Client to view the latest balances as well as the transactionsthat have taken place in the last five days in its demat account. IDeAS alsofeatures the facility of download of digitally signed monthly transactionstatements. Participants are advised to refer to our various circulars (<strong>NSDL</strong>/PI/2003/2054, <strong>NSDL</strong>/PI/2004/1157 and <strong>NSDL</strong>/PI/2005/1920 dated December20, 2003, June 29, 2004 and October 7, 2005 respectively) in this regard.Clients can verify the digital signature of <strong>NSDL</strong> using a Signature VerificationUtility. The detailed procedure regarding installation of Signature VerificationUtility is available on SPEED-e website.<strong>NSDL</strong> is now pleased to inform the Participants that if a Client subscribes toIDeAS, SEBI has permitted the Participants to discontinue providing physicaltransaction statements to their Clients. However, the Participants will berequired to send a consolidated transaction statement, in physical form, forthe entire financial year and the same shall be dispatched before 15 th of Mayevery year.To enable the Participants to service the Clients, <strong>NSDL</strong> proposes to maintainmonth-wise transaction statements for a period of 12 months on IDeAS.Transaction statement for a particular month will be available for downloadlatest by 7 th of the following month (for eg. transaction statement of April2006 will be available for download by May 7, 2006). However, if a Clientsubscribes to IDeAS during the month, the transaction statement for the brokenperiod will be available in the next month i.e. if a Client subscribes on April15, 2006, the transaction statement of April for that Client will showtransactions from April 16-30, 2006 onwards. Participants are advised tobring the aforesaid changes to the notice of all their Clients.Participants who wish to subscribe to IDeAS will have to pay one time Admission[ 219 ]
Transaction Statement - Controls on despatchfee of Rs. 25,000 and Annual fee of Rs. 10,000 and Clients who wish to registerfor IDeAS will have to pay a quarterly fee of Rs. 10. Participants who havealready subscribed to SPEED-e get IDeAS at no additional cost. However,Clients (who are already subscribers of SPEED-e) of such Participants whoare desirous of subscribing to IDeAS will have to pay an additional quarterlyfee of Rs. 5 per account i.e. quarterly fee would be Rs. 30 or Rs. 130 forpassword users/smart card users respectively. In case Clients of suchParticipants wish to subscribe only to IDeAS, they will have to pay a quarterlyfee of Rs. 10 per account.For further information, Participants can visit SPEED-e websitehttps://speed-e.nsdl.com or contact Mr. Prashant Vagal / Mr. Narayan Venkaton Tel. No. (022) 2499 4481 / 4479.Circular No.All Participants are advised to ensure that the Transaction Statements required<strong>NSDL</strong>/PI/99/823 to be given to the clients as per Business Rule 14.3.1 of <strong>NSDL</strong>, are despatchedDate : October 20, directly to the addresses of clients as per the records (e.g account opening1999 form) of the Participant and not through the franchisees / collection centres.Transaction Statement - Provide transaction statement and not holding statementCircular No.<strong>NSDL</strong>/PI/2000/103Date: January 31, 2000As all Participants are aware, Transaction Statements are required to begiven to all clients at fortnightly intervals. Further, if there is no transactionin the account, then the Participant has to provide the Transaction Statementto the client atleast once a quarter.<strong>NSDL</strong> has received complaints that in some cases only holding statements areissued to clients which do not indicate the transaction. This is a violation of<strong>NSDL</strong>'s Byelaws and regulations. In this context, Participants are advised thatthe Transaction Statements be provided to the clients in the format prescribedin Annexure V of the Business Rules of <strong>NSDL</strong>.<strong>NSDL</strong> has also received complaints that in some cases clients have not beenprovided with the bill of charges while their accounts have been debited (asper authorisation given by clients). Participants are requested to providesuch details to their clients.Transaction Statement - RBI directive on providing Transaction Statement to Bank clientsCircular No.Participants may be aware that w.e.f. January 16, 2003, Reserve Bank of<strong>NSDL</strong>/PI/2003/0308 India (RBI) has decided to retail Government Securities through stockDate : February 22, exchanges.2003 RBI has, vide its letter no. IDMC No. 3212/10.26.65 / 2002-03 dated February 6,2003 informed <strong>NSDL</strong> that the Department of Banking Operations and Development(DBOD) vide its circular dated January 16, 2003 has enabled banks to trade ingovernment securities on the stock exchanges. RBI has further informed that thegovernment securities maintained by the banks with the depositories will beincluded for Statutory Liquidity Ratio (SLR) purposes and SLR is required to bemaintained on a daily basis. In view of this, Transaction Statements should beprovided to banking Clients as of every Friday giving details of the securities heldby them on each day of the week.Participants are therefore advised to provide Transaction Statements to theirbank Clients, so as to enable them to comply with the requirements of RBI.[ 220 ]
Transaction Statements - Footnote in the transaction statements sent to ClientsCircular No.Sub: Footnote in the Transaction Statements provided to Clients<strong>NSDL</strong>/POLICY/As all Participants are aware, <strong>NSDL</strong> has enabled the facility of holding mutual2010/0002 fund units in dematerialised form as per the scheme envisaged by SEBI videDate: January 4, 2010 its Circular No. SEBI/IMD/CIR No.11/183204/2009 dated November 13, 2009for transacting in mutual funds [Ref.: Circular No.: <strong>NSDL</strong>/POLICY/2009/0116dated December 5, 2009].In order to spread awareness about this facility and encourage investors toavail this facility, following footnote has been incorporated in the TransactionStatements, of Client accounts (Active or Frozen) where PAN flag is enabledin DPM System. In case of accounts which are suspended for PAN noncompliance,the footnote related to PAN will continue to be displayed.“You can now hold your mutual fund investments in this demat account.Contact your Depository Participant or your stock broker for moreinformation”.In order to incorporate the aforementioned changes in the DPM System,Participants are advised to:1. Copy the enclosed zip file i.e. “Client_Setup” into C:\ drive of yourDPM setup.2. Extract the folder i.e. “Client_Setup” in C:\ drive.3. Open “Client_Setup” folder and double click on the file named as“Double_Click.Bat”.Participants who are providing the Transaction Statements through their backoffice system are advised to make necessary changes to their back officesystem and incorporate the aforesaid footnote in the Transaction Statementsfor the month ended January 2010 onwards.As regards conversion of physical units held in Statements of Account forminto dematerialised form, this will be notified to the Participants after it isapproved by SEBI. Participants may contact Mr.Ashish Kini or Mr.RavindraSahu at Tel. No. 022 – 24994494 or 022-24994212 or email IDsashishk@nsdl.co.in or ravindras@nsdl.co.in for any information on holding/transacting mutual fund units through the depository accounts.Circular No.Further to our Circular No. <strong>NSDL</strong>/PI/2004/1104 dated June 21, 2004, regarding<strong>NSDL</strong>/PI/2004/2291 insertion of footnote in the transaction statements sent to the Clients, allDate : December 23, 2004 Participants are hereby informed that w.e.f December 24, 2004, transactionstatements printed from DPM system will bear the prescribed text of thefootnote.Further, transaction statements printed from the DPM system will also containthe "client type" and "client sub type". Participants who print transactionstatements from their back office are advised to incorporate these featuresin their back office.This software release is planned on December 24, 2004.Circular No.As per the Bye Laws and Business Rules of <strong>NSDL</strong>, all Participants are required<strong>NSDL</strong>/PI/2004/1104 to provide transaction statements to their Clients.Date : June 21, 2004 In this context, Participants are hereby advised to insert a footnote in thetransaction statements stating that "any discrepancy in the statement shouldbe brought to the notice of(name of the Participant)within one month from the date of the statement".[ 221 ]
Providing Statement of transaction to Beneficial Owner consequent to account closureCircular No.All Participants are hereby advised that if a Beneficial Owner (Client) makes<strong>NSDL</strong>/POLICY/a request for closure of accounts, Participants should provide the Statement2006/0014 of Transaction (SOT) to such Client for the period from the beginning of theDate: May 11, 2006 quarter in which the account is closed till the date of closure. Further, theSOT should bear the words "Account Closed" and should be prominent. Forthis purpose, Participants can affix a rubber stamp or create a suitable systemthat will clearly show on the SOT that the account has been closed.Transaction Statements - Exemption from giving hard copies of transaction statements to BeneficialOwners by DPsCircular No.As per the Bye Laws and Business Rules of <strong>NSDL</strong>, Participants are required to<strong>NSDL</strong>/PI/2004/1514 provide a transaction statement including statement of accounts, if any, toDate: August 24,2004 the Clients at monthly intervals, unless the Participant and its Clients haveagreed for provision of such statements at shorter intervals. However, if thereis no transaction in the account, then the Participant is required to providesuch statement to the Client atleast once a quarter.In this regard, Participants are informed that SEBI has vide its Circular No.MRD/DoP/Dep/Cir-27/2004 dated August 16, 2004 (copy enclosed) clarifiedthat Participants can be exempt from giving hard copies of transactionstatements to beneficial owners subject to certain conditions.Participants may implement the above subject to the conditions contained inSEBI circular as well as the condition that such transaction statements isprovided to Clients as per the frequency specified under the Bye Laws andBusiness Rules of <strong>NSDL</strong>.Deputy General ManagerMarket Regulation DepartmentEmail:-sundaresanvs@sebi.gov.inAnnexureThe Managing Director,National Securities Depository Ltd.,Trade World, 4th Floor, Senapati Bapat Marg, Lower Parel,Mumbai - 400013The Executive Director,Central Depository Services (India) Ltd.,Phiroze Jeejeebhoy Towers, 27-28th Floor, Dalal Street,Mumbai - 400 023MRD/DoP/Dep/Cir-27/2004August 16, 2004Dear Sir/s,Sub: Exemption of Depository Participants(DPs) from giving hard copies of transactionstatements to Beneficiary Owners(BOs)1. In terms of Regulation 43 of SEBI (Depositories & Participants) Regulations, 1996, every DP isrequired to provide statements of account to the BO in such form and in such manner and at suchtime as provided in the agreement with the BO.[ 222 ]
2. Based on various representations received from the Depository Participants, it has been decidedto permit the DPs to provide transaction statements and other documents to the BOs under Digitalsignature, as governed under the Information Technology Act, 2000, subject to the DP enteringinto a legally enforceable arrangement with the BO for the said purpose. The providing of transactionstatements and other documents in the aforesaid manner would be deemed to be in complianceof the provisions of the Regulation 43 of SEBI (Depositories & Participants) Regulations, 1996.However if the BOs are still desirous of receiving statements in hard copy, the DPs shall be dutybound to provide the same.3. The depositories are accordingly advised to ;3.1 Make necessary amendments to the relevant bye-laws, rules and regulations for theimplementation of the above decision immediately, as may be necessary/applicable.3.2 bring the provisions of this circular to the notice of the DPs of the Depository and also todisseminate the same on the website.3.3 communicate to SEBI the status of the implementation.4. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securitiesand Exchange Board of India Act, 1992 to protect the interests of investors in securities and topromote the development of, and to regulate the securities market.Yours faithfully,V S SUNDARESANTransaction Statements - Exemption from providing transaction statementsCircular No.Sub: Clarification on sending transaction statements to Clients in respect<strong>NSDL</strong>/POLICY/of depository account with no transactions and no security balances.2009/0056 Participants are aware that <strong>NSDL</strong> has vide Circular No.: <strong>NSDL</strong>/POLICY/2009/Date: July 11, 2009 0006 dated January 15, 2009 exempted Participants from sending transactionstatements to Clients holding depository accounts with no transactions andno security balances subject to certain conditions.In this regard, Participants are hereby informed that the condition mentionedat point no.4 of Circular No.: <strong>NSDL</strong>/POLICY/2009/0006 dated January 15,2009 relating to SMS alert facility has been deleted. Participants are requestedto ensure compliance with the other conditions mentioned in the abovereferred circular.Circular No.Sub: Discontinuation of sending transaction statements to Clients to whom<strong>NSDL</strong>/POLICY/transaction statements were returned undelivered.2009/0024 <strong>NSDL</strong> has been receiving representations from Participants seeking permissionDate: April 1, 2009 for discontinuation of sending Transaction Statements to those Clients to whomTransaction Statements were returned undelivered in the past.Participants are hereby informed that they may not send TransactionStatements to those clients to whom Transaction Statements were returnedundelivered in the past subject to the following conditions:1. Transaction Statements were returned undelivered on three consecutiveoccasions.2. The Participant maintains proof that the Transaction Statements werereturned undelivered.3. The Transaction Statements were returned undelivered for the reasonswhich clearly establish that the client no longer resides at the givenaddress (i.e. party shifted, etc.) and not for other reasons (i.e.residence/office closed, address incorrect, address incomplete, etc.)[ 223 ]
4. The Participant informs such clients through alternative means (such asoutbound call, SMS or email) that their Transaction Statements arereturned undelivered and they need to communicate the proper (new)address.The Participant ensures that on receipt of request for address modificationfrom the client as per the stipulated procedure, the dispatch of TransactionStatements is immediately started. Further, the Participant ensures thatTransaction Statements that were not delivered and dispatched due todiscontinuation are also dispatched immediately without any additional costto the clients.Circular No.Sub: Exemption from sending Quarterly Transactions Statements to Clients<strong>NSDL</strong>/POLICY/in respect of demat accounts with no transactions and no security2009/0006 balances.Date: January 15, 2009 <strong>NSDL</strong> has been receiving representations from Participants seeking exemptionfrom sending Transaction Statements on quarterly basis to Clients holdingdemat accounts with no transactions and no security balances.Participants are hereby informed that they may not send the quarterlyTransaction Statements to such Clients subject to the following:1. Client is informed in advance that it will not be receiving TransactionStatements for such accounts till there are any transactions or securityholdings in the demat account.2. KYC and PAN requirement in respect of all such depository accounts arecomplied.3. No Annual Maintenance Charges are levied for such an account.4. Client must have opted for the SMS alert facility as provided by <strong>NSDL</strong>.5. Information which is required to be disseminated by Participants byway of a note in the Transaction Statements will be required to becommunicated to such Clients separately.6. The Internal Auditor of the Participant shall comment in its internalaudit report on compliance of the aforesaid requirements.Participants are advised to note that in case there is any transaction i.e.credit or subsequent debit in the Client's demat account, the Participantmust send Transaction Statements to the Client at stipulated intervals inaccordance with Bye Laws & Business Rules of <strong>NSDL</strong>.As Participants are aware, furnishing of Transaction Statement is a requirementfor those Clients who do not want to personally visit the Participant's officefor various requests such as address change, Delivery Instruction Slips, etc.For the purpose of such requests, "In-person' identification/presence will bemandatory for such clients in respect of whom the Participant opts not tosend the quarterly Transaction Statements.Circular No.Participants have been seeking clarification from <strong>NSDL</strong> whether they could<strong>NSDL</strong>/PI/2005/1692 discontinue providing transaction statement to a Client under the followingDate : September 9, conditions:20051) The Client has given an account closure request to the Participant;2) The Client account has only those ISIN(s) in the account which is / arein ‘suspended’ status and / or pending rematerialisation request(s).3) The Client authorises the Participant to remove the standing instructionto receive credits in the account.[ 224 ]
Circular No.<strong>NSDL</strong>/PI/2004/1515Date: August 24, 2004If the above conditions are satisfied, Participants need not provide transactionstatement to the Client, provided the Participant waives all charges viz.,annual maintenance charges etc. on such accounts from the date of suchdiscontinuation.Participants have brought to the attention of <strong>NSDL</strong> that even after followingthe procedure prescribed in Circular No. <strong>NSDL</strong>/PI/2003/0309 dated February22, 2003, dematerialisation requests pending disposal for a long time are notrejected. As a result, Participants continue to provide transaction statementsas per <strong>NSDL</strong> Bye Laws and Business Rules. Participants have requested forwaiver from this requirement.In this regard, Participants are advised to note that they need not providetransaction statements to such Clients, subject to the following:(a) The Client has requested the Issuer company to reject thedematerialisation request and return the physical securities (asprescribed under Circular No. <strong>NSDL</strong>/PI/2003/0309 dated February 22,2003) to the Client directly.(b) The Client is not interested in getting the securities dematerialised.(c) The Client authorises the Participant to remove the standing instructionto receive credits in his/her account.(d) Participant waives all charges viz. annual maintenance charges etc. onsuch accounts.SMS Alert FacilityCircular No.Sub: SMS Alert facility enhanced – Alerts for Credits<strong>NSDL</strong>/POLICY/ All Participants are hereby informed that with effect from March 5, 2010,2010/0021 SMS Alert facility will be enhanced whereby Clients will receive alerts forDate: March 4, 2010 credits (transfers) received in their demat accounts. These SMS Alerts will besent on the same day for credits received upto 7.00 pm. In respect of creditsreceived after 7.00 pm, SMS Alerts will be sent on the following day.Sample text message of SMS Alert is given below :(a) If the Client receives credit upto five ISINs in his/her demat account,the text message of the SMS alert would be as follows :On __________ (date, dd/mm/yy), ___ (Quantity) ________ (CompanyName), credited to your demat a/c no xxxx4086..<strong>NSDL</strong>(b) If the Client receives credit of more than five ISINs in his/her demataccount, the text message of the SMS alert would be as follows :“Securities of more than 5 companies (ISINs) credited to ur demat a/cno xxxx5678 on __________ (date, dd/mm/yy). Check details with urDP or on IDeAS website if subscribed..<strong>NSDL</strong>”A list of features of SMS Alert facility is enclosed for information of Participants.Circular No.Sub: SMS Alert Facility for credit/debit of Mutual Fund units.<strong>NSDL</strong>/POLICY/ All Participants are hereby informed that with effect from January 7, 2010,2010/0003 SMS will be sent to the depository account holders for credits/debits of MutualDate: January 6, 2010 Fund units.A sample text of the SMS is as follows:Credit of Mutual Fund Units“________ units of __________ (Scheme Name / ISIN as the case may be)credited on “………….” (date, dd-mm-yy) to your demat a/c no xxxx5678 –<strong>NSDL</strong>”[ 225 ]
Debit of Mutual Fund Units“________ units of __________ (Scheme Name / ISIN as the case may be)debited on “………….” (date, dd-mm-yy) from your demat a/c no xxxx5678 –<strong>NSDL</strong>”The list of features of SMS alert facility is enclosed for information ofParticipants.Circular No.Sub: SMS Alert Facility enhanced with change in address alerts.<strong>NSDL</strong>/POLICY/ All Participants are hereby informed that with effect from September 1,2009/0077 2009, an SMS will be sent to the client in case there is any change in addressDate: August 29, 2009 of the client recorded by the Participant in DPM system. In case two addressesof a client are recorded in the DPM system, SMS will be sent only when theaddress where the transaction statements are sent, is changed in the DPMsystem. Further, in case the indicator for address is changed based on therequest of the client, an SMS will be sent.A sample text of the SMS is as follows:"As per ur request, address in ur demat account ________ (Client ID) is recordedas B-7102, Meera CHS, M. G. Road, Opp. Shoppers' Stop, Andheri (E), Mumbai- 400069" (message to show first 80 characters of new address)The list of features of SMS alert facility is enclosed for information ofParticipants. Accordingly, the terms and conditions are revised and displayedon our website www.nsdl.co.inSMS Alert facility for <strong>NSDL</strong> demat account holdersIntroduction<strong>NSDL</strong> provides SMS Alert facility for demat account holders whereby they canreceive alerts directly from <strong>NSDL</strong> for following:1) All Debits (transfers)2) Credits for IPO, sub-division and bonus.3) Failed instructions4) Overdue instructions5) Change of mobile number6) Change of addressChargesNo charge is levied by <strong>NSDL</strong> on Depository Participants (DPs) for providingthis facility to investors.RegistrationThis facility will be available to the investors provided they have given theirmobile numbers to their DPs and the DPs have captured the numbers in theDPM system and have also enabled (ticked) the SMS flag in their DPM system.ContactThe investors may contact their respective DPs in case they do not receiveSMS alert inspite of registering for this facility. Those investors who haveprovided their mobile numbers to their DPs but do not wish to avail thisfacility may also inform their DPs.For further details / information investors may contact us at:Investor Relationship CellNational Securities Depository Limited4 th Floor, A Wing, Trade World, Kamala Mills CompoundSenapati Bapat Marg, Lower Parel, Mumbai – 400 013.Tel.: (022) 2499 4200 / 4090 4200 Fax: (022) 2497 6351Email: relations@nsdl.co.in[ 226 ]
Circular No.Sub : SMS Alert Facility for pay-in related instructions (from Client to CM<strong>NSDL</strong>/POLICY/Pool account) remaining in overdue status due to insufficient balance.2009/0033 As all Participants are aware, after introduction of partial settlement of pay-Date: May 6, 2009 in instructions from client account to the CM Pool Account, the instructionsto debit the account of the client where there are insufficient balances willremain in “Overdue” status and will be carried forward till the pay-in deadlinefor execution. For such instructions which remain in “Overdue” status, SMSwill be sent to the client about the instruction remaining in “Overdue” statusw.e.f. May 8, 2009. The schedule for sending the SMS is explained with anexample as follows:ConditionSMS AlertMonday as Execution date & SMS for overdue status will be sent oninsufficient balance in the account Tuesday morningInsufficient balance continues on SMS for overdue status will be sent onTuesday Wednesday morningFurther, for those instructions which get executed (either fully or partially)at pay-in deadline, an SMS in the regular course for debiting the account ofthe client will be sent.The text of SMS alerts for instruction remaining in overdue status due toinsufficient balance after the execution date is as follows:“Insufficient qty in your demat a/c ________ (Client ID) for transfer of _______(number of shares) shares of ____________ (Company Name/ISIN as the casemay be). Available qty will get transferred by pay-in date ________ (date,dd/mm/yy)”The revised terms & conditions are given in the Annexure and displayed onour website www.nsdl.co.inParticipants may inform their clients suitably.AnnexureSMS Alert facility for <strong>NSDL</strong> demat account holdersIntroduction<strong>NSDL</strong> has launched SMS Alert facility for demat account holders wherebyinvestors can receive alerts for debits (transfers) to their demat accounts,credits for IPO and offer for sale allotment, sub-division and bonus. Alertsare also sent in case the instructions given by investors for debiting theirdemat accounts fail or pay-in related instructions remain pending for executiondue to insufficient balance. These alerts are sent to those account holderswho have provided their mobile numbers to their Depository Participants(DPs). Alerts for debits are sent, if the debits (transfers) are up to five ISINsin a day. In case debits (transfers) are for more than five ISINs, alerts are sentwith a message that debits for more than five ISINs have taken place and thatthe investor can check the details with the DP or on IDeAS website, if theinvestor is an IDeAS subscriber.Benefits1. Investors will get to know about debits and credits for IPO and offer forsale allotment, sub-division, bonus and failed debit instructions & payinrelated instructions remaining pending for execution due toinsufficient balance without having to call-up their DPs.2. Investors need not wait for receiving Transaction Statements from DPsto know about such debits and credits.3. In case of any discrepancy, the investor can approach its DP forclarification sooner.[ 227 ]
ChargesNo charge is levied by <strong>NSDL</strong> on DPs for providing this facility to investors.RegistrationThis facility is available to investors who request for such a facility and providetheir mobile numbers to the DPs. In case mobile numbers already given havechanged, investors need to inform their DPs about the new numbers by wayof written requests. Investors who have not yet provided their mobile numbersto their DPs can also avail this facility by intimating their mobile numbers totheir DPs and submit a written request for this facility. This facility is notavailable to investors who have registered mobile numbers originating outsideIndia.Thus, this facility will be available to the investors provided they have giventheir mobile numbers to their DPs and the DPs have captured the numbers inthe computer system and have also enabled (ticked) the SMS flag in theirsystem.ContactThe investors may contact their respective DPs in case they do not receiveSMS alert inspite of registering for this facility. Those investors who haveprovided their mobile numbers to their DPs but do not wish to avail thisfacility may also inform their DPs.For further details / information investors may contact us at:Investor Relationship CellNational Securities Depository Limited4 th Floor, A Wing, Trade World, Kamala Mills CompoundSenapati Bapat Marg, Lower Parel, Mumbai – 400 013.Tel.: (022) 2499 4200 / 4090 4200 Fax: (022) 2497 6351Email: relations@nsdl.co.inTerms and Conditions1.1 DefinitionIn these Terms and Conditions, the following terms shall have thefollowing meanings:“Alerts” or “Facility” means the customized messages with respect tospecific events/transactions relating to an Investor’s Account sent asShort Messaging Service (“SMS”) over mobile phone to the Investor;“Investor” means the person who holds an Account;“Account” means the demat account of the Investor with <strong>NSDL</strong>maintained through its Depository Participant;“ISIN” means an International Securities Identification Number assignedto a security;“CSP” means the cellular service provider through whom the Investoror <strong>NSDL</strong> receives the mobile services.1.2 Availability1.2.1 <strong>NSDL</strong> at its sole discretion may discontinue the Facility at anytime by providing a prior intimation through its website or anyother medium of communication. <strong>NSDL</strong> may at its discretion extendthe Facility to investors who register mobile phones originatingoutside India.1.2.2 The Alerts would be generated by <strong>NSDL</strong> and will be sent to theinvestors on the mobile number provided by the investor and thedelivery of the Alert would be entirely based on the serviceavailability of the service provider and connectivity with other[ 228 ]
cellular circles of the CSPs or in circles forming part of the roamingGSM network agreement between such CSPs. The Alerts aredependent on various factors including connectivity and,therefore, <strong>NSDL</strong> cannot assure final and timely delivery of theAlerts.1.2.3 The investor will be responsible for the security and confidentialityof his/her Mobile Phone and mobile phone number to be used forthis Facility.1.3 Process1.3.1 This Facility provides Alerts to investors over mobile phones forthe debits (transfers), credits for IPO and offer for sale allotment,sub-division and bonus that have taken place in their accounts.Alerts are also sent in case the instructions given by investors fordebiting their demat accounts fail or pay-in related instructionsremain pending for execution due to insufficient balance. TheseAlerts will be sent to those investors who have requested for sucha Facility and have provided their mobile numbers to theirDepository Participants. Alerts will be sent for debits, if the debits(transfers) are up to five ISINs in a day. In case debits (transfers)are for more than five ISINs, Alerts will be sent with a messagethat debits for more than five ISINs have taken place and that theinvestor can check the details with the Depository Participant oron IDeAS website, if the investor is an IDeAS subscriber. Investorswho have provided their mobile numbers to Depository Participantsbut do not wish to avail of this Facility may do so by informingtheir Depository Participants accordingly.1.3.2 The investor is duty bound to acquaint himself/herself with thedetailed process for using the Facility and interpreting the Alertsfor which <strong>NSDL</strong> is not responsible for any error/omissions by theinvestor.1.3.3 The investor acknowledges that the Alerts will be implementedin a phased manner and <strong>NSDL</strong> may at a later stage; as and whenfeasible, add more Alerts. <strong>NSDL</strong> may, at its discretion, from timeto time change the features of any Alert. The investor will besolely responsible for keeping himself/herself updated of theavailable Alerts, which shall, on best-effort basis, be notified by<strong>NSDL</strong> through its website or any other medium of communication.1.4 Receiving Alerts1.4.1 The investor is solely responsible for intimating in writing to his/her Depository Participant any change in his/her mobile phonenumber and <strong>NSDL</strong> will not be liable for sending Alerts or otherinformation over his/her mobile phone number recorded with<strong>NSDL</strong>.1.4.2 The investor acknowledges that to receive Alerts, his/her mobilephone must be in an ‘on’ mode. If his/her mobile is kept ‘off’ fora specified period from the time of delivery of an Alert messageby <strong>NSDL</strong>, that particular message may not be received by theinvestor.1.4.3 The investor acknowledges that the Facility is dependent on theinfrastructure, connectivity and services provided by the CSPswithin India. The investor accepts that timeliness, accuracy andreadability of Alerts sent by <strong>NSDL</strong> will depend on factors affecting[ 229 ]
the CSPs and other service providers. <strong>NSDL</strong> shall not be liable fornon-delivery or delayed delivery of Alerts, error, loss or distortionin transmission of Alerts to the investor.1.4.4 <strong>NSDL</strong> will endeavor to provide the Facility on a best effort basisand the investor shall not hold <strong>NSDL</strong> responsible/liable for nonavailabilityof the Facility or non performance by any CSPs orother service providers or any loss or damage caused to the investoras a result of use of the Facility (including relying on the Alertsfor his/her investment or business or any other purposes) for causeswhich are attributable to /and are beyond the control of <strong>NSDL</strong>.<strong>NSDL</strong> shall not be held liable in any manner to the investor inconnection with the use of the Facility.1.4.5 The investor accepts that each Alert may contain certain accountinformation relating to the investor. The investor authorizes <strong>NSDL</strong>to send any other account related information, though notspecifically requested, if <strong>NSDL</strong> deems that the same is relevant.1.5 Withdrawal or Termination1.5.1 <strong>NSDL</strong> may, in its discretion, withdraw temporarily or terminatethe Facility, either wholly or in part, at any time. <strong>NSDL</strong> maysuspend temporarily the Facility at any time during which anymaintenance work or repair is required to be carried out or incaseof any emergency or for security reasons, which require thetemporary suspension of the Facility.1.5.2 Not withstanding the terms laid down in clause 1.5.1 above, eitherthe investor or <strong>NSDL</strong> may, for any reason whatsoever, terminatethis Facility at any time. In case the investor wishes to terminatethis Facility, he/she will have to intimate his/her DepositoryParticipant accordingly.1.6 Fees1.6.1 At present, <strong>NSDL</strong> is levying no charge for this Facility on theDepository Participants. The investor shall be liable for paymentof airtime or other charges, which may be levied by the CSPs inconnection with the receiving of the Alerts, as per the terms andconditions between the CSPs and investors, and <strong>NSDL</strong> is in no wayconcerned with the same.1.7 Disclaimer1.7.1 This Facility is only an Alert mechanism for the investors and isnot in lieu of the Transaction Statements required to be providedby the Depository Participant to its clients.1.7.2 <strong>NSDL</strong> shall not be concerned with any dispute that may arisebetween the investor and his/her CSP and makes no representationor gives no warranty with respect to the quality of the serviceprovided by the CSP or guarantee for timely delivery or accuracyof the contents of each Alert.1.7.3 The investor shall verify the transactions and the balances in his/her account from his/her Depository Participant and not rely solelyon Alerts for any purpose.1.7.4 <strong>NSDL</strong> will not be liable for any delay or inability of <strong>NSDL</strong> to sendthe Alert or for loss of any information in the Alerts in transmission.[ 230 ]
1.8 Liability1.8.1 <strong>NSDL</strong> shall not be liable for any losses, claims and damages arisingfrom negligence, fraud, collusion or violation of the terms hereinon the part of the investor and/ or a third party.Circular No. <strong>NSDL</strong>/ Sub : Intra day SMS Alert FacilityPOLICY/2009/0030 All Participants are hereby informed that the SMS alert facility has beenDate: April 22, 2009 enhanced for sending the alerts in respect of transfer of securities (i.e. debitto client account) on the same day for delivery instructions effected upto7.00 p.m. In respect of delivery instructions effected after 7.00 p.m., SMSalerts will be sent on the following day. Accordingly, the terms and conditionsare revised. The same are given in the Annexure and displayed on our websitewww.nsdl.co.inParticipants may inform their clients suitably.Circular No.Sub : Launch of SMS Alert Facility for Investors for Bonus and Sub-divison.<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, <strong>NSDL</strong>'s SMS Alert facility for2008/0042 demat account holders enables investors to receive alerts for debits (transfers)Date: June 5, 2008 to their demat accounts, credits in respect of IPO & offer for sale allotmentand for failed instructions due to insufficient balance.With effect from June 5, 2008, SMS Alert facility for demat account holdershas been further enhanced. Investors can now receive alerts in respect ofcredits pursuant to sub-division and bonus.The text of SMS alerts being sent to the account holders is as follows:Sub-division"___ sub-divided shares of ______ (Company Name/ISIN as the case may be)credited on "Execution date" to your demat a/c no xxxx5678. Check withyour DP or on IDEAS website if subscribed - <strong>NSDL</strong>"Bonus"___ shares of ______ (Company Name/ISIN as the case may be) credited on"Execution date" to your demat a/c no xxxx5678 in respect of Bonus. Checkwith your DP or on IDEAS website if subscribed - <strong>NSDL</strong>"The revised details of this facility and the terms & conditions thereof aregiven in the enclosed annexure.Circular No.Sub : Launch of SMS Alert Facility for Investors for failed debit instructions<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, <strong>NSDL</strong>’s SMS Alert facility for2008/0026 demat account holders enables investors to receive alerts for debits (transfers)Date: April 22, 2008 to their demat accounts and credits in respect of corporate actions for IPOand offer for sale.With effect from April 15, 2008, SMS Alert facility for demat account holdershas been further enhanced. Investors can now receive alerts in respect ofdebit instructions failed on account of insufficient balance (Rejection code3166E i.e. Cancelled Overdue Status).The text of SMS alerts being sent to the account holders is as follows:“Ur reqst for transfer of ______ (number of shares) shares of ____________(Company Name/ISIN as the case may be) from demat a/c no_________ (ClientID) on __________ (date, dd/mm/yy) has failed due to insuff bal. Contact urDP for details.<strong>NSDL</strong>”[ 231 ]
The revised details of this facility and the terms & conditions thereof aregiven in the enclosed annexure.Circular No.Sub : Regarding launch of SMS Alert Facility for Investors for credits<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, <strong>NSDL</strong> has launched SMS Alert2007/0058 facility for demat account holders whereby investors can receive alerts forDate: September debits (transfers) to their demat accounts. In continuation of <strong>NSDL</strong> Circular29, 2007 Nos. <strong>NSDL</strong>/POLICY/2007/0046 dated August 10, 2007 and <strong>NSDL</strong>/POLICY/2007/0053 dated September 21, 2007, all DPs are requested to note that SMS Alertfacility for demat account holders has been further enhanced wherein investorscan receive alerts for credits that have taken place in their demat accountsin respect of corporate actions for IPO and offer for sale. In such cases, thefollowing message is being sent to the account holders:“ ______ (number of shares) shares of ____________ (Company Name) creditedto your demat a/c no_________ (Client ID) on __________ (date, dd/mm/yy) in respect of Public Offer…<strong>NSDL</strong>”The revised details of this facility and the terms & conditions thereof aregiven in the enclosed annexure.Circular No.Sub : Communication to investors -Regarding launch of SMS Alert Facility<strong>NSDL</strong>/POLICY/for Investors2007/0053 As all Depository Participants (DPs) are aware, <strong>NSDL</strong> has launched SMS AlertDate: September 21, facility for demat account holders whereby investors can receive alerts for2007 debits (transfers) to their demat accounts. In continuation of <strong>NSDL</strong> CircularNo. <strong>NSDL</strong>/POLICY/2007/0046 dated August 10, 2007, all DPs are hereby advisedto note that SMS alert facility for demat account holders has further beenenhanced wherein cases of debits (transfers) for more than five ISINs, alertsare being sent with a message that debits for more than five ISINs have takenplace and that the investor can check the details with the DP or on IDeASwebsite, if the investor is an IDeAS subscriber. In such cases, the followingmessage is being sent to the account holders :“Securities of more than 5 companies (ISINs) debited from ur demat a/c No________ (Client ID) on __________ (date, dd/mm/yy). Check details withur DP or on IDeAS website if subscribed..<strong>NSDL</strong>”In order to create Client awareness and facilitate Clients to enroll for theSMS Alert facility, all DPs are advised to communicate the following messagealongwith the transaction statement sent to their Client accounts (Active orFrozen) for the month / quarter ended September 2007:“<strong>NSDL</strong> has launched SMS Alert facility for demat account holders wherebyinvestors can receive alerts for debits (transfers) to their demat accounts.Under this facility, investors can receive alerts for the debits (transfers) thathave taken place in their demat accounts, a day after the debit (transfer).The alerts are sent to those account holders who have provided their mobilenumbers to their Depository Participants (DPs) and DPs have activated such afacility in the computer system. These alerts are sent giving details, if thedebits (transfers) are up to five ISINs in a day. In case debits (transfers) arefor more than five ISINs, alerts are sent with a message that debits for morethan five ISINs have taken place and that the investor can check the detailswith the DP or on IDeAS website, if the investor is an IDeAS subscriber. Pleasecontact us for more information and enrollment for SMS Alert facility”[ 232 ]
Circular No.Sub : Launch of SMS Alert Facility for Investors<strong>NSDL</strong>/POLICY/All Participants are hereby informed that <strong>NSDL</strong> is making a soft launch of SMS2007/0046 Alert Facility from August 10, 2007 whereby a few investors on a pilot basisDate: August 10, 2007 will be able to receive alerts for debits (transfers) taking place in their demataccounts. The full fledged roll out of this facility for all investors will commenceon September 1, 2007. The details of this facility and the terms & conditionsthereof are given in the enclosed annexure.For those demat accounts where investors have intimated their mobile numbersto their Participants with a request for activating the SMS facility and theParticipant has accordingly captured the mobile number and enabled the SMSflag (ticked) in the DPM system, the SMS Alert Facility will be activated.Participants are requested to note that the mobile number captured in theDPM system should be a ten digit number with the first digit as "9".Participants are advised to maintain records of those Clients who have optedfor this facility. Those Clients who have given their mobile numbers to theirParticipants and do not wish to avail this facility may inform their Participants.Accordingly, the Participants should disable the SMS flag (untick).❑ ❑ ❑[ 233 ]
NOTES[ 234 ]
6. Internal Controls/Reporting to <strong>NSDL</strong>/SEBIa. GeneralRegulation 46Regulation 48Bye Law 6.3.6Bye Law 10.2.1.Every participant shall have adequate mechanism for the purposes ofreviewing, monitoring and evaluating the participant's internal accountingcontrols and systems.Every participant shall submit periodic returns to the Board and to everydepository in which it is a participant in the format specified by the Board orthe bye-laws of the depository, as the case may be.The Participant shall submit the following returns to the Depository:i. net worth certificate computed in a manner laid down in the BusinessRules duly certified by a Chartered Accountant on the annual auditedaccounts of the Participant;ii. In case the Participant is a clearing member of the clearing corporationof any exchange, the details regarding any suspension/termination ordefaults or any disputes in relation to its dealings with such clearingcorporation within two working days of such an event;iii. number of complaints received from Clients, their nature, status andmanner of redressal once every month;iv. number of transfers effected for off-market settlement of trades onceevery month.Each Participant shall furnish to the Depository every year, a copy of its auditedfinancial statement within six months from the end of the Participant's financialyear.Provided that when the Depository is satisfied that circumstances warrant anextension of time to furnish such report, it may grant such extension to theParticipant.Clause 16 of <strong>NSDL</strong>-DP AgreementRule 5.2.3The Participant shall comply with such accounting, audit, financialrequirements including requirements for submission of periodic returns on itsactivities in relation to <strong>NSDL</strong>, in such form and manner and within such timeperiod as may be specified in the Bye Laws and Business Rules.Each Participant shall conduct a review, at least annually, of its businessrelating to the operations of the Depository, which shall be reasonably designedto assist in detecting and preventing violation of and achieving compliance ofthe Bye Laws and Business Rules of the Depository.[ 235 ]
Alteration in Memorandum of Association (MOA) for permitting the Participant to undertakeDepository Participant activitiesCircular No.<strong>NSDL</strong>/POLICY/Sub: Alteration in Memorandum of Association (MOA) for permitting theParticipant to undertake Depository Participant activities2010/0083 All Participants are hereby informed that at the time of submitting applicationDate: July 22, 2010 for granting registration as a Participant, SEBI has advised Participants tosubmit relevant extract of MOA categorically permitting the applicant companyto undertake Depository Participant activities.SEBI’s Master Circular for DepositoriesIn view of the above, Participants are advised to examine their MOA andarrange to make necessary alteration in objects clause of MOA, if required.Circular No.Sub: SEBI’s Master Circular for Depositories<strong>NSDL</strong>/POLICY/Attention of Participants is invited to SEBI’s Master Circular no. CIR/MRD/DP/2010/0055 11/2010 dated April 6, 2010 (copy enclosed) for Depositories, which is aDate: May 19, 2010 compilation of all circulars issued by SEBI up to March 31, 2010. Participantsare advised to ensure compliance with the same.As regards point no. 1.7(h) of SEBI’s aforesaid Master Circular, Participantsare requested to refer <strong>NSDL</strong> procedure mentioned at point no. 5(iii)(c) of<strong>NSDL</strong> Master Circular no. <strong>NSDL</strong>/POLICY/2009/0082 dated September 9, 2009.Submission of Form-B in softcopy (through email).Circular No.Sub: Submission of Form-B in softcopy (through email).<strong>NSDL</strong>/POLICY/As all Participants are aware, Participants are required to submit Form B in2009/0070 paper form after it is duly signed by the authorized officials which containsDate: August 17, 2009 details about hardware & network equipments installed for <strong>NSDL</strong> DPM setupat the time of initial DPM Infrastructure set-up and subsequently as and whenthere are any changes in the Infrastructure set-up e.g. Change / Upgrade ofServer, Addition / removal of Desktop, Change in connectivity etc.All Participants are hereby informed that henceforth they can submit Form Bin electronic form by email to form-b@nsdl.co.in for faster and easiercommunication.In this context, Participants can choose one of the following options:1. Digitally Signed Emails using Class 2 or Class 3 DSC issued by recognisedCertifying Authorities or <strong>NSDL</strong> Certifying Authority.2. Scanned Form B.Explanation: Participants may generate the paper Form B, obtainauthorized officials signature, put their official stamp & scan the same.The original paper document can be retained by Participant for their[ 236 ]
ecord, whereas scanned image of Form B may be sent to <strong>NSDL</strong> byemail. Participants can also maintain the aforesaid record in electronicform.<strong>NSDL</strong>, after verification of submitted Form B, will send confirmation email tothe Participants email ID.Participants are also requested to take care of the size (not more than 2 MB)of the email as <strong>NSDL</strong> has enabled the restriction on the size of the emails. Incase the size of email is more than 2 MB, Participants are requested tosegregate the contents of such email into separate emails restricting the sizeof each email to 2 MB.In case of any further information/ clarification is required, Participants maycontact Mr.Sanjay Mirchandani/ Mr.Sankalp Parlia/ Mr.Ganesh Pawar/ Mr.RahulMehta/ Mr.Vikas Gorule on 24994454/ 4451/ 4447/ 4456/ 4455.Compliance Schedule for reports/ certificates by ParticipantsCircular No.Sub: Compliance Schedule for reports/ certificates by Participants<strong>NSDL</strong>/POLICY/All Participants are hereby informed that a "Compliance Schedule" for reports/2009/0066 certificates to be submitted by Participants based on various circulars issuedDate: July 28, 2009 from time to time is enclosed at Annexure to facilitate compliance byParticipants. Participants are requested to refer to Bye Laws and BusinessRules of <strong>NSDL</strong> and circulars issued thereunder for detailed guidance.AnnexureSr. No. Particulars Reference Deadline Manner of sending1. Investor GrievanceReport (Monthly)(i) Circular No. <strong>NSDL</strong>/PI/98/500dated October 6, 1998.(ii) Circular No. <strong>NSDL</strong>/PI/2004/1688 dated September 16,2004.By 10th ofthefollowingmonth.By email atdp_igreport@nsdl.co.in.Alternatively, by hardcopy to the InvestorRelationship Cell.2. ComplianceCertificate (July -December)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.January31st everyyear.By hard copy toBusiness PartnerInspection Department.3. Charge Structure. (i) Circular No. <strong>NSDL</strong>/POLICY/2006/0064 dated December26, 2006.(ii) Circular No. <strong>NSDL</strong>/POLICY/2007/0003 dated January 8,2007.April 30thevery year.By email atdpfees@nsdl.co.in[ 237 ]
Sr. No. Particulars Reference Deadline Manner of sending4. Internal/ ConcurrentAudit Report(October - March)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.May 15thevery yearBy hard copy toBusiness PartnerInspection Department.5. Details of all servicecentres.Circular No. <strong>NSDL</strong>/ POLICY/2007/0055 dated September 25, 2007.June 30thevery year.By email atservicecentreinfo@nsdl.co.in6. ComplianceCertificate (January- June)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.July 31stevery yearBy hard copy to BusinessPartner InspectionDepartment.7. Networth Certificateand AuditedFinancialStatements.Circular No. <strong>NSDL</strong>/PI/98/414dated September 1, 1998.September30th everyyear.By hard copy toParticipant InterfaceDepartment.8. Internal/ ConcurrentAudit Report (April -September)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.November15th everyyearBy hard copy to BusinessPartner InspectionDepartment.Written communication to <strong>NSDL</strong>Circular No.<strong>NSDL</strong>/PI/2005/1393Date : August 3, 2005Circular No.<strong>NSDL</strong>/PI/2002/1528Date : September 9, 2002Attention of Participants is invited to our circular no. <strong>NSDL</strong>/PI/2002/1528dated September 9, 2002, wherein Participants were advised to send all writtencommunication to <strong>NSDL</strong>, duly signed by its compliance officer or any seniorofficials mentioning the name and designation.However, it has been observed that a few Participants are not adhering to theabove circular even after repeated reminders to them.In view of the foregoing, <strong>NSDL</strong> would like to advise the Participants to strictlyensure compliance of the above circular failing which any correspondencereceived from the Participants would not be acted upon by <strong>NSDL</strong>.<strong>NSDL</strong> has been receiving letters from Participants without mentioning thename and designation of the person who has written the letter. Such lettersare being signed by an Authorised Signatory.In this regard, all Participants are hereby informed that all communicationsto <strong>NSDL</strong> should be written either by the Compliance Officer or by any othersenior official of the Participant, clearly mentioning the name & designationof such person.All Participants are further advised to provide details of their existingCompliance Officers alongwith their specimen signatures, as per the formenclosed, latest by September 20, 2002. In case of change of ComplianceOfficer, Participants are advised to inform <strong>NSDL</strong> by submitting the enclosed[ 238 ]
Compliance Officer detailsform alongwith a letter signed by the existing Compliance Officer of theParticipant or by any other official (e.g. Director of the company, Head ofthe Depository operations, etc.) senior to the Compliance Officer.Circular No.Sub : Compliance Officers details<strong>NSDL</strong>/PI/2005/2550 All Participants are hereby informed that <strong>NSDL</strong> is in the process of updatingDate : December 29, the details pertaining to compliance officers of Participants. In this regard,2005 Participants are advised to provide the details alongwith their specimensignatures, as per the enclosed format, latest by January 7, 2006 as well assend a soft copy of the same at participant-interface@nsdl.co.inIn case of change of Compliance Officer, Participants are advised to inform<strong>NSDL</strong> by submitting the enclosed form alongwith a letter signed by the existingCompliance Officer of the Participant or by any other senior official (e.g.Director of the company, Head of the Depository operations, etc.).AnnexureDetails of the Compliance OfficerDateName of the ParticipantDP IdAddress - Row 1 -Building/Tower/Chamber/MansionAddress Row 2 - Street/RoadAddress Row 3 - Area NameAddress - City NameAddress - Pin CodeTelephone CodeBoard Tel NosBoard Fax NosName of Compliance OfficerDesignationSpecimen SignatureDirect Tel NoExtension noMobile numberEmail Address of compliance officerAlternate Compliance Officer (if any)DesignationSpecimen SignatureDirect Tel NoExtension no[ 239 ]
Mobile numberEmail Address of alternatecompliance officerPlease note that all fields aremandatoryParticipant SealSubmission of Compliance Certificate by ParticipantsCircular No.Sub: Submission of internal/concurrent audit report and Compliance<strong>NSDL</strong>/POLICY/Certificate electronically.2010/0017 As Participants are aware, the internal/concurrent audit report and theDate: February 22, 2010 compliance certificate are required to be given by Participants in hard copyform [Ref.: Circular no.: <strong>NSDL</strong>/POLICY/2009/0105 dated November 10, 2009and Circular no. <strong>NSDL</strong>/POLICY/2008/0077 dated November 3, 2008].Participants can now submit the internal/concurrent audit report and theCompliance Certificate, if they so desire, in electronic form subject to theconditions mentioned in the Annexure 'A'.Accordingly, the 'Compliance Schedule' informed to Participants vide CircularNo. <strong>NSDL</strong>/POLICY/2010/0006 dated January 13, 2010 is revised and enclosedas Annexure 'B' highlighting the changes and as Annexure 'C' without highlightingany changes.Annexure AProcedure for electronic submission of Internal/Concurrent audit reportand Compliance certificate:1. Internal / Concurrent Audit Report1.1. The auditors must sign the report using a class II or class III digitalsignature certificate (DSC) issued in his/her name and valid interms of provisions of Information Technology Act, 2000 and rulesframed there under.1.2. Audit report must be prepared in MS Excel format as per prevalentguidelines (Ref.: Circular No. <strong>NSDL</strong>/POLICY/2009/0105 datedNovember 10, 2009). Annexures, if any, must also be prepared inMS Excel format.1.3. The auditor may digitally sign the report using the featuresavailable in MS Excel itself. Annexures, if any, may be part of thesame file (as different sheet in same file) or may be prepared asa separate Excel file. In case Annexures are prepared as separateExcel file, they need to be digitally signed individually.2. Compliance Certificate2.1. The Compliance Officer / Alternate Compliance Officer of theParticipant must sign the compliance certificate using a class II orclass III DSC issued in his/her name and valid in terms of provisionsof Information Technology Act, 2000 and rules framed thereunder.2.2. Compliance certificate may be prepared as a MS Excel or MS Wordor PDF file as per prevalent guidelines (Ref.: Circular No. <strong>NSDL</strong>/POLICY/2006/0023 dated July 6, 2006). Annexures, if any, shouldalso be prepared as MS Excel or MS Word or PDF file.2.3. The Compliance Officer / Alternate Compliance Officer maydigitally sign using the features available in MS Excel / Word orsome other specialized software. Annexures, if any, may be partof the same file or may be prepared as a separate Excel / Word /[ 240 ]
Sr.No.1. Investor GrievanceReport (Monthly)PDF file. In case, Annexures are prepared as a separate file(s),they need to be digitally signed individually.3. The holder of the DSC shall give following declaration as part of theaudit report/compliance certificate -“I hereby declare that digital signature certificate being used by mefor signing this document is a valid digital signature certificate interms of provisions of Information Technology Act, 2000 and rulesframed thereunder on this date and that it has not been revoked bythe issuing authority till this date.”4. The Compliance Officer / Alternate Compliance Officer / authorisedperson of Participant shall forward the digitally signed audit reportand/or certificate (and Annexures, if any) to <strong>NSDL</strong> from an email IDwhich is present in the database maintained by Participant InterfaceDepartment of <strong>NSDL</strong> to nsdl-bp-inspection@nsdl.co.in.Annexure BParticulars Reference Deadline Manner of sending2. ComplianceCertificate (July -December)(i) Circular No. <strong>NSDL</strong>/PI/98/500dated October 6, 1998.(ii) Circular No. <strong>NSDL</strong>/PI/2004/1688 dated September 16,2004.Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.3. Charge Structure. (i) Circular No. <strong>NSDL</strong>/POLICY/2006/0064 dated December 26,2006.(ii) Circular No. <strong>NSDL</strong>/POLICY/2007/0003 dated January 8,2007.4. Internal/Concurrent AuditReport (October -March)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.By 10th of thefollowingmonth.January 31stevery year.April 30thevery year.May 15thevery yearBy email atdp_igreport@nsdl.co.in.Alternatively, by hardcopy to the InvestorRelationship Cell.Digitally signedcompliance certificateby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.By email atdpfees@nsdl.co.inDigitally signed reportby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.5. ComplianceCertificate(January - June)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.July 31stevery yearDigitally signedcompliance certificateby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.[ 241 ]
Sr.No.Particulars Reference Deadline Manner of sending6. NetworthCertificate andAudited FinancialStatements.Circular No. <strong>NSDL</strong>/PI/98/414 datedSeptember 1, 1998.September30th everyyear.By hard copy toParticipant InterfaceDepartment.7. Internal/Concurrent AuditReport (April -September)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.November15th everyyearDigitally signed reportby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.Sr.No.1. Investor GrievanceReport (Monthly)Annexure CParticulars Reference Deadline Manner of sending(i) Circular No. <strong>NSDL</strong>/PI/98/500dated October 6, 1998.(ii) Circular No. <strong>NSDL</strong>/PI/2004/1688 dated September 16,2004.By 10th of thefollowingmonth.By email atdp_igreport@nsdl.co.in.Alternatively, by hardcopy to the InvestorRelationship Cell.2. ComplianceCertificate (July -December)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.January 31stevery year.Digitally signedcompliance certificateby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.3. Charge Structure. (i) Circular No. <strong>NSDL</strong>/POLICY/2006/0064 dated December 26,2006.(ii) Circular No. <strong>NSDL</strong>/POLICY/2007/0003 dated January 8,2007.April 30thevery year.By email atdpfees@nsdl.co.in4. Internal/Concurrent AuditReport (October -March)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.May 15thevery yearDigitally signed reportby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.5. ComplianceCertificate(January - June)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.July 31stevery yearDigitally signedcompliance certificateby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.[ 242 ]
Sr.No.Particulars Reference Deadline Manner of sending6. NetworthCertificate andAudited FinancialStatements.7. Internal/Concurrent AuditReport (April -September)Circular No. <strong>NSDL</strong>/PI/98/414 datedSeptember 1, 1998.Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.September30th everyyear.November15th everyyearBy hard copy toParticipant InterfaceDepartment.Digitally signed reportby email at nsdl-bpinspection@nsdl.co.in.Alternatively, by hardcopy to BusinessPartner InspectionDepartment.Circular No.Sub : Submission of Compliance Certificate by Participants<strong>NSDL</strong>/POLICY/As all Participants are aware, as SEBI registered Intermediaries, Participants2006/0023 are required to comply with the following:Date : July 6, 2006 (i) The Depositories Act, 1996, SEBI (Depositories and Participants)Regulations, 1996, Guidelines / Directives / Instructions issued by SEBI,the Government of India and other Regulatory Bodies from time to time;(ii) The Bye Laws & Business Rules and various circulars issued by <strong>NSDL</strong>,from time to time.Further, Participants are required to comply with the provisions of Preventionof Money Laundering Act, 2002 and the rules and guidelines issued, thereunder.In this regard, Participants are advised to submit a 'Compliance Certificate'to <strong>NSDL</strong> in the format given in Annexure I, duly signed and stamped by theCompliance Officer of the Participant, at half yearly intervals (January toJune and July to December to be submitted by July 31 and January 31 ofevery year respectively).Annexure I(To be provided on DP's letterhead)Date:___________ToThe Vice PresidentBusiness Partner Inspection DepartmentNational Securities Depository LimitedTrade World, A Wing, 5th floorKamala Mills CompoundSenapati Bapat MargLower ParelMumbai - 400 013.Dear Sir,Sub : Compliance Certificate for the period _______ to ________I ________________ (name of the Compliance Officer) hereby certify thatthe depository operations of ___________________ (DP Name and DP Id) arein compliance with all applicable laws and especially with respect to thefollowing:(a) The Depositories Act, 1996;(b) The SEBI (Depositories and Participants) Regulations, 1996;(c) The Bye Laws and Business Rules of <strong>NSDL</strong>.(d) Directives / Circulars / Clarifications / Guidelines issued by SEBI, theGovernment of India, Regulatory Bodies and <strong>NSDL</strong>, from time to time.[ 243 ]
(e) Prevention of Money Laundering Act, 2002 and the Rules and Guidelinesnotified thereunder by SEBI or Statutory / Regulatory Authorities.Activities in which the company has not been in Compliance, if any, are asunder:a)b)c)d)In respect of the areas of non- compliance, the following steps have beentaken so as to ensure compliance in future.a)b)c)d)Name and Designation of Compliance Officer :Signature of Compliance Officer :DP Id :Stamp of the DP :Acknowledgment by <strong>NSDL</strong> for submission of Compliance reports by Depository ParticipantsCircular No.Sub : Acknowledgment by <strong>NSDL</strong> for submission of Compliance reports by<strong>NSDL</strong>/POLICY/Depository Participants2006/0050 Depository Participants (DPs) are required to submit various reports such asDate : October 19, Internal Audit, Concurrent Audit, Investor Grievances, KYC, Compliance2006 certificates etc. to the different departments of <strong>NSDL</strong> to meet the respectivecompliance requirements. In this regard, DPs are requested to note that witheffect from November 1, 2006, the recipient department of <strong>NSDL</strong> will give anacknowledgment about the receipt of the report(s) at the email address ofthe Compliance Officer.In view of the above, DPs are requested to submit the email id(s) of theCompliance Officer, if not submitted earlier or if there are any changes atparticipant-interface@nsdl.co.in (Refer Circular No. <strong>NSDL</strong>/PI/2005/2550 datedDecember 29, 2005).Format for filing charge structureCircular No. Sub : Format for filing charge structure with <strong>NSDL</strong> every year by April 30<strong>NSDL</strong>/POLICY/Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/2007/0003 PI/2006/0064 dated December 26, 2006 (copy enclosed) regarding filing ofDate: January 8, 2007 charge structure with <strong>NSDL</strong> and penalty therefor in case of non-compliance.The details of charge structure should be provided as per the enclosed format(in MS Excel) and e-mailed to <strong>NSDL</strong> at dpfees@nsdl.co.inFurther, any subsequent changes (addition/deletion/modification) in thecharge structure of the DP should also be intimated to <strong>NSDL</strong> in the aboveformat, at the above e-mail Id before such changes become effective.AnnexureDP Statutory Advance/ Account Demat Remat Transaction Pledge Pledge Pledge Pledge Pledge Failed Other RemarksName charges Deposit Maintenance (Debit) Creation Creation Closure Closure Invo- instru- charges,at the confir- confir- cation ction if anytime of mation mation chargesaccountopening[ 244 ]
Audited networth certificate - Financial statementCircular No.Sub: Amendments to Bye Laws<strong>NSDL</strong>/POLICY/All Participants are hereby notified that Bye Law 6.2.1 (iv) and Bye Law2009/0084 10.2.1 of the Bye Laws of <strong>NSDL</strong> have been amended. The amended Bye LawSeptember 16, 2009 6.2.1 (iv) and Bye Law 10.2.1 are given below:(Relevant Extracts) Amended Bye Law 6.2.1 (iv):The Participant (both prospective and existing) in the category of stock brokerhas a minimum networth of rupees three crore. Provided further that in caseof non-banking finance company (NBFC) and a registrar to an issue or sharetransfer agent, minimum networth as specified in the SEBI Regulations willapply.Provided, however, that if the Participant is already acting as a Participanton March 14, 2008, it will be required to fulfill this requirement by March 31,2010.Circular No.All Participants are hereby notified that Rules 21.1.1 (i), 21.2.2.1 (i), (iii) &<strong>NSDL</strong>/PI/2003/1979 (iv) of the Business Rules of <strong>NSDL</strong> have been amended and will come intoDate : December 11, effect from January 1, 2004. Further, Annexure A pertaining to computation2003 of networth has also been amended. The revised Rules 21.1.1 (i), 21.2.2.1(Relevant Extracts) (i), (iii) & (iv) and Annexure A are enclosed.Annexure 'A' of the Business Rules of <strong>NSDL</strong>:COMPUTATION OF NETWORTHSr. Particulars Current PreviousNo Year (Rs.) Year (Rs.)Paid-up Capital +Free Reserves - ShareApplication Money (totalreserves less RevaluationReserves andSpecified Reserves)Less:A Accumulated LossesB Receivable (more than6 months old)C Receivable from GroupCompaniesD Intangible AssetsE Preliminary and Preoperativeexpenses not written offF Value of Stock Exchange CardG Loan in excess of value ofPledged SecuritiesH Loan in excess of valueof Pledged AssetsI Investment in Group CompaniesJ Networth required forother depositoriesK Loans and advancesto group CompaniesL StatutoryContingent Liabilities[ 245 ]
Notes:1. Details of item mentioned under Sr. no. C, F, G, H, I, K and L shall beprovided as annexure to the certificate.2. In case of statutory contingent liabilities, only 50% of the liabilitiesshall be deducted.3. In case of Bank DPs, if provisions for NPAs have been made as per RBIguidelines and Auditor's certificate to this effect has been provided, nodeduction to be made for receivables more than six months old.4. Security-wise details of all investments (quoted as well as unquotedsecurities) shall be provided as annexure to the certificate.The applicant for Participantship should submit a certificate of Net worthcomputed in accordance with these guidelines from the Chartered Accountantin the following format:CERTIFICATE FOR PARTNERSHIP FIRMSThis is to certify that the Networth of M/sas onas per the statement of computation of even dateannexed to this report is Rupeesonly.It is further certified that the computation of Networth based on my/ ourscrutiny of the books of accounts, records and documents is true and correctto the best of my/our knowledge and as per information provided to my/oursatisfaction.Place:Date:For (Name of Accounting Firm)Name of PartnerChartered AccountantMembership NumberCERTIFICATE FOR INDIVIDUALSThis is to certify that the Networth of Mr/Msasonas per the statement of computation of evendate annexed to this report is Rupeesonly.It is further certified that the computation of Networth based on my/ ourscrutiny of the books of accounts, records and documents is true and correctto the best of my/our knowledge and as per information provided to my/oursatisfaction.Place:Date:For (Name of Accounting Firm)Name of PartnerChartered AccountantMembership Number[ 246 ]
CERTIFICATE FOR CORPORATESThis is to certify that the Networth ofas onas per the statement of computationof even date annexed to this report is Rupeesonly.It is further certified that the computation of Networth based on my/ ourscrutiny of the books of accounts, records and documents is true and correctto the best of my/our knowledge and as per information provided to my/oursatisfaction.Place:Date:For (Name of Accounting Firm)Name of PartnerChartered AccountantMembership NumberOff-market transactions reportCircular No.Attention of the Participants is invited to Bye Law 6.3.6 (iv) of <strong>NSDL</strong>, in terms<strong>NSDL</strong>/PI/98/002 of which the Participants are required to submit a return pertaining to theDate: January 1, 1998 number of transfers effected for off-market settlement of trades once everymonth. Since such information is available at the DM in the electronic form,the Participants need not submit the same in a paper form separately. <strong>NSDL</strong>,however, reserves the right to call for such information from the Participantsat any point of time.b. Internal / Concurrent AuditBye Law 10.3.1Every Participant shall ensure that an internal audit in respect of its depositoryoperations is conducted at intervals of not more than six months by a qualifiedChartered Accountant or a Company Secretary or a Cost and ManagementAccountant, holding a Certificate of Practice and a copy of the internal auditreport shall be furnished to the Depository.Bye Law 10.3.4The Chartered Accountants, Company Secretaries or Cost and ManagementAccountants who are engaged in Internal Audit or Inspection of the Participantin respect of its depository operations, should not have any conflict of interestwith the said Participant.Circular No.Subject: Internal and Concurrent Audit for depository operations.<strong>NSDL</strong>/POLICY/Participants are aware that as per Bye Law 10.3, each Participant is required2009/0105 to have its depository operations audited by a qualified Chartered AccountantDate: November 10, or a Company Secretary or a Cost and Management Accountant holding a2009 Certificate of Practice. Such audit should be conducted atleast twice a yearand a copy of the report should be submitted to <strong>NSDL</strong>.Attention of all Participants is invited to Circular no. <strong>NSDL</strong>/POLICY/2008/0077 dated November 3, 2008 regarding guidelines related to scope of auditand format of the audit report. Since then, there have been certain additions/ modifications in the guidelines.In view of the above and findings during review of audit reports submitted byParticipants, various requirements related to internal and concurrent audithave been consolidated for the benefit of Participants and their auditors.The consolidated guidelines are enclosed as Annexure 1 (a MS – Excel filecontaining two sheets). Participants are advised to take note of the following:[ 247 ]
1. Objectives of auditFollowing are the broad objectives of internal audit of depositoryoperations:i) To assure the management that the operations of the Participantare in compliance with the requirements of The Depositories Act,1996, SEBI (Depositories & Participants) Regulations, 1996, <strong>NSDL</strong>Bye Laws and Business Rules, its agreement with the Client and<strong>NSDL</strong> and various circulars issued by <strong>NSDL</strong> from time to time.ii) To assure management that the DPM is managed and maintainedin a manner that there is no threat to business continuity, integrityof data processing system is maintained at all times and methodsare put in place to ensure that records are not lost, destroyed ortampered with or in the event of loss or destruction of data,sufficient backup of records is available at all times.iii) To assure management that the capacity of computer system,staff strength and internal procedures are commensurate withthe level of business activity.iv) To assure management that the business operations of theParticipant are conducted in a manner that the foreseeable risksare addressed with appropriate internal control mechanism.v) To assure management that the business operations of theParticipant are conducted as per the operations manual and instrict adherence with <strong>NSDL</strong> prescribed procedures.2. Audit program should cover all facets of the depository operations.Auditor may expand the scope of audit / add more audit points toachieve the objectives listed above. Participants are advised to extendfull co-operation to their auditors to enable them to perform an effectiveaudit. All circulars / guidelines issued by <strong>NSDL</strong> / SEBI from time to timeand other information / records desired by the auditors should be madeavailable to them within a reasonable time.3. Participants should submit the audit report to <strong>NSDL</strong> as per schedulegiven below:Audit PeriodDue date for submission of reportto <strong>NSDL</strong>April 1 to September 30 November 15October 1 to March 31 May 154. New Participants which are operational for less than three months in anaudit period can submit audit report for that audit period along withthe audit report for next audit period. For example, if a Participant ismade operational by <strong>NSDL</strong> on July 2, 2009, then it can submit singleaudit report for the period July 2, 2009 – March 31, 2010.5. As prescribed vide Circular no. <strong>NSDL</strong>/POLICY/2006/0021 dated June24, 2006, activities related to account opening, control and verificationof Delivery Instruction Slips (DIS) are subject to concurrent audit whichmust be completed by the next working day. If such audit cannot becompleted by next working day due to large volume, it must becompleted within a week. The guidelines provided in Annexure 1 inrespect of these activities are applicable for concurrent audit as well.6. Participants can appoint same auditor for concurrent and internal audit.If both audits are performed by the same auditor, then a consolidatedreport must be submitted instead of two separate reports. If two auditsare being performed by different auditors, then two separate reportsshould be submitted.[ 248 ]
7. The guidelines provided in this circular are applicable for audit periodOctober 1, 2009 to March 31, 2010 and onwards. Audit report for periodApril 1, 2009 to – September 30, 2009 may be submitted as per existingguidelines (i.e. guidelines provided in Circular no. <strong>NSDL</strong>/POLICY/2008/0077 dated November 3, 2008) or as per the new guidelines provided inthis circular.8. Internal and/or concurrent audit reports which are not as per guidelineswill be treated as non submission of the report. <strong>NSDL</strong> reserves the rightto advise a Participant to change its auditor if quality of the report isnot satisfactory or if the audit is not carried out as per the guidelines.9. A training program will be conducted for internal / concurrent auditorsby <strong>NSDL</strong> shortly. Schedule and details of the program will becommunicated to the Participants. Participants may request theirauditors to take benefit of the training program.10. Participants may encourage their auditors to acquire certificationunder NCFM – <strong>NSDL</strong> Depository Operations module.Annexure 1Internal / Concurrent Audit Report for depository operationsName of the auditeeDP ID(s)INXXXXXXXXAudit periodName of the auditorMembership No. of the auditorINXXXXXXXXDD-MMM-YY to DD-MMM-YYName of the audit firmI / We hereby declare that Circular no. <strong>NSDL</strong>/Policy/2009/0105 datedNovember 10, 2009 was read, understood and this report is based on theguidelines given in this Circular. I / We hereby further declare that I / wehave no conflict of interest with the Participant.Signature of the auditorStamp of the auditor / audit firmDateDD-MMM-YYActivity wise sampling detailsSrl. no. Area Count for the No. of samplesaudit period checked1 Account Opening (100%)2 Demat requests3 Remat requests4 DIS book issuance (100%)5 DIS execution (atleast 25%)6 Transmission (100%)7 Client data modifications8 Pledge / hypothecation instructions[ 249 ]
ChecklistSrl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*1 Audit of Account Opening1.1 Whether proof of identity and proof ofaddress have been obtained for allaccounts as per SEBI and <strong>NSDL</strong> guidelines?1.2 Whether PANs are obtained for all theaccounts, wherever applicable?1.3 Whether PANs are verified with thedatabase of Income Tax Department forall the accounts?1.4 Whether the in- person verification ofthe account holders has been donebefore activation of the account as perthe <strong>NSDL</strong> guidelines?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ NoIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned here1.5 Whether prescribed DP - Clientagreement has been executed for all theaccounts?1.6 Whether a separate DP - Clientagreement has been executed withclients who want to hold warehousereceipts in their account?1.7 Whether data entered in DPM systemmatches with the details mentioned inthe account opening form?1.8 Whether signature of account holder(s)as given in the account opening form hasbeen scanned in the DPM system clearlyand correctly?1.9 Whether all account opening forms arecompletely filled?2 Client Data Modification2.1 Whether clients' request for changes indata (e.g. address, signature, bankdetails, nomination) have been processedas per prescribed procedure?2.2 Whether clients' request for closure /freezing / unfreezing of account havebeen processed as per prescribedprocedure?❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicableIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then number ofaccounts with discrepanciesshould be mentionedIf no, then number ofaccounts with discrepanciesshould be mentioned[ 250 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*3 Demat / remat request3.1 Whether the demat requests have beenaccepted and processed as per theprescribed procedure?❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned here3.2 Whether date of receiving the dematrequest and date of forwarding thedocuments to Issuer / Registrar &Transfer Agent have been recordedcorrectly?❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned here3.3 Whether demat requests received havebeen sent to Issuer / Registrar & TransferAgent within seven days from the dateof receipt of the request from theaccount holder?❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned here3.4 Whether there are sufficient provisions/ arrangements for safe keeping ofsecurity certificates received fromaccount holders for dematerializationand certificates received after rejectionof the demat request from Issuer /Registrar & Transfer Agent?❏ Yes ❏ No3.5 Whether any demat request was rejecteddue to error attributable to Participant?❏ Yes ❏ No3.6 Whether Participant has taken necessarycorrective and preventive measures toavoid rejections attributable toParticipants?❏ Yes ❏ No❏ NotApplicable3.7 Number of remat request processedduring the audit period3.8 Whether the remat requests have beenaccepted and processed as per theprescribed procedure?❏ Yes ❏ No❏ NotApplicable4 Delivery Instruction Slip (DIS)4.1 Issuance of DIS4.1.1 Whether physical inventory of DISbooklets is reconciled with the DIS issuerecords periodically?❏ Yes ❏ No4.1.2 Whether the DIS issued to client has prestampedclient ID and pre-printed uniqueserial number?❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned here4.1.3 Whether DIS booklets have been issuedon receipt of requisition slips signed byall the joint holders?❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned here[ 251 ]
Srl.No.Audit Areas4.1.4 Whether issuance of loose DIS to accountholder is done as per prescribedprocedure?Auditor'sObservation❏ Yes ❏ NoAuditor's RemarksIf no, then number of caseswith discrepancies must bementioned hereManagement'sComment*4.1.5 If DIS booklet is handed over to theauthorized person other then accountholder, then whether the signature ofauthorized person and his proof ofidentity are verified before issuance ofDIS booklet?4.1.6 Whether DIS (booklet or loose) issued toaccount holder is immediately updatedin back office or issuance register?4.2 Verification of DIS4.2.1 Whether date and time stamp is affixedon both Participant and client copy ofDIS received?4.2.2 Whether Participant affixes 'late stamp'on DIS received beyond the prescribeddeadline time?4.2.3 Whether Participant verifies that the DISreceived from client was actually issuedto same client ID?4.2.4 Whether serial number of all theexecuted DISs (irrespective of whetherexecuted through back office or directlyin DPM system) and DISs reported as lost/ misplaced / stolen by the accountholder are blocked in the back office orin the DIS issuance register to preventany re-acceptance?4.2.5 Whether DIS(s) given by account holderare available for all instructions executedin DPM system (instruction other thanthose given by account holders throughSpeed-e / electronically)?4.2.6 Whether signature(s) on DIS match withthe signature(s) scanned in the DPMsystem?4.2.7 Whether corrections / cancellation onDIS, if any, are authenticated by theclient (all holders for joint accounts)?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned here[ 252 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*4.2.8 Whether Participant accepts instructionsby fax from account holder?4.2.9 Whether original DIS has been receivedwithin three working days for all faxedinstructions?4.2.10 Is there a system in place to preventmultiple execution of the sameinstruction, in case fax instructions areaccepted?4.2.11 Whether Participant has obtained anindemnity from account holder who wantto give instruction over fax?4.2.12 If Participant is accepting deliveryinstruction in form of an annexure to aDIS, whether it is done as per theprescribed procedure?4.2.13 Whether information under columns“Consideration” and “Reason / Purpose”are mentioned for off marketinstructions?4.2.14 Whether Participant follows maker -checker system to process theinstructions?4.2.15 Whether there is an additional level ofverification for high value instructions(instruction with value over Rs. 5 lakhs)?4.2.16 Whether there is an additional level ofverification for instructions received fordormant accounts?4.2.17 Whether instructions executed in theDPM system are as per DIS?5 Transaction Statement5.1 Whether transaction statements aregenerated from back office or DPMsystem?5.2 If generated from back office, whetherthe details match with statementgenerated from DPM system?❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Backoffice❏ DPMsystem❏ Yes ❏ NoIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned hereIf no, then number of caseswith discrepancies must bementioned here[ 253 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*5.3 Whether transaction statements areprovided to the account holders as perprescribed frequency?5.4 If Participant does not send transactionstatement on quarterly basis to clientsholding account with no transaction andno security balance, then whether therelevant guidelines have been followed?5.5 If Participant is sending transactionstatement through internet (web based/ email), then whether the relevantguidelines have been followed/❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicableIf no, then the periodicity ofproviding the statementmust be mentioned6. Compliance under Prevention of Money Laundering Act, 2002 (PMLA)6.1 Whether Participant has adopted a policyto comply with its obligations underPMLA?6.2 Whether Participant has appointed a‘Principal officer’ as required underPMLA?6.3 Whether there is a mechanism to dealappropriately with the alerts forwardedby <strong>NSDL</strong>?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No7. Operations Manual7.1 Whether Participant has prepared aOperations Manual?7.2 Whether Operations Manual covers alldepository activities?7.3 Whether Operations Manual is updatedas and when required?7.4 Whether Operations Manual is availableto persons who need to refer it?7.5 Whether procedures mentioned in theOperations Manual are followed?8. Maintenance of record and documents8.1 Whether Participant has outsourcedrecord keeping activity (partly or fully)?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ NoIf no, then the periodicity ofproviding the statementmust be mentionedIf no, then mention theareas not covered inoperations manualIf no, then mention when isit updatedIf no, then mention how isthe work done by thosepersonsIf no, then give details hereIf yes, then the name of theagency / firm and nature ofarrangement must bementioned here[ 254 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*8.2 If yes, whether <strong>NSDL</strong>'s approval has beenobtained?8.3 Whether Participant has informed <strong>NSDL</strong>about place(s) of record keeping?❏ Yes ❏ No❏ Yes ❏ No9 Service centre9.1 Whether <strong>NSDL</strong>’s approval has beenobtained for all the service centresopened during the audit period?9.2 Whether prescribed procedure has beenfollowed for any service centre closed /terminated during the audit period?9.3 Whether contact details of all the servicecentres available on the <strong>NSDL</strong> websiteare correct?9.4 Whether NCDO / NCFM - DepositoryModule qualified person is appointed ateach service centres?9.5 Whether internal audit has beenconducted at any service centre?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ NoIf no, then details of noncompliance must bementioned hereIf no, then details of noncompliance must bementioned hereIf no, then details of noncompliance must bementioned hereIf no, then details of noncompliance must bementioned hereIf yes, then mention countof centres audited andlocations thereof.10 Status of compliance for deviations / observations noted in latest <strong>NSDL</strong> inspection and internal/ concurrent audit report10.1 Whether Participant has taken adequatepreventive and corrective measures inrespect of deviations noted during latest<strong>NSDL</strong> inspection?10.2 Whether Participant has taken adequatepreventive and corrective measures inrespect of deviations noted during latestinternal / concurrent audit?10.3 Comment on the issues for which <strong>NSDL</strong>has specifically sought auditor'scertification in audit report11 Billing11.1 Whether all account holder are billed asper the agreed schedule of charges?11.2 Whether Participant has given atleastone month's prior notice for anymodification in the schedule of charges?❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicableIf no, then details of the noncompliance must bementioned hereIf no, then details of the noncompliance must bementioned hereIf no, then details of the noncompliance must bementioned here[ 255 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*12 Back Office12.1 If Participant is using any back officesoftware for depository operations, thenwhether balances as per back office arereconciled on a daily basis with DPMsystem?❏ Yes ❏ No13 Miscellaneous areas13.1 Whether all transmission cases have beenprocessed as per prescribed procedure?13.2 Whether there is any supplementaryagreement / letter of confirmation /power of attorney obtained / executedwith account holder which are incontravention to prescribed DP - Clientagreement / <strong>NSDL</strong> guidelines?13.3 Whether Participant has collectedrequisite documents to claim waiver ofsettlement fees?13.4 Whether pledge and hypothecationinstructions are processed as perprescribed procedure?13.5 Whether Participant has executedsoftware utilities provided by <strong>NSDL</strong> on amonthly basis and taken appropirateaction in respect of the exceptionsidentified?13.6 Whether all investors' grievances havebeen redressed?13.7 Whether forms in use for variousactivities are as prescribed?13.8 Comment on improvements made in theoperations since last audit14 System areas14.1 Whether hardware and software installedon machines used for depositoryoperations are as per the specificationsmentioned in the latest Form B submittedto <strong>NSDL</strong>?❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ Yes ❏ NoIf no, then number ofaccounts with discrepanciesmust be mentioned hereIf no, then give details ofgrievances pending redressalhereIf no, then mention theforms and the discrepanciesobserved therein.If no, then mention themismatch[ 256 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*14.2 Whether Participant is taking backup ona daily basis?❏ Yes ❏ No14.3 Whether one copy of data backup ismaintained at local site and another atremote site?❏ Yes ❏ No14.4 Whether a separate set of backup mediafor even / odd dates (or day wise) ismaintained to ensure that corruption ofone media does not result in loss of allbackups for that day?❏ Yes ❏ No14.5 If backup is taken on a media other thanDAT, <strong>NSDL</strong>'s approval for this has beenobtained?❏ Yes ❏ No14.6 Whether updated anti virus is installedon the server and all the client machines?❏ Yes ❏ No14.7 Whether ASR set / ERD is prepared asper prescribed guidelines?❏ Yes ❏ No14.8 Whether robocopy feature is working onone client machine?❏ Yes ❏ No14.9 Whether all the software installed onserver and client machines are licensed?❏ Yes ❏ No14.10 Whether RAID has been configured as perthe prescribed guidelines?❏ Yes ❏ No14.11 Whether database reorg and shrinkingare done as per the prescribedguidelines?❏ Yes ❏ No14.12 Whether scheduled switch to fallbackconnectivity is done and the recordthereof is maintained?❏ Yes ❏ No14.13 Whether all the hardware / equipmentsused for depository operations arecovered under AMC / warranty?❏ Yes ❏ NoIf no, then mention whetherthe Participant has given thepresribed undertaking to<strong>NSDL</strong>?14.14 Whether UPS / alternate powerarrangement is available for all thehardware / equipments used fordepository operations?❏ Yes ❏ No[ 257 ]
Srl.No.Audit AreasAuditor'sObservationAuditor's RemarksManagement'sComment*14.15 Whether adequate physical and logicalaccess restrictions for usage of systemare in place?14.16 Whether backup of back office data istaken?14.17 If back office is directly connected toDPM system, whether it is in accordancewith <strong>NSDL</strong> guidelines?14.18 Whether atleast one staff managing thesystems is <strong>NSDL</strong> trained?❏ Yes ❏ No❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ No❏ NotApplicable❏ Yes ❏ NoImportant References (only illustrative,not exhaustive) -1 <strong>NSDL</strong> Bye Laws and Business Rules2 Compliance Manual3 Circular No. <strong>NSDL</strong>/POLICY/2009/0029dated April 16, 2009- Master Circular on'Account Opening' - Version 2.24 Circular No. <strong>NSDL</strong>/POLICY/2009/0082dated September 09, 2009- MasterCircular on 'Delivery Instruction Slip ' -Version 1.05 Other circulars issued by <strong>NSDL</strong> time totimeManagement's Comment* - Manadatory if auditor's observation is negative.Circular No.Sub: Internal and Concurrent Audit for depository operations.<strong>NSDL</strong>/POLICY/ Attention of all Participants is invited to recent amendment in Bye Law 10.32008/0077 of <strong>NSDL</strong> communicated vide circular no. <strong>NSDL</strong>/POLICY/2008/0072 datedDate: November 3, October 17, 2008 which prescribes that every Participant shall ensure that its2008 depository operations are audited by a qualified Chartered Accountant or aCompany Secretary holding a Certificate of Practice. Such audit should beconducted atleast twice a year and a copy of the report should be submittedto <strong>NSDL</strong>.In view of the above change, various circulars issued till date by <strong>NSDL</strong> havingimpact on scope of internal / concurrent audit and format of the audit reportand findings during review of audit reports submitted by Participants, variousrequirements related to internal and concurrent audit have been consolidatedfor the benefit of Participants and their auditors. The consolidated guidelinesare enclosed as Annexure 1.[ 258 ]
1. The amended schedule for submission of Internal Audit Report (IAR) isgiven below-Period of Internal AuditApril 1 to September 30 November 15October 1 to March 31 May 15Due date for submission ofreport to <strong>NSDL</strong>2. The Participants which remain operational for less than three monthsin an audit period should submit audit report for that audit periodalong with the audit report for next audit period.For example, if a Participant is made operational by <strong>NSDL</strong> on July 5,2009, then it should submit first audit report for period - July 5, 2009to March 31, 2010. If the Participant was made operational on June 26,2009 then it should submit its first IAR for period - June 26, 2009 toSeptember 30, 2009.3. Participants may note that submission of 'Concurrent Audit' reportprescribed vide Circular No. <strong>NSDL</strong>/POLICY/2006/0021 dated June 24,2006 is in addition to the requirement of submission of IAR. Participantsmay also note that if internal audits and concurrent audits are beingdone by same auditor, then a consolidated report can be submittedinstead of two separate reports. If concurrent audit report is to besubmitted separately, frequency of such report shall be same as that ofIAR.4. As prescribed vide Circular No. <strong>NSDL</strong>/POLICY/2006/0021 dated June24, 2006, scope of concurrent audit includes account opening, controland verification of Delivery Instruction Slips (DIS). Concurrent audit forall these areas should be done by the next working day. If audit cannotbe completed by next working day due to large volume, it must becompleted within a week. The concurrent audit report must cover theseareas. The guidelines provided in Annexure 1 for above areas areapplicable for concurrent audit also.5. Participants are hereby informed that internal and/or concurrent auditreports which are not as per guidelines will be treated as non submissionof the report. <strong>NSDL</strong> reserves the right to advise a Participant to changeit's auditor if quality of the report is not satisfactory or the audit is notcarried out as per guidelines.6. Participants are advised to note that the guidelines provided in thiscircular are applicable from October 1, 2008. The Participants maysubmit audit reports for July - September 2008 quarter as per theguidelines existing prior to issuance of this circular, on or beforeDecember 31, 2008. First half yearly audit should be conducted forperiod October 1, 2008 to March 31, 2009 and report for this auditshould be submitted to <strong>NSDL</strong> latest by May 15, 2009.7. A training program shall be conducted shortly for internal / concurrentauditors by <strong>NSDL</strong>. Schedule and details of the program shall becommunicated later. Participants may advise their auditors to takebenefit of the program.8. Participants may encourage their auditors to acquire NCFM - Depositorymodule qualification.[ 259 ]
Annexure 1A. Objectives of internal audit: -The following are the broad objectives of` internal audit for depositoryoperations -(a) To assure the management that the operations of the Participantare in compliance with the requirements of The Depositories Act,1996, SEBI (Depositories & Participants) Regulations, 1996, <strong>NSDL</strong>Bye Laws and Business Rules, its agreement with the Client and<strong>NSDL</strong> and various circulars issued by <strong>NSDL</strong> from time to time.(b) To assure management that the DPM is managed and maintained ina manner that there is no threat to business continuity, integrity ofdata processing system is maintained at all times and methods areput in place to ensure that records are not lost, destroyed ortampered with or in the event of loss or destruction of data,sufficient backup of records is available at all times.(c) To assure management that the capacity of computer system, staffstrength and internal procedures are commensurate with the levelof business activity.(d) To assure management and <strong>NSDL</strong> that the business operations of theParticipant are conducted in a manner that the foreseeable risksare addressed with appropriate internal control mechanism.(e) To assure management that the operations are conducted in a mannerthat there is no loss of revenue and receivables are receivedpromptly.(f) To assure management and <strong>NSDL</strong> that the business operations of theParticipant are conducted as per the operations manual and in strictadherence with <strong>NSDL</strong> prescribed procedures.B. Audit program: -Internal audit program should cover all facets of the depository operations.Auditor may expand the scope of audit / add more audit points to achievethe objectives listed above. Participants are advised to extend full cooperationto their auditors to enable them to perform an effective audit.All circulars / guidelines issued by <strong>NSDL</strong> / SEBI from time to time andother information / records desired by the auditors should be madeavailable to them within a reasonable time.IAR must contain auditor's observation on all the audit points given below:1. Operations ManualThe Operations Manual prepared by the Participant should bereviewed by the auditor. The Operations Manual should haveorganization chart showing hierarchy of the staff members involvedin depository activities, a chart showing accountability at each level,segregation of duties, maintenance of records and documents,procedure to be followed for reporting exceptional issues relatedto systems (e.g. problem in hardware or any component of hardware/software, backup, UPS, telephone line, reducing hard disk space,decreasing speed of machine, etc.) and operations (e.g. failure inexecuting delivery instructions, failure of transactions leading toauction of clients, delay in confirmation back to clients, loss ofcertificates sent for demat, frauds, misappropriation of securities[ 260 ]
etc.), procedure to comply with the requirements related to antimoneylaundering, Compliance Certificate etc.Auditor shall certify -1.1. Whether Operations Manual covers all depository activities?1.2. Whether the Operations Manual is updated as and whenrequired?1.3. Whether the Operations Manual is available to persons whoneed to refer it?1.4. Whether procedures mentioned in the Operations Manual arefollowed?1.5. Whether there are procedures / systems in place to ensurecompliance with guidelines?Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/POLICY/2006/0025 dated July 6, 2006-Submission of information to Financial Intelligence Unit-India (FIU-IND) under Prevention of Money Laundering Act,2002 (PMLA).b) Circular No. <strong>NSDL</strong>/POLICY/2007/0017 dated March 22,2007- Important-Mandatory comments in IAR andClarification for Concurrent Audit Report.c) Circular No. <strong>NSDL</strong>/POLICY/2007/0039 dated July 11, 2007- Amendment to the Rules framed under the PMLA.d) Circular No. <strong>NSDL</strong>/POLICY/2007/0055 dated September 25,2007- Submission of details of all places from wheredepository services are offered and approval of newbranches and franchisees in the prescribed format.e) Circular No. <strong>NSDL</strong>/POLICY/2008/0003 dated January 17,2008- SEBI's advise to Depositories and its Participants onCompliance with PMLA and Rules framed there-under.The auditor should review the Operations Manual atleastonce in a year (in first half yearly audit) and provide hiscomments in report. If the Participant has not preparedthe Operations Manual, auditor should mention this factin the report and management comments should beobtained.2. Anti Money Laundering2.1. Whether the Participant has complied with the relevant laws,rules and instructions on Anti Money Laundering?While commenting on this area, auditor shall also mentionwhether the Participant has drawn up a policy forimplementation of Anti-Money Laundering mechanism and hasappointed a 'Principal Officer'. If the Participant has not drawnup a policy and/or has not appointed a Principal Officer, auditorshall mention this fact in the report and management commentsshall be obtained.Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006-Submission of information to FIU-IND under PMLA.[ 261 ]
) Circular No. <strong>NSDL</strong>/POLICY/2007/0017 dated March 22,2007- Important-Mandatory comments in IAR andClarification for Concurrent Audit Report.c) Circular No. <strong>NSDL</strong>/POLICY/2007/0039 dated July 11, 2007-Amendment to the Rules framed under the PMLA.d) Circular No. <strong>NSDL</strong>/POLICY/2008/0003 dated January 17,2008- SEBI's advice to Depositories and its Participants onCompliance with PMLA and Rules framed there-under.e) Circular No. <strong>NSDL</strong>/POLICY/2008/0052 dated July 26, 2008Filing of Suspicious Transaction Report (STR) to FIU-INDunder PMLA.3. Audit of Account opening3.1 Whether the Participant has undertaken necessary due diligenceto comply with the 'Know Your Client' (KYC) norms, 'in-person'verification, maintenance of records of 'in-person' verification,Permanent Account Number (PAN) verification, verification oforiginal documents, etc., as prescribed by SEBI / <strong>NSDL</strong> for allcategories of accounts?Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/PI/2001/1307 dated August 27, 2001-Speed-e accounts.b) Circular No. <strong>NSDL</strong>/POLICY/2006/0005 dated February 7,2006- KYC compliance.c) Circular No <strong>NSDL</strong>/POLICY/2007/0071 dated November 12,2007- Modification of Account Opening Form & DIS -Incorporation as per FIU-IND under PMLA guidelines.d) Circular No. <strong>NSDL</strong>/POLICY/2007/0077 dated December 19,2007- Master Circular on 'Account Opening' - Version 1.e) Circular No. <strong>NSDL</strong>/POLICY/2008/0018 dated March 24,2008- Guidelines on opening of Trust accounts.f) Circular No. <strong>NSDL</strong>/POLICY/2008/0030 dated April 30, 2008-SEBI's clarification on 'In-person' verification of BeneficialOwner (BO) at the time of account opening.g) Circular No. <strong>NSDL</strong>/POLICY/2008/0037 dated May 27, 2008-Clarification on acceptance of copy of the bank statementas proof of address.h) Circular No. <strong>NSDL</strong>/POLICY/2008/0040 dated June 4, 2008-Clarification with respect to capturing of landmark detailsunder the address field in the DPM.3.2 Whether data entered in DPM is exactly matching with thedetails mentioned in the account opening form?3.3 Whether signature of the client on the account opening formis exactly same as that scanned in DPM? (Circular No. <strong>NSDL</strong>/POLICY/2007/0002 dated January 4, 2007).For points 3.2 and 3.3 above, auditor should randomly verifydata entered in the DPM and the signature(s) of the client(s)scanned vis a vis the details in the account opening form(s).[ 262 ]
Auditor shall record the findings in following manner:i) Number of accounts verified:ii) Number of accounts where signature scanned and/or dataentered matches:iii) Number of accounts where signature and /or data entereddo not match:3.4 Whether PAN is verified and captured in DPM as per prescribedprocedure? (Circular No.<strong>NSDL</strong>/POLICY/2007/0026 dated May10, 2007).3.5 Whether the Participant has executed utilities provided by <strong>NSDL</strong>at regular intervals and has taken necessary actions? (CircularNos.<strong>NSDL</strong>/POLICY/2006/0042, <strong>NSDL</strong>/POLICY/2006/0047, <strong>NSDL</strong>/POLICY/2006/0057 dated September 23, 2006, October 16, 2006and November 24, 2006 respectively).4. Audit of changes in Client Master details4.1 Whether changes in Client Master details (i.e. change ofaddress, change of signature and change in bank details /Nomination / Transmission / Closure / Freezing / Unfreezingetc.) are being done as per prescribed procedure?Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/PI/2002/0365 dated March 4, 2002-Closure of account with Zero Balances.b) Circular No. <strong>NSDL</strong>/PI/2002/2175 dated December 18, 2002-Closure of account wherein request received on Plain Paper.c) Circular No. <strong>NSDL</strong>/PI/2003/0309 dated February 22, 2003-Closure of account wherein demat is pending.d) Circular No. <strong>NSDL</strong>/POLICY/2006/0068 dated December 29,2006- Closure of account with zero balance after December31, 2006 that are frozen due to non compliance of PANrequirements.e) Circular No. <strong>NSDL</strong>/POLICY/2007/0005 dated January 18,2007- Clarification- Obtaining/Capturing of PAN details inthe DPM in case of transmission in depository account.f) Circular No. <strong>NSDL</strong>/POLICY/2007/0006 dated January 23,2007- Capturing of PAN details in the DPM in case oftransmission in depository account.g) Circular No. <strong>NSDL</strong>/POLICY/2007/0030 dated June 18, 2007-Requirement of submission of Transaction Statement forvarious depository related activities.h) Circular No. <strong>NSDL</strong>/POLICY/2007/0077 dated December 19,2007- Master Circular on 'Account Opening' - Version 1i) Circular No. <strong>NSDL</strong>/POLICY/2008/0034 dated May 21, 2008-Procedure to be followed by Participants on Minor attainingmajority.j) CircularNo.<strong>NSDL</strong>/POLICY/2008/0040 dated June 4, 2008 -Clarification with respect to capturing of landmark detailsunder the address field in the DPM System[ 263 ]
k) Circular No. <strong>NSDL</strong>/POLICY/2008/0066 dated September 29,2008-Deadline for closure of PAN non-compliant BOaccounts with no security balances.4.2 Whether the Participant has collected the requisite documentsto claim waiver of settlement fees consequent to transfer ofsecurities with respect of SEBI directive on account closure?(Circular No. <strong>NSDL</strong>/POLICY/2007/0060 dated October 5, 2007).5. Audit of demat requests5.1. Whether demat requests received are sent to Issuer/ Registrar& Transfer agent within seven days from the date of receipt ofthe request from the clients?5.2. Whether controlling office/service centers have a provisionfor safekeeping of security certificates received from clientsfor dematerialisation and security certificates received afterrejection of the demat request from Issuer/Registrar & TransferAgent?6. Audit of delivery instructions6.1. Whether prescribed guidelines are followed for issuance,acceptance and execution of instruction slips (including Interdepositoryinstruction slips and Pledge slips)?6.1.1. Issuance of DISThe procedure followed by the Participants for -a) Issuance of DIS booklets to clients including looseslips.b) Existence of controls on DIS issued to clientsincluding pre-stamping of Client Id and unique preprintedserial numbers.c) Record maintenance for issuance of DIS booklets(including loose slips) in the back office.6.1.2. Verification of DISThe procedure followed by the Participants for -a) Date and time stamping (including late stamping)on instruction slips.b) Blocking of used/reported lost/stolen instructionslips in back office system / manual record.c) Blocking of slips in the back office system / manualrecord which are executed in DPM directly.d) Two step verification for a transaction for morethan Rs. 5 lakh especially in case of off-markettransactions.e) Instructions received from dormant accounts.Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/PI/98/519 dated October13, 1998- Date and time stamping.b) Circular No. <strong>NSDL</strong>/PI/2002/0740 dated May 9,2002- Fax instructions.[ 264 ]
c) Circular No. <strong>NSDL</strong>/PI/2003/0406 dated March7, 2003 & Circular No. <strong>NSDL</strong>/PI/2004/1911dated October 21, 2004- Late stamping.d) Circular No. <strong>NSDL</strong>/PI/2004/1401 dated August5, 2004- Guidelines on issuance/re-issuanceand acceptance of DIS.e) Circular No. <strong>NSDL</strong>/POLICY/2007/0011 datedFebruary 15, 2007- SEBI circular on safeguardsto address the concerns of the investors ontransfer of securities in dematerialized mode.f) Circular No. <strong>NSDL</strong>/POLICY/2007/0030 datedJune 18, 2007- Requirement of submission ofTransaction Statement for various depositoryrelated activities.g) Circular No <strong>NSDL</strong>/POLICY/2007/0071 datedNovember 12, 2007- Modification of AccountOpening Form & DIS - Incorporation of detailsas per FIU-IND under PMLA guidelines.h) Circular No. <strong>NSDL</strong>/POLICY/2008/0002 datedJanuary 11, 2008- Procedure for execution oftransactions based on receipt of electronicinstructions.i) Circular No. <strong>NSDL</strong>/POLICY/2008/0004 datedJanuary 24, 2008- Facility for submittingconsolidated DIS accompanied by computerprint-outs by Power of Attorney holder onbehalf of its Clients.j) Circular No. <strong>NSDL</strong>/POLICY/2008/0011 datedFebruary 29, 2008- SEBI circular on safeguardsto address the concerns of the investors ontransfer of securities in dematerialized mode.7. Audit of other transactions/services7.1. Whether transaction statements are provided to the clients asper prescribed guidelines?7.1.1. Whether the transaction statements are generated fromback office or DPM?7.1.2. If generated from back office, whether the detailsmatch with statement generated from DPM?Auditor may refer following circulars:a) Circular No. <strong>NSDL</strong>/PI/2000/103 dated January 31,2000- Format of transaction statement.b) Circular No. <strong>NSDL</strong>/PI/2002/0398 dated March 7,2002- Transaction statement through internet.c) Circular No. <strong>NSDL</strong>/PI/2003/0308 dated February 22,2003- RBI directive on providing TransactionStatement to Bank clients.d) Circular No. <strong>NSDL</strong>/PI/2004/1104 dated June 21,2004- Footnote in transaction statement sent toclient.[ 265 ]
e) Circular No. <strong>NSDL</strong>/PI/2004/1514 dated August 24,2004- Exemption from giving hard copies oftransaction statements to BO by Participants.f) Circular No. <strong>NSDL</strong>/PI/2004/2291 dated December23, 2004- Features to be incorporated in back office"client type" and "client sub type".g) Circular No. <strong>NSDL</strong>/PI/2005/1692 dated September9, 2005- Conditions for Exemption from sendingtransaction statements.h) Circular No. <strong>NSDL</strong>/PI/2005/2088 dated October 28,2005- Dispatch of transaction statement.i) Circular No. <strong>NSDL</strong>/POLICY/2006/0010 dated March24, 2006- Exemption from sending physicaltransaction statement to subscribers of IDeAS.j) Circular No. <strong>NSDL</strong>/POLICY/2006/0014 dated May11, 2006- Providing Statement of transaction to BOconsequent to account closure.k) Circular No. <strong>NSDL</strong>/POLICY/2008/0036 dated May21, 2008- Providing Transaction Statements toclients by email or on website.8. Audit of branch / franchisee8.1. Whether depository related activities carried out by branch /franchisee (whether offering the services as a service centre,collection centre, drop box centre or called by any other name)are in accordance with procedure/system explained inOperations Manual? Auditor may visit the branches / franchiseesand ensure compliance of the same. (Circular No. <strong>NSDL</strong>/PI/2005/2088 dated October 28, 2005).8.2. Whether NCFM qualified person is available at each branch /franchisee? If no, then the number of branches/franchiseeswhere qualified person is not available should be mentionedin the report? (Circular No. <strong>NSDL</strong>/POLICY/2007/0067 datedNovember 1, 2007).8.3. Whether <strong>NSDL</strong>'s approval has been obtained for all the branches/ franchisees opened during the audit period?8.4. Whether the prescribed procedure has been followed for anybranch / franchisee closed / terminated during the audit period?(Circular no. <strong>NSDL</strong>/PI/2002/0346 dated February 26, 2002).8.5. Whether the branches / franchisees handling more than 5000accounts have direct electronic connectivity with the office ofthe Participant, which is directly connected to the Depository?(Circular No. <strong>NSDL</strong>/POLICY/2007/0055 dated September 25,2007).8.6. Which methodology is adopted by the Participant with respectto records maintained pertaining to each depository activity(Account opening forms, DIS, DIS requisition slips, DIS issuanceregister, etc.)? Auditor shall comment 'centralised' if recordsare maintained at controlling office and 'decentralised' ifrecords are maintained at various centres. Auditor shall list[ 266 ]
down each activity with methodology of record keepingcommented against it.9. Back office software9.1. Whether there is a mechanism in place whereby the balancesas per back office system are reconciled on a daily basis withthe DPM? (Circular no. <strong>NSDL</strong>/PI/2005/2088 dated October 28,2005).10. Audit of DPM Procedures10.1. Whether necessary measures have been adopted as per CircularNo. <strong>NSDL</strong> /PMC/Email- 62/05 dated May 3, 2005 to ensurebusiness continuity of the Participant? (Circular No. <strong>NSDL</strong>/PI/2005/1898 dated October 5, 2005).11. Audit of Client BillingAuditor may refer Circular No. <strong>NSDL</strong>/PI/2005/2392 dated December6, 2005.12. Exceptional Reporting12.1. In addition to above mentioned points, auditor shall verify allother depository related operational areas includingsupplementary agreements/power of attorney executed withclients, handling of investor grievances, records and documentsmaintained, format of stationery, information on timelysubmission of reports/dues, etc. and shall submit only anexceptional report with a statement that "All other operationalareas have been verified and found satisfactory and theexceptions are mentioned hereunder". Report shall point outfindings and conclusions, recommendations, reservations,qualifications, areas where internal controls are weak/do notexist, areas where internal controls exist, but exceptions areobserved.C. Audit report: -In addition to comments on above-mentioned 12 mandatory audit points,the audit report should also contain the following:1. A certification by the auditor thata. 100% verification is carried out for demat account opening (i.e.all accounts opened during the audit period).b. 100% verification is carried out for controls over issuance ofDIS booklets including loose slips (all DIS issued from controllingoffice and all branch / franchisees).c. At least 25% of the DIS processed is verified (Circular no. <strong>NSDL</strong>/POLICY/2006/0021 dated June 24, 2006 and <strong>NSDL</strong>/POLICY/2007/0017 dated March 22, 2007). Auditor shall mention theexact percentage of samples verified.2. Samples verified for other depository activities such client masterchanges, demat requests, pledge instructions etc.3. If any major/significant deviations and deviations of recurring natureare observed, then these should be highlighted in the audit report.4. If the observation is in the nature of a deviation or arecommendation, management response should be sought and[ 267 ]
ecorded in the report. (Circular No. <strong>NSDL</strong>/PI/2001/0467 dated April4, 2001).5. Comments by the auditor on whether the Participant has compliedwith all the observations noted during last <strong>NSDL</strong> visit. (Circular No.<strong>NSDL</strong>/PI/2001/0847 dated June 15, 2001).6. Comment on the issues for which <strong>NSDL</strong> has specifically soughtauditor's certification to be included in IAR.7. Comment by auditor on whether there were any pending complianceson deviations reported by auditor in last audit report on whichmanagement has assured to take necessary action, if yes, whethersame has been complied with. If no, auditor should highlight on thedeviations which continue to be non-complied.8. Comments on improvements made in the operations since last audit.(Circular No. <strong>NSDL</strong>/PI/2001/0847 dated June 15, 2001).9. Approximate man hours spent and level of persons engaged in thiswork.10. A statement by the auditor that this circular was read, understoodand the IAR is based on the guidelines given in this circular.11. A statement by the auditor that the auditor is neither related toofficials of the Participant and/or does not have any interest in themanagement of the Participant nor has any partner/proprietor inthe firm who is also a Participant official.12. Auditor's membership number should be mentioned at the end ofthe report.It may be noted that for the purpose of compliance with Bye Law10.3 of <strong>NSDL</strong>, the audit must be conducted in accordance with theaforesaid guidelines.The circulars referred above under various head are indicative andnot exhaustive.Circular No.Sub : Important-Mandatory comments in Internal Audit Report and<strong>NSDL</strong>/POLICY/Clarification for Concurrent Audit Report.2007/0017 Attention of Depository Participants (DPs) is invited to revised <strong>NSDL</strong> CircularDate: March 22, 2007 no. <strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006 regarding guidelines inrespect of internal audit of the Depository Participant (DP) operations. Inthis regard, some of the important areas of Internal Audit Report are reiteratedfor the attention and necessary action to be initiated by DPs:1) Internal Audit Report (IAR)(I) Compliance with regard to submission of IAR in revised format andcomment on compliance letters sent by <strong>NSDL</strong>:a) IAR should be submitted strictly as per the revised format givenin <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006;b) Auditor has to comment on the issues for which <strong>NSDL</strong> vide itscompliance letters has specifically asked for auditor's certification.Non-compliance with the point nos. (I) a and b will be consideredas non-submission of IAR and penalty will be levied accordingly.[ 268 ]
(II)(III)Audit Points to be included in IAR with effect from quarter endingDecember 2006:a) The auditor should mandatorily comment on the execution ofutilities and the action taken by the DPs with respect to <strong>NSDL</strong>Circular Nos. <strong>NSDL</strong>/POLICY/2006/0042,<strong>NSDL</strong>/POLICY/2006/0047,<strong>NSDL</strong>/POLICY/2006/0057 dated September 23, 2006, October 16,2006 and November 24, 2006 respectively.b) Report on the signature(s) matched and deviation found, if any,with respect to signature(s) of the Client(s) scanned in the DPMApplication Software against the signature(s) on the accountopening form(s) (Refer Circular No. <strong>NSDL</strong>/POLICY/2007/0002 datedJanuary 4, 2007).c) DPs are advised to inform their internal auditors to add thefollowing area to point no. 6. Audit of Service Centres of Circularno. <strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006:Point No. 6. regarding Audit of Service Centres:6.3. Certify that franchisee outlet(s) has / have been openedby the Depository Participant pursuant to <strong>NSDL</strong> approval.These audit points should be included in the IAR with effectfrom quarter ending December 2006 to be submitted by March31, 2007.Mandatory comments required by Internal Auditor in IARIt has been observed that in the IAR submitted for the quarter endingSeptember 2006, internal auditors have not commented or audit reporthas not been found in order as mentioned in the circular no. <strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006 in certain areas such asavailability of operational manual, Anti Money Laundering Measuresadopted by the DP, exception reporting etc.In view of the deficiencies observed, it is reiterated that all DPs areadvised to communicate to their internal auditor to mandatorilycomment upon the given below areas as mentioned in revised circularno. <strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006:a) Certify the operation manual covering all depository activities ofthe DP, ensuring compliance with relevant <strong>NSDL</strong> guidelines;b) Compliance related with the relevant laws, rules and instructionson Anti Money Laundering Measures (Refer Circular No. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006);c) Exceptional reporting;d) Improvements brought about in the operations between the lastaudit and the current audit;e) Management comment on the deviations pointed out by theinternal auditor;f) DP's compliance with all observations noted during <strong>NSDL</strong> visit.2) Clarification regarding Concurrent Audit Report (CAR)Attention of DPs is invited to <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2006/[ 269 ]
0021 dated June 24, 2006 regarding Concurrent Audit of account opening,control and verification of Delivery Instruction Slips (DIS).DPs have sought clarification whether the requirement of 100%Concurrent Audit applies to control and verification of DIS as well. It isclarified as follows:(a) 100% verification needs to be carried out only in respect of accountopening.(b) As regards Delivery Instruction Slips (DIS) :(i) auditor should carry out 100% verification with respect tocontrol over issuance and acceptance of DIS bookletsincluding loose slips; however(ii) with respect to verification (execution and processing) ofDIS, auditor should verify atleast 25% of the DIS processed.The sample percentage checked in this regard should bementioned in the CAR.Deviation and/or non-compliance observed in the aforesaidareas should be mentioned in the CAR by the ConcurrentAuditor. The top Management of the DP should comment onthe observations made by the Concurrent Auditor.(3) Consolidated report for CAR and IAR, in case auditor is thesame entity:If the Auditor for Internal and Concurrent Audit is the same entity,consolidated report should be submitted on quarterly basis (timeframe for submission CAR and IAR is mentioned in Circular No.<strong>NSDL</strong>/POLICY/2006/0027 dated July 17, 2006).Circular No.Sub : Concurrent Audit - Account opening, Control and Verification of<strong>NSDL</strong>/POLICY/Delivery Instruction Slips2006/0021 Attention of Participants is invited to <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/PI/2002/1271Date : June 24, 2006 dated July 30, 2002 regarding the scope of internal audit and subsequentamendments / modifications intimated vide various circulars from time totime. All Participants are advised that w.e.f. August 1, 2006, the process ofdemat account opening, control and verification of Delivery Instruction Slips(DIS) shall be subject to Concurrent Audit. In this regard, Participants areadvised as follows:1. Appoint a firm of qualified Chartered Accountant(s) or CompanySecretary(ies) holding a certificate of practice for conducting theconcurrent audit. Participants in case they so desire, may entrust theconcurrent audit to their Internal Auditors.2. In respect of account opening, the auditor should verify all thedocuments including KYC documents furnished by the Clients and verifiedby the officials of the Participant (Refer Circular Nos. <strong>NSDL</strong>/PI/2002/1271 dated July 30, 2002, <strong>NSDL</strong>/PI/2004/1622 dated September 7, 2004,<strong>NSDL</strong>/POLICY/2006/0005 dated February 7, 2006 and <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006).3. The scope of concurrent audit with respect to control and verificationof DIS should cover the areas given below:(I) Issuance of DIS[ 270 ]
The procedure followed by the Participants with respect to :(a) Issuance of DIS booklets including loose slips.(b) Existence of controls on DIS issued to Clients including prestampingof Client Id and unique pre-printed serial numbers.(c) Record maintenance for issuance of DIS booklets (including looseslips) in the back office.(II) Verification of DISThe procedure followed by the Participants with respect to :(a) Date and time stamping (including late stamping) on instructionslips;(b) Blocking of used/reported lost/stolen instruction slips in backoffice system / manual record.(c) Blocking of slips in the back office system / manual record whichare executed in DPM directly.(d) Two step verification for a transaction for more than Rs. 5 lakh,especially in case of off-market transactions.(e) Instructions received from dormant accounts.In this regard, Participants are requested to refer Circular Nos.<strong>NSDL</strong>/PI/2002/1271 dated July 30, 2002 and <strong>NSDL</strong>/PI/2004/1401dated August 5, 2004.4. The Concurrent Auditor should conduct the audit in respect of allaccounts opened, DIS issued and controls on DIS as mentioned above,during the day, by the next working day. In case the audit could not becompleted within the next working day due to large volume, the auditorshould ensure that the audit is completed within a week's time.5. Any deviation and/or non-compliance observed in the aforesaid areasshould be mentioned in the audit report of the Concurrent Auditor. TheManagement of the Participant should comment on the observationsmade by the Concurrent Auditor.6. The Concurrent Audit Report should be submitted to <strong>NSDL</strong>, on a quarterlybasis, in a hard copy form, at the address given hereunder. Further, thetime frame for submission of concurrent audit would be same asmentioned in our Circular No. <strong>NSDL</strong>/PI/2002/1271 dated July 30, 2002.However, the first concurrent audit report for the month of August andSeptember 2006, should be submitted alongwith Internal Audit reportfor the quarter ending September 2006.The Vice PresidentBusiness Partners Inspection DepartmentNational Securities Depository LimitedTrade World, A-Wing, 5th floorKamala Mills CompoundSenapati Bapat MargLower ParelMumbai - 400 013.7. Participants may note that if the Auditor for Internal and ConcurrentAudit is the same, consolidated report may be submitted.[ 271 ]
Circular No.<strong>NSDL</strong>/PI/2000/515Date : April 20,2000Attention of all Participants is invited to Bye Law 10.3 of the Bye Laws of<strong>NSDL</strong> which states that every Participant shall ensure that an internal auditshall be conducted in respect of the operations of the Depository by a qualifiedChartered Accountant or a Company Secretary holding a Certificate of Practiceat intervals of not more than three months and a copy of the internal auditreport shall be furnished to the Depository. Attention is also invited to CircularNo. <strong>NSDL</strong>/PI/98/51 dated February 6, 1998 wherein the schedule for submissionof internal audit reports and broad contents of internal audit report werespecified.SEBI (Depositories and Participants) Regulations, 1996, require that everyParticipant should have adequate mechanism for the purpose of reviewing,monitoring and evaluating internal controls and systems. Further, theRegulations also require certain set of records to be maintained by everyParticipant. It is expected that internal audit is conducted with the objectiveof assuring the Participant that the unmanaged residual risk in the businessoperations is minimum, operations are in compliance with the requirementsof SEBI (Depositories & Participants) Regulations, 1996, <strong>NSDL</strong>'s Bye Laws,Business Rules and the agreement with the clients. On the basis of inspectionof the operations of the participants over the past two years and the reviewof internal audit reports submitted by participants, it is found necessary tostate in detail the objectives and the contents of an internal audit report.Internal Audit - Management commentsCircular No.Attention of all Participants is invited to our Circular No. <strong>NSDL</strong>/PI/2000/515<strong>NSDL</strong>/PI/2001/0467 dated April 20, 2000 regarding objectives and contents of an internal auditDate : April 4, 2001 report. Participants are hereby informed that the internal audit reports whichdo not have management comments on the adverse observations made byauditors will be treated as non submitted reports and penalty will be imposedon the Participants accordinglyc. Grievance RedressalClause 24 of <strong>NSDL</strong>-DPAgreementGrievance redressal - ReportingThe Participant shall resolve any investor grievance which has been receivedagainst the Participant or <strong>NSDL</strong> and submit a report of the grievances resolvedto <strong>NSDL</strong> and Securities and Exchange Board of India in accordance with theperiod stipulated in the Securities and Exchange Board of India (Depositories& Participants) Regulations, 1996Circular No.Sub: Revision of Investor Grievance Report Format<strong>NSDL</strong>/POLICY/This is further to Circular Nos. <strong>NSDL</strong>/PI/98/500 dated October 6, 1998, <strong>NSDL</strong>/2010/0040 PI/2001/0191 dated January 31, 2001, <strong>NSDL</strong>/PI/2003/1871 dated NovemberDate: April 19, 2010 25, 2003, <strong>NSDL</strong>/PI/2004/0183 dated January 29, 2004 and <strong>NSDL</strong>/PI/2004/1688dated September 16, 2004 relating to submission of Investor Grievance Reports(IGRs) by Participants for a particular month by 10 th of the following month, ina specified format.All Participants are hereby informed that :-1. IGR format has been revised and enclosed as Annexure. The IGR in revisedformat is to be submitted by the Participants from April 2010 onwardsi.e. IGR in new format for the month of April 2010 has to besubmitted to <strong>NSDL</strong> by May 10, 2010.[ 272 ]
2. IG Report may be forwarded electronically i.e. via email atdp_igreport@nsdl.co.in from the email ID of the Compliance Officer.Alternatively, the report can be submitted in hard copy.3. Where the Participants have not received any grievance / complaint in agiven month, a nil report should be submitted to <strong>NSDL</strong>.AnnexureINVESTOR GRIEVANCE REPORT FORMAT FOR PARTICIPANTDP Name:DP Id:IG Report for the month ofNature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Account OpeningRelatedDenial in opening anaccountAccount opened inanother name thanas requestedNon receipt ofDemat AccountOpening KitDelay in activation/opening of accountNon Receipt of copyof DP ClientAgreement/Schedule A ofChargesDemat/rematRelatedDelay inDematerialisationrequest processingDelay inRematerialisationrequest processingNon Acceptance ofdemat/rematrequestTransactionStatement Related[ 273 ]
Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Delay in/ Non-Receipt ofStatementsDiscrepancy intransactionstatementImproper ServicesRelatedInsistence of Powerof Attorney in itsfavour.Deactivation/Freezing/Suspension relatedDefreezing relatedTransmission relatedPledge relatedSMS relatedNon-updation ofchanges in account(address/signatories/bankdetails/ PAN/Nomination etc.)Charges RelatedCharges levied forOpening/ closure ofAccountCharges paid butnot creditedWrong/ ExcessChargesDeliveryInstruction RelatedNon acceptance ofDIS for transferDelay in/ nonExecution of DISDelay in Issuance /Reissuance of DISBookletAccount ClosureRelated[ 274 ]
Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Non closure/ delayin closure ofaccountClosure of a/cwithout intimationby DPManipulation/Unauthorisedaction RelatedUnauthorisedTransaction inaccountManipulationUnauthorisedchanges in account(address/signatories/bankdetails/ PAN/Nomination etc.)Erroneous TransferCompany/RTArelatedAction – CashAction – Non CashInitial Public Offer/Follow-on PublicOffer RelatedOthers (Specify)TotalCircular No.Attention of Participants is invited to Bye Law 6.3.6 (iii) of the Bye Laws of<strong>NSDL</strong>/PI/2003/1871 <strong>NSDL</strong> which requires every Participant to submit to the Depository a reportDate : November 25, giving number of complaints received from Clients, nature of complaints,2003 status and manner of redressal, every month (latest by 10th of the followingmonth). Participants are hereby informed that with effect from January 1,2004, the aforesaid report can be submitted to <strong>NSDL</strong> either electronically(via e-mail) or in hard copy form. Such details can be e-mailed to <strong>NSDL</strong> atdp_igreport@nsdl.co.in.For submitting the reports electronically, we advise the Participants to providethe e-mail Id of the compliance officer to <strong>NSDL</strong> and ensure that the reportis submitted only from the e-mail Id of that person. All Participants aretherefore advised to provide e-mail Id's of compliance officers latest byDecember 1, 2003.[ 275 ]
Circular No. With reference to our Circular No. <strong>NSDL</strong>/PI/98/500 dated October 6, 1998,<strong>NSDL</strong>/PI/2001/0191 attention of all Participants is once again invited to Regulation 20(2)(e) ofDate: January 31, 2001 SEBI (Depositories and Participants) Regulations, 1996 which states that theParticipant shall redress the grievances of beneficial owners within thirtydays of the date of the receipt of the complaint and keep the Depositoryinformed about the number and the nature of redressals. Attention is alsoinvited to Bye Law 6.3.6 (iii) of <strong>NSDL</strong> Bye Laws which states that the Participantshall submit to the Depository the number of complaints received from Clients,their nature, status and manner of redressal once every month.Participants are advised to submit this report every month to Mr. HarpinderSaini, Officer-In-Charge, Investor Grievance Cell, <strong>NSDL</strong> latest by 10th of thefollowing month. In case there are no grievances, a nil report should besubmitted.Circular No.<strong>NSDL</strong>/PI/98/500Date : October 6, 1998d. Termination of ParticipantProcedure- Termination of ParticipantBye Laws 6.5.4 (viii)e. SEBI Annual FeesSchedule of payment of SEBI Annual FeesAttention of all Participants is invited to Regulation 20(2)(e) of SEBI(Depositories and Participants) Regulations, 1996 which states that theparticipant shall redress the grievances of beneficial owners within thirtydays of the date of the receipt of the complaint and keep the depositoryinformed about the number and the nature of redressals. Attention is alsoinvited to Bye Law 6.3.6 (iii) of <strong>NSDL</strong> Bye Laws which states that the Participantshall submit to the Depository the number of complaints received from Clients,their nature, status and manner of redressal once every month.Participants are advised to submit this report every month to Mr. HarpinderSaini, Officer-In-Charge, Investor Grievance Cell, <strong>NSDL</strong> on or before 10th ofthe following month. In case there are no grievances, a nil report should besubmitted.The Participant, upon cancellation of the certificate of registration by theSecurities and Exchange Board of India, shall issue a public notice in onenational English daily newspaper and in one vernacular daily newspaper,informing the public about the closure of its depository operations. In case oftermination of operations of the Participant by the Depository, such publicnotice may be issued by the Depository at the cost of the ParticipantCircular No.Attention of Participants is invited to Regulation 20(2)(f) of the Securities<strong>NSDL</strong>/PI/2003/0021 and Exchange Board of India (Depositories and Participants) Regulations, 1996Date: January 3, 2003 and Part A and Part B of the second schedule thereunder, regarding paymentof annual fees of Rs. 1000/- by Participants to Securities and Exchange Boardof India (SEBI).At present, <strong>NSDL</strong> collects this fee by way of banker's cheque/demand draftfor Rs. 1000/- in favour of "Securities and Exchange Board of India" and forwardsthe same to SEBI in April and October every year. Participants are herebyinformed that SEBI annual fees will be included in the bill of February 2003(in case of Participants registered with SEBI between October and March) and[ 276 ]
August 2003 (in case of Participants registered with SEBI between April andSeptember) for onward remittance to SEBI.f. Information to SEBIWeekly demat information to SEBI not to be furnishedCircular No. SEBI has vide its circular no. SEBI/MRD/DEP/Cir-44/2003 dated December 12,<strong>NSDL</strong>/PI/2003/2056 2003 informed <strong>NSDL</strong> that henceforth, Participants need not furnish theDate : December 20, information to SEBI as prescribed in SEBI circular no. SMDRP/DRP/Cir-30/992003 dated August 25, 1999 regarding processing of application fordematerialisation. Participants are advised to take note of the same.❑ ❑ ❑[ 277 ]
NOTES[ 278 ]
Regulation 20 (1) (e)BusinessRule 18.1.1(30)Bye Law 14.3.5Clause 16 of DP-Client Agreement7. Grievance RedressalThe participant shall redress the grievances of beneficial owners within thirtydays of the date of receipt of the complaint and keep the depository informedabout the number and the nature of redressalsNature of Non-ComplianceNon-submission of monthly report ofClient Complaints as required underBye Law 6.3.6 (iii) to be submittedevery month (latest by 10th of thefollowina month).PenaltyRs.500 per month.All claims, differences or disputes referred to in this Chapter shall be submittedto arbitration within six months from the end of the quarter of the date fromwhich the claim, difference or dispute arose or shall be deemed to have arisen.The time taken in conciliation proceedings, if any, initiated and conducted asper the provisions of the Act and the time taken to administratively resolvethe claims, differences or disputes shall be excluded for the purpose ofdetermining the period of six months.Provided that in cases where after examining sufficient documentary proofsubmitted by the party for not filing the arbitration case within the limitationperiod, the Depository considers that the reasons for delay were indeed beyondthe control of the party, the limitation period can be extended in those casesfor a further period of three months by the Depository after recording thereasons for the same in writing.The Depository Participant undertakes to resolve all legitimate grievances ofthe Client against the Depository Participant within a period of thirty days.SEBI Circular - Exclusive E-mail Id for redressal of Investor ComplaintsCircular No.Sub: Disclosure of regulatory orders and arbitration details on Depository<strong>NSDL</strong>/POLICY/website2010/0064 Attention of Participants is invited to SEBI’s Circular No. CIR/MRD/DP/19/2010Date: June 18, 2010 dated June 10, 2010 (copy enclosed) regarding disclosure of regulatory ordersand arbitration awards issued by depository on depository’s website.Participants are requested to take note of the same.Circular No.Sub: Disclosure of investor complaints and arbitration details on<strong>NSDL</strong>/POLICY/Depository website2010/0018 Attention of Participants is invited to SEBI's Circular No. SEBI/MRD/OIAE/Date: February 23, 2010 Dep/Cir- 4/2010 dated January 29, 2010 (copy enclosed) regarding disclosureof details of complaints lodged by investors (Beneficiary Owners) againstParticipants including details pertaining to arbitration and penal action againstthe Participants on depository's website.Participants are hereby informed that such details will henceforth be displayedon <strong>NSDL</strong>'s website.AnnexureDeputy General ManagerMarket Regulation Department – Division of PolicyE-mail: harinib@sebi.gov.in1. The Managing Director and CEO, <strong>NSDL</strong>2. The Managing Director and CEO, CSDLSEBI/MRD/ OIAE/ Dep/ Cir- 4/2010January 29, 2010[ 279 ]
Dear Sir / Madam,Sub: Disclosure of investor complaints and arbitration details on Depository website1. SEBI has received feedback from investors and investor associations to improve transparency inthe ‘grievance redressal mechanism’. Based on the feedback and inputs received from themtransparency in ‘grievance redressal’ is identified as a key area to augment investor protection. Itis envisaged that transparency will also improve the general functioning of the market by providinginvestors the wherewithal to make informed choice.2. Accordingly, it has been decided that the Depositories shall henceforth disclose the details ofcomplaints lodged by Beneficiary Owners (BO’s)/ investors against Depository Participants (DPs)in their website. The aforesaid disclosure shall also include details pertaining to arbitration andpenal action against the DPs.3. The format for the reports for the aforesaid disclosure, prepared following due deliberations andinputs from the Depositories, are given as annexure to this circular (12 pages), consisting of thefollowing reports:a. Report 1A: Complaints received against DPs during 2009-10b. Report 1B: Redressal of Complaints received against DPS during 2008-09c. Report 1C: Redressal of Complaints received against DPs during 2009-10d. Report 2A: Details of Arbitration Proceedings (where Investor is a party) during 2008-09:e. Report 2B: Details of Arbitration Proceedings (where Investor is a party) during 2009-10f. Report 3A: Penal Actions against DPs during 2008-09g. Report 3B: Penal Actions against DPs during 2009-10h. Report 4A: Redressal of Complaints lodged by investors against Listed Companies during2008 -09i. Report 4B: Redressal of Complaints lodged by investors against Listed Companies during2009 -10j. The Depositories are accordingly advised to:a. bring the provisions of this circular to the notice of the DPs, Companiesand their Registrar & Transfer Agents (RTA’s) and also to disseminate the same on thewebsite;b. arrange to disclose details as per the aforesaid reports in their website within a periodof one month from the date of this circular on a continuous basis;c. arrange to update the aforesaid reports on a quarterly basis, except the reports 1A,which shall be updated on a weekly basis;d. make amendments to the relevant bye-laws, rules and regulations for the implementationof the aforesaid disclosures, if necessary;e. communicate to SEBI, the status of the implementation of the provisions of this circularin the Monthly Development Report;k. For any clarification in this matter, the Chief General Manager, Office of Investor Assistanceand Education, SEBI may be contacted at 26449400.l. This circular is being issued in exercise of powers conferred under Section 11 (1) of theSecurities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996to protect the interests of investors in securities and to promote the development of, and toregulate the securities market.Yours faithfully,Harini Balaji[ 280 ]
Report 1A: Complaints received against Depository Participants (DPs)# during 2009-10: Updated on mmm dd yyyy (to be updated weekly)(In excel sheet)Sl.No. Date ofReceiptName ofComplainantDetails of Complaint Status of ComplaintType ofComplaint*SEBI Ref.No. (ifapplicableName of DP Status** StatusDate##Date ofFilingArbitrationName ofArbitrator(s)Date ofArbitrationAward123N# including against its authorized persons, employees, etc.## Status date is the date of resolution/reference to arbitration/finding it non-actionable. If under process, it is the date of updation of this sheet.*/** As per Table 1A[ 281 ]
Report 1B: Redressal of Complaints received against Depository Participants (DPs) during 2008-09: Updated on mmm dd yyyy (to be updatedevery quarter) (In excel sheet)Sl.No.NameoftheDPStatus of DP(active/inactive/ inprocess oftermination/withdrawal)No. ofBOsaccountsat thebeginningof theyearNo. ofComplaintsreceivedagainstthe DP*ResolvedthroughtheDepositoryNonactionable**ArbitrationAdvisedOf the Complaints received during 2008-09PendingforredressalwithDepositoryNo. of ComplaintsNo. ofArbitrationfiled by BOsDecided bytheArbitratorsDecidedby Arbitratorsin favour ofthe BOsPendingforRedressalwithArbitrators123NTotal* including against its authorized persons, employees, etc.** Non actionable means the complaint that are incomplete / outside the scope of Depository(Arrange the DPs in descending number of complaints filed against them during the period)[ 282 ]
Report 1C: Redressal of Complaints received against Depository Participants (DPs) during 2009-10: Updated on mmm dd yyyy (to be updatedevery quarter) (In excel sheet)Sl.No.NameoftheDPStatus of DP(active/inactive/ inprocess oftermination/withdrawal)No. ofBOsaccountsat thebeginningof theyearNo. ofComplaintsreceivedagainstthe DP*ResolvedthroughtheDepositoryNonactionable**ArbitrationAdvisedOf the Complaints received during 2008-09PendingforredressalwithDepositoryNo. of ComplaintsNo. ofArbitrationfiled by BOsDecided bytheArbitratorsDecidedby Arbitratorsin favour ofthe BOsPendingforRedressalwithArbitrators123N* including against its authorized persons, employees, etc.** Non actionable means the complaint that are incomplete / outside the scope of Depository(Arrange the DPs in descending number of complaints filed against them during the period)[ 283 ]
Report 2A: Details of Arbitration Proceedings (where BO is a party) during 2008-09: Updated on mmm dd yyyy (to be updated every quarter)(In excel sheet)Sl.No.Name ofArbitratorNo. ofAwardsPassedNo. of Awards in favor ofBOsNo. ofAwardsappealedNo. ofAwardsImplementedNo. of cases pending for redressal at the end of periodFiled by DP Filed by BO Pending For more than6 monthsFor more than 3 months,but less than 6 months123NTotal(In case of panel of arbitrators, the cases / awards would appear against every member of the panel)(Arrange the arbitrators in descending number of awards passed by them during the period)[ 284 ]
Report 2B: Details of Arbitration Proceedings (where BO is a party) during 2009-10: Updated on mmm dd yyyy (to be updated every quarter)(In excel sheet)Sl.No.Name ofArbitratorNo. ofAwardsPassedNo. of Awards in favor ofBOsNo. ofAwardsappealedNo. ofAwardsImplementedNo. of cases pending for redressal at the end of periodFiled by DP Filed by BO Pending For more than6 monthsFor more than 3 months,but less than 6 months123NTotal(In case of panel of arbitrators, the cases / awards would appear against every member of the panel)(Arrange the arbitrators in descending number of awards passed by them during the period)[ 285 ]
Report 3A: Penal Actions against Depository Participants (DPs) during 2008-09: Updated on mmm dd yyyy (to be updated every quarter) (inexcel sheet)Sl.No.Name ofDPRegistrationNo.No. ofComplaintsreceivedAction against DP, its authorized person and employees togetherNo. of Penal Orders issued Monetary Penalties levied (Rs. lakh) No. ofForcomplaintsFor othersForcomplaintsFor othersArbitrationAwards issuedagainst DP123N[ 286 ]
Report 3B: Penal Actions against Depository Participants (DPs) during 2009-10: Updated on mmm dd yyyy (to be updated every quarter) (inexcel sheet)Sl.No.Name ofDPRegistrationNo.No. ofComplaintsreceivedAction against DP, its authorized person and employees togetherNo. of Penal Orders issued Monetary Penalties levied (Rs. lakh) No. ofForcomplaintsFor othersForcomplaintsFor othersArbitrationAwards issuedagainst DP123N[ 287 ]
Report 4A: Redressal of Complaints lodged by investors against Listed Companies during 2008 -09: Updated on mmm dd yyyy (to be updatedevery quarter) (In excel format)Sl.No.Name of the CompanyNo. of ComplaintsReceived Non-Actionable*Pending forRedressed throughDepositoryRedressal withDepository123NTotal*Non actionable means the complaint that are incomplete / outside the scope of Depository(Arrange the companies in descending number of complaints filed against them during the period)[ 288 ]
Report 4B: Redressal of Complaints lodged by investors against Listed Companies during 2009 -10: Updated on mmm dd yyyy (to be updatedevery quarter) (In excel format)Sl.No.Name of the CompanyReceived Non-Actionable*Pending forRedressed throughDepositoryNo. of ComplaintsRedressal withDepository123NTotal*Non actionable means the complaint that are incomplete / outside the scope of Depository(Arrange the companies in descending number of complaints filed against them during the period)[ 289 ]
TypeType II aI bI cI dI eType IIII aII bII cII dType IIIIII aIII bType IVIV aIV bIV cIV dIV eIV fIV gType VV aV bV cDetailsAccount Opening RelatedDenial in opening an accountTable 1 AAccount opened in another name than as requestedNon receipt of Account Opening KitDelay in activation/ opening of accountNon Receipt of copy of DP Client Agreement/Schedule A of ChargesDemat/Remat RelatedDelay in Dematerialisation request processingDelay in Rematerialisation request processingDelay in/ Non-Receipt of Original certificate after demat rejectionNon Acceptance of demat/remat requestTransaction Statement RelatedDelay in/ Non-Receipt of Statements from DPDiscrepancy in Transaction statementImproper Service RelatedInsistence on Power of Attorney in its favourDeactivation/ Freezing/ Suspension relatedDefreezing relatedTransmission RelatedPledge RelatedSMS RelatedNon-updation of changes in account (address/ signatories/bank details/ PAN/Nomination etc.)Charges RelatedWrong/ Excess ChargesCharges paid but not creditedCharges for Opening/closure of AccountType VI Delivery Instruction Related (DIS )VI aVI bVI cType VIIVII aVII bType VIIIVIII aVIII bNon acceptance of DIS for transferDelay in/ non Execution of DISDelay in Issuance / Reissuance of DIS BookletClosureNon closure/ delay in closure of accountClosure of a/c without intimation by DPManipulation/ Unauthorised ActionUnauthorised Transaction in accountManipulation[ 290 ]
VIII cType IXIX aIX bIX cType XTypeII aI bI cIIIIIIVVUnauthorised changes in account (address/ details/PAN etc.) signatories/bankCompany/ RTA relatedAction – CashAction – Non–CashInitial Public Offer/ Follow-on Public Offer RelatedOthers** StatusDescriptionNon actionableComplaint incompleteOutside the scope of DepositoryPertains to non-responding company.ResolvedUnder ProcessReferred to ArbitrationForwarded to Company/RTA for appropriate action.Circular No.Sub : SEBI Circular - Exclusive E-mail Id for redressal of Investor<strong>NSDL</strong>/POLICY/Complaints2006/0066 Attention of Depository Participants (DPs) is invited to SEBI Circular No. MRD/Date: December 27, DoP/Dep/SE/Cir-22/06 dated December 18, 2006 with respect to designating2006 an exclusive e-mail ID of the grievance redressal division / compliance officerin which the investors would be able to register their complaints and alsotake necessary follow-up actions as necessary. Copy of the SEBI circular isenclosed for your information and necessary action.For the information of DPs, <strong>NSDL</strong> has already designated an exclusive emailID i.e. relations@nsdl.co.in for registration of investor complaints.AnnexureGENERAL MANAGERMARKET REGULATION DEPARTMENT1. All Stock Exchanges2. <strong>NSDL</strong>3. CDSLMRD/DoP/Dep/SE/Cir-22/06December 18, 2006Dear Sir/s,Sub: Exclusive e-mail ID for redressel of Investor Complaints.1. SEBI has been mandated, inter-alia, under the SEBI Act, 1992 to protectthe interests of investors in the Indian securities market. To this end,several investor protection measures and regulatory reforms have beeninitiated by SEBI from time to time for the benefit of investors and to[ 291 ]
make the Indian securities market a more transparent and safer placefor their investments.2. In the recent past, SEBI has been receiving representations from variousinvestors requesting for a direct and quicker forum for enabling themto register their complaints expeditiously with the intermediaries/listedcompanies/stock exchanges. It has also been observed in several casesthat pursuant to registering a complaint, the investors do not have anymode for a follow-up or monitoring the processing of their complaints.3. In order to address the aforesaid representations, it is felt desirable todesignate an exclusive e-mail ID of the grievance redressel division /compliance officer in which the investors would be able to registertheir complaints and also take necessary follow-up actions as necessary.Such a process would not only expedite the redressal of the complaintsof the investors but also enable several investors across the country toregister their complaints through a single, centralized, exclusive e-mail ID that is designated for the purpose.4. Accordingly, all the stock exchanges/registered brokers/registered subbrokers/listedcompanies/depositories/registered depositoryparticipants are advised to designate an e-mail ID of the grievanceredressel division/compliance officer exclusively for the purpose ofregistering complaints by investors. The above entities are also advisedto display the email ID and other relevant details prominently on theirwebsites and in the various materials/pamphlets/advertisementcampaigns initiated by them for creating investor awareness.5. The Stock Exchanges are advised to :5.1 make necessary amendments to the relevant bye-laws, rules andregulations and clauses of the listing agreement for theimplementation of the above decision immediately;5.2 bring the provisions of this circular to the notice of the memberbrokers/clearing members of the exchange/listed companies andalso to disseminate the same on their websites; and5.3 communicate to SEBI, the status of the implementation of theprovisions of this circular in the Monthly Development Report.6. The depositories are advised to:-6.1 bring the provisions of this circular to the notice of the DPs of thedepositories and also to disseminate the same on their websites;6.2 include the details of the e-mail ID in the advertisement campaignsreleased by them from time to time for better understanding ofthe investors;6.3 make necessary amendments to the relevant bye-laws and businessrules for the implementation of the above decision immediately,as may be applicable/necessary; and6.4 communicate to SEBI, the status of the implementation of theprovisions of this circular in the Monthly Development Report[ 292 ]
7. This circular is being issued in exercise of the powers conferred bySection 11 (1) of Securities and Exchange Board of India Act, 1992 toprotect the interest of investors in securities and to promote thedevelopment of, and to regulate, the securities market.Yours faithfully,V S SUNDARESANGrievance redressal - reportingCircular No.Sub: Revision of Investor Grievance Report Format<strong>NSDL</strong>/POLICY/This is further to Circular Nos. <strong>NSDL</strong>/PI/98/500 dated October 6, 1998, <strong>NSDL</strong>/2010/0040 PI/2001/0191 dated January 31, 2001, <strong>NSDL</strong>/PI/2003/1871 dated NovemberDate: April 19, 2010 25, 2003, <strong>NSDL</strong>/PI/2004/0183 dated January 29, 2004 and <strong>NSDL</strong>/PI/2004/1688dated September 16, 2004 relating to submission of Investor Grievance Reports(IGRs) by Participants for a particular month by 10 th of the following month, ina specified format.All Participants are hereby informed that :-1. IGR format has been revised and enclosed as Annexure. The IGR in revisedformat is to be submitted by the Participants from April 2010 onwardsi.e. IGR in new format for the month of April 2010 has to besubmitted to <strong>NSDL</strong> by May 10, 2010.2. IG Report may be forwarded electronically i.e. via email atdp_igreport@nsdl.co.in from the email ID of the Compliance Officer.Alternatively, the report can be submitted in hard copy.3. Where the Participants have not received any grievance / complaint in agiven month, a nil report should be submitted to <strong>NSDL</strong>.AnnexureINVESTOR GRIEVANCE REPORT FORMAT FOR PARTICIPANTDP Name:IG Report for the month ofDP Id:Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Account OpeningRelatedDenial in opening anaccountAccount opened inanother name thanas requested[ 293 ]
Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Non receipt ofDemat AccountOpening KitDelay in activation/opening of accountNon Receipt of copyof DP ClientAgreement/Schedule A ofChargesDemat/rematRelatedDelay inDematerialisationrequest processingDelay inRematerialisationrequest processingNon Acceptance ofdemat/rematrequestTransactionStatement RelatedDelay in/ Non-Receipt ofStatementsDiscrepancy intransactionstatementImproper ServicesRelatedInsistence of Powerof Attorney in itsfavour.Deactivation/Freezing/Suspension relatedDefreezing relatedTransmission relatedPledge related[ 294 ]
Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)SMS relatedNon-updation ofchanges in account(address/signatories/bankdetails/ PAN/Nomination etc.)Charges RelatedCharges levied forOpening/ closure ofAccountCharges paid butnot creditedWrong/ ExcessChargesDeliveryInstruction RelatedNon acceptance ofDIS for transferDelay in/ nonExecution of DISDelay in Issuance /Reissuance of DISBookletAccount ClosureRelatedNon closure/ delayin closure ofaccountClosure of a/cwithout intimationby DPManipulation/Unauthorisedaction RelatedUnauthorisedTransaction inaccountManipulationUnauthorisedchanges in account(address/signatories/bankdetails/ PAN/Nomination etc.)Erroneous Transfer[ 295 ]
Nature of No of No of No of Manner No of No of ReasonComplaint cases cases cases of cases cases forpending received resolved Redressal pending at pending pendencyat the during the during the (Letter / the end of for more asbeginning month month E-mail the month than shown inof the month etc.) 30 days column(6)(1) (2) (3) (4) (5) = (1+2-3) (6) (7)Company/RTArelatedAction – CashAction – Non CashInitial Public Offer/Follow-on PublicOffer RelatedOthers (Specify)TotalCircular No.Attention of Participants is invited to Bye Law 6.3.6 (iii) of the Bye Laws of<strong>NSDL</strong>/PI/2003/1871 <strong>NSDL</strong> which requires every Participant to submit to the Depository a reportDate : November 25, giving number of complaints received from Clients, nature of complaints,2003 status and manner of redressal, every month (latest by 10th of the followingmonth). Participants are hereby informed that with effect from January 1,2004, the aforesaid report can be submitted to <strong>NSDL</strong> either electronically(via e-mail) or in hard copy form. Such details can be e-mailed to <strong>NSDL</strong> atdp_igreport@nsdl.co.in.For submitting the reports electronically, we advise the Participants to providethe e-mail Id of the compliance officer to <strong>NSDL</strong> and ensure that the report issubmitted only from the e-mail Id of that person. All Participants aretherefore advised to provide e-mail Id's of compliance officers latest byDecember 1, 2003.Circular No. With reference to our Circular No. <strong>NSDL</strong>/PI/98/500 dated October 6, 1998,<strong>NSDL</strong>/PI/2001/0191 attention of all Participants is once again invited to Regulation 20(2)(e) ofDate : January 31, SEBI (Depositories and Participants) Regulations, 1996 which states that the2001 Participant shall redress the grievances of beneficial owners within thirtydays of the date of the receipt of the complaint and keep the Depositoryinformed about the number and the nature of redressals. Attention is alsoinvited to Bye Law 6.3.6 (iii) of <strong>NSDL</strong> Bye Laws which states that the Participantshall submit to the Depository the number of complaints received from Clients,their nature, status and manner of redressal once every month.Participants are advised to submit this report every month to Mr. HarpinderSaini, Officer-In-Charge, Investor Grievance Cell, <strong>NSDL</strong> latest by 10th of thefollowing month. In case there are no grievances, a nil report should besubmittedCircular No.<strong>NSDL</strong>/PI/98/500Date : October 6,1998Attention of all Participants is invited to Regulation 20(2)(e) of SEBI(Depositories and Participants) Regulations, 1996 which states that theparticipant shall redress the grievances of beneficial owners within thirtydays of the date of the receipt of the complaint and keep the depositoryinformed about the number and the nature of redressals. Attention is also[ 296 ]
invited to Bye Law 6.3.6 (iii) of <strong>NSDL</strong> Bye Laws which states that the Participantshall submit to the Depository the number of complaints received from Clients,their nature, status andmanner of redressal once every month.Participants are advised to submit this report every month to Mr. HarpinderSaini, Officer-In-Charge, Investor Grievance Cell, <strong>NSDL</strong> on or before 10th ofthe following month. In case there are no grievances, a nil report should besubmitted.❑ ❑ ❑[ 297 ]
NOTES[ 298 ]
Regulation 52Bye Law 6.3.238. DP Service CentresNo participant shall assign or delegate its functions as participant to anyother person, without the prior approval of the depository.No Participant shall assign its business as a Participant to any other personexcept with the prior approval of the Executive Committee which may notifyfrom time to time the terms and conditions subject to which it may assign itsbusiness as a Participant to any other person.Sr. No. Nature of Non-Compliance PenaltyRule 18.1.1 (31)Rule 18.1.1 (32)Rule 18.1.1 (21)Rule 18.1.1 (33)Qualified personnel (NCFM / <strong>NSDL</strong>certified for depository operations)not appointed in at least 90% of thetotal service centres (other thandrop boxes) of the Participants.Depository services are offeredthrough service centres withoutapproval of DepositoryTermination / Closure of franchisee/branch services contrary toDepository instructions.(a) Carrying out certain functionswhich are prohibited byDepository through franchisees(like in-person verification ofclients at the time of opening ofaccounts and verification ofdelivery instruction slips).(b) Dispatch of periodic transactionstatements by Participantsthrough its service centre(branch as well as franchisees)other than one which is directlyconnected to the Depository orthrough its centralisedprocessing unit under thesupervision of its head office.Adequate internal controls for the branches of Depository ParticipantsCircular No.Sub : SEBI Circular - adequate internal controls for the branches of<strong>NSDL</strong>/POLICY/Depository Participants2007/0038 A copy of SEBI's Circular No. MIRSD/DPS-III/Cir-9/07 dated July 3, 2007Date: July 9, 2007 regarding ensuring compliance with Regulation 46 of the SEBI (Depositoriesand Participants) Regulations, 1996 by the branches of Depository Participants(DPs) is enclosed for the information of all DPs.DPs are requested to take note of the above.[ 299 ]Rs.1,000 per month per servicecentre (other than drop box).Further, Rs. 5,000 per month perservice centre upon recurrence ofthe deviation in the same servicecentre wherein non-compliance wasobserved earlier.In case of new service centre or incase of resignation or transfer ofqualified personnel from the existingservice centre, time period of threemonths will be allowed within whichqualified personnel should beappointed.Rs. 2,500 per occasionRs.500 per occasion.Matter to be referred to DisciplinaryAction Committee.
AnnexureCHIEF GENERAL MANAGERMARKET INTERMEDIARIES REGULATION AND SUPERVISION DEPARTMENTMIRSD/DPS-III/ Cir - 9 /07July 3, 2007The Chairman & Managing DirectorThe Managing Director & CEONational Securities Depository Ltd.Central Depository Services (India) Ltd.Trade World,Phiroze Jeejeebhoy Towers,Kamala Mills Compound,Dalal Street, Fort,Senapati Bapat Marg, Lower Parel, Mumbai 400 023Mumbai – 400 013Dear Sir/s,Sub: Supervision of branches of depository participants1. It has come to SEBI’s notice that the Depository Participants (DPs) are operating through branchoffices which are having Depository Participant Modules (DPMs) directly linked to the Depositoryserver and branch offices which are connected through back offices software of the DP. CertainDPs are connected with the Depository through one or more DPMs. Some of the DPs have offlinebranches which function either as full fledged braches offering all DP services or only as collectioncentre.2. In terms of Regulation 46 of the SEBI (Depositories and Participants) Regulations, 1996, every DPshall have adequate mechanism for the purpose of reviewing, monitoring and evaluating its internalaccounting controls and systems. Further, clause 19 of the Code of Conduct for Participants containedin the Third Schedule to the Regulations inter alia states that the DP shall ensure that it hassatisfactory internal control procedure in place. It is clarified that these provisions apply to DPsin respect of all their branches also. DPs are therefore required in terms of these provisions to putin place appropriate mechanisms to ensure that their branches are carrying on the operations incompliance with the applicable regulations, bye-laws, etc. Further, DPs are also required to putin place suitable internal control systems to ensure that all branches are exercising due diligencein opening accounts, complying with KYC requirements, in ensuring systems safety in complyingwith client instructions, manner of uploading client instructions, in verifying signatures and inmaintaining client records, etc. DPs shall also ensure that the branches are suitably integrated.The DPs whose systems do not measure up to the above are hereby advised to ensure suchcompliance immediately.3. Depositories shall examine the adequacy of the above mechanisms during their inspections of DPs.The Depositories shall also carry out surprise inspections/ checks of the DP branches apart fromthe regular inspection of the DPs.4. Depositories shall also put in place appropriate mechanisms for monitoring opening of branches byDPs.5. The Depositories are advised to:-a. Bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website;b. Include the aforesaid clarifications, as applicable, in the advertisement campaigns releasedby them from time to time for better understanding of the investors;c. Make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary;d. Communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report.6. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,P K Kuriachen[ 300 ]
Branch direct connectivity - More than 5000 accountsCircular No.All Participants are hereby informed that SEBI has in the meeting relating to<strong>NSDL</strong>/PI/99/689 dematerialisation of securities held on August 16, 1999, inter-alia, decidedDate: August 27,1999 that the branch offices of Participants that are handling more than 5000accounts should have either direct electronic connectivity with the Depositoryor with the office of the Participant which is directly connected to theDepository. All Participants are therefore requested to inform us the numberof branches which are handling more than 5000 accounts, how many of theseare directly connected with <strong>NSDL</strong> and how many of these are connected withthe office of the Participant which is directly connected to the Depository.SEBI has also decided that in view of the increase in volume of transactions,number of accounts, dematerialisation requests and forthcoming rollingsettlement, the Participants should open more branches, particularly in thecities where such services are still not available.SEBI directive on creating awareness among demat account holders for PAN cardCircular No.Sub : SEBI directive on creating awareness among demat account holders<strong>NSDL</strong>/POLICY/for PAN card.2006/0056 Attention of all Depository Participants (DPs) is invited to our circular no.Date: November 21, <strong>NSDL</strong>/POLICY/2006/0007 and <strong>NSDL</strong>/POLICY/2006/0043 dated March 3 and2006 September 27, 2006 respectively regarding SEBI directive on PermanentAccount Number (PAN).SEBI in its meeting discussed the issue of creating awareness among the demataccount holders about PAN card being mandatory for demat account.DPs are advised to display posters and pamplets provided by <strong>NSDL</strong> in thisregard prominently, at each of their offices from where the depository servicesare being provided by them.DPs may also make their clients aware about this requirement by disseminatingsimilar information alongwith their mailers or through their website etc.,with a view to ensure compliance in this regard by account holders as per thedeadline prescribed by SEBI for the same on or before December 31, 2006.Qualified personnel - MandatoryCircular No. In continuation to our Circular Nos. <strong>NSDL</strong>/PI/99/637 dated August 13, 1999<strong>NSDL</strong>/PI/2000/1044 and <strong>NSDL</strong>/PI/2000/223 dated February 24, 2000, Participants are herebyDate : June 30,2000 informed that <strong>NSDL</strong> has extended the deadline for mandatory appointmentof persons qualified in the Certification Programme. The revised schedule isas under 50% of the existing branches - October 1, 2000 all branches -January1, 2001.Circular No.In order to enhance the standards of client servicing and operational efficiency<strong>NSDL</strong>/PI/2000/864 it is necessary to create a pool of qualified manpower. Keeping the need forDate : June 6, 2000 service standards in mind, <strong>NSDL</strong> launched a certification program on depositoryoperations in May 1999. This examination titled "<strong>NSDL</strong>-Depository OperationsModule" is based on the infrastructure of NCFM (NSE's certification in financialmarkets).This examination can be taken at Mumbai, Delhi, Calcutta, Chennai,Hyderabad, Ahmedabad and Pune at NSE offices. Candidates should score aminimum of 60% of marks to get a certificate in the <strong>NSDL</strong>-Depository OperationsModule.To increase the scope of coverage and overcome the difficulty expressed bymany candidates in completing the examination in the allotted time, thefollowing changes have been incorporated in the <strong>NSDL</strong>-Depository OperationsModule with effect from June 7, 2000:1. The test duration will be 75 minutes instead of 30 minutes.[ 301 ]
Circular No.<strong>NSDL</strong>/PI/99/637Date: August 13,19992. The total marks for the examination will be 100 instead of 50.It is mandatory that 50% of all branches of every Participant must have atleastone employee who has successfully cleared the certification program.Combined efforts of <strong>NSDL</strong> and its business partners alongwith timely regulatorysupport at critical junctures has facilitated the adoption of the depositoryculture by most of the players in the Indian Capital Market. Depository servicesare available in all major cities and towns across the country. Almost all theactively traded scrips are available for dematerialisation and trading in thedemat form. Trading in depository securities is now available in ten majorstock exchanges across the country.<strong>NSDL</strong> recognises that quantitative progress would be ineffective if it is notbacked by quality depository services. Thus, it was imperative to ensure thatthe staff of our business partners are sensitised to service standards andefficient depository operations.Towards this objective, <strong>NSDL</strong> conducted a series of Branch EmpowermentProgrammes (BEP) for the staff of the Participants across the country. Theseprogrammes focused on the importance of service standards and adhering tothese standards offered by the Participants to their clients. <strong>NSDL</strong> has alsoembarked upon a series of Procedural Training Programmes (PTP) which aremore detailed and cover all the operational aspects of depository services.As you are aware, with quality depository services in mind, <strong>NSDL</strong> launched aCertification Programme on depository. Candidates successfully clearing sucha programme add to the human resources pool qualified in depositoryoperations.Participants are hereby informed that it will be mandatory for all branches,including franchisees, of Participants to have atleast one person qualified inthe Certification Programme in a phased manner, as per the schedule givenbelow :1. For New Branches - Oct 1, 19992. For 50% of the existing branches - Jan 1, 20003. For all branches - April 1, 2001Additional information regarding the Certification Programme is available onthe website of <strong>NSDL</strong> at www.nsdl.co.in. The same can also be obtained bysending an email to ncfm@nsdl.co.in or writing to Mr. V. R. Narasimhan, SeniorVice President, National Securities Depository Limited.List of holidaysCircular No.Sub : Intimation of list of holidays for the calendar year to clients by<strong>NSDL</strong>/POLICY/Participants.2006/0017 All Participants are hereby informed that <strong>NSDL</strong> has been receiving complaintsDate : June 5, 2006 from the demat account holders (Clients) that the Participants do not giveadequate notice to the Clients about non-availability of depository servicesdue to holidays. In order to avoid hardship to the Clients, Participants areadvised to send a communication to all the Clients about the list of holidaysfor the calendar year. Further, the list of holidays should be displayed in aprominent place, at each of the office from where the depository servicesare being provided.Submission of details of all places from where depository services are offeredCircular No.Sub: Discontinuance of submitting details of service centres every year<strong>NSDL</strong>/POLICY/As all Participants are aware, Participants are required to submit the details2010/0006 of all the places from where they are offering depository services in theDate: January 13, 2010 prescribed format as on March 31, by June 30, every year (Ref.: Circular No.<strong>NSDL</strong>/POLICY/2007/0055 dated September 25, 2007). The service centre[ 302 ]
details information is made available on website of <strong>NSDL</strong>. Any addition/deletion/modification as informed by the Participants are updated on thewebsite. Participants are requested to verify the same on <strong>NSDL</strong> website atwww.nsdl.co.in and inform about discrepancies, if any. In view of the aforesaid,the Participants will no longer be required to submit the full list of servicecentres every year, as mentioned above. However, Participants must ensureto obtain prior approval of <strong>NSDL</strong> for opening new service centres.Accordingly, the 'Compliance Schedule' informed to Participants vide CircularNo. <strong>NSDL</strong>/POLICY/2009/0066 dated July 28, 2009 is revised and enclosed asAnnexure 'A' highlighting the changes and as Annexure 'B' without highlightingany changes.For any clarification with respect to service centres, Participants are requestedto contact Mr. Dilip Singhal / Mr. Kaushal Shah on 022-24994363 / 4214.Sr.No.1. Investor GrievanceReport (Monthly)Annexure AParticulars Reference Deadline Manner of sending(i) Circular No. <strong>NSDL</strong>/PI/98/500dated October 6, 1998.(ii) Circular No. <strong>NSDL</strong>/PI/2004/1688 dated September 16,2004.By 10th of thefollowingmonth.By email atdp_igreport@nsdl.co.in.Alternatively, by hardcopy to the InvestorRelationship Cell.2. ComplianceCertificate (July -December)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.January 31stevery year.By hard copy toBusiness PartnerInspectionDepartment.3. Charge Structure. (i) Circular No. <strong>NSDL</strong>/POLICY/2006/0064 dated December26, 2006.(ii) Circular No. <strong>NSDL</strong>/POLICY/2007/0003 dated January 8,2007.April 30thevery year.By email atdpfees@nsdl.co.in4. Internal/Concurrent AuditReport (October -March)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.May 15thevery yearBy hard copy toBusiness PartnerInspectionDepartment.5. ComplianceCertificate(January - June)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.July 31stevery yearBy hard copy toBusiness PartnerInspectionDepartment.6. NetworthCertificate andAudited FinancialStatements.Circular No. <strong>NSDL</strong>/PI/98/414dated September 1, 1998.September30th everyyear.By hard copy toParticipant InterfaceDepartment.7. Internal/Concurrent AuditReport (April -September)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.November15th everyyearBy hard copy toBusiness PartnerInspectionDepartment.[ 303 ]
Sr.No.Annexure BParticulars Reference Deadline Manner of sending1. Investor GrievanceReport (Monthly)(i) Circular No. <strong>NSDL</strong>/PI/98/500dated October 6, 1998.(ii) Circular No. <strong>NSDL</strong>/PI/2004/1688 dated September 16,2004.By 10th of thefollowingmonth.By email atdp_igreport@nsdl.co.in.Alternatively, by hardcopy to the InvestorRelationship Cell.2. ComplianceCertificate (July -December)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.January 31stevery year.By hard copy toBusiness PartnerInspectionDepartment.3. Charge Structure. (i) Circular No. <strong>NSDL</strong>/POLICY/2006/0064 dated December26, 2006.(ii) Circular No. <strong>NSDL</strong>/POLICY/2007/0003 dated January 8,2007.April 30thevery year.By email atdpfees@nsdl.co.in4. Internal/Concurrent AuditReport (October -March)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.May 15thevery yearBy hard copy toBusiness PartnerInspectionDepartment.5. ComplianceCertificate(January - June)Circular No. <strong>NSDL</strong>/ POLICY/2006/0023 dated July 6, 2006.July 31stevery yearBy hard copy toBusiness PartnerInspectionDepartment.6. NetworthCertificate andAudited FinancialStatements.Circular No. <strong>NSDL</strong>/PI/98/414dated September 1, 1998.September30th everyyear.By hard copy toParticipant InterfaceDepartment.7. Internal/Concurrent AuditReport (April -September)Circular No. <strong>NSDL</strong>/ POLICY/2008/0077 dated November 3, 2008.November15th everyyearBy hard copy toBusiness PartnerInspectionDepartment.Circular No.Sub: Submission of details of all places from where depository services<strong>NSDL</strong>/POLICY/are offered and approval of new branches and franchisees in the2007/0055 prescribed formatDate: September Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/25, 2007 POLICY/2007/0038 dated July 9, 2007 wherein a copy of the SEBI Circular No.MIRSD/DPS-III/Cir-9/07 dated July 3, 2007 regarding ensuring compliance withRegulation 46 of the SEBI (Depositories and Participants) Regulations, 1996by the branches of DPs was enclosed for the information of all DPs. In light of[ 304 ]
the SEBI guidelines, the requirement of obtaining approval for branch/franchisee and submission of such information to <strong>NSDL</strong> have undergonechanges, which are undermentioned:1) Submission of details of all places from where the depository servicesare offered :As all DPs are aware, <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/POLICY/2006/0036 dated September 7, 2006 informed DPs to provide the details ofall the places from where they are offering any of the depository servicesto their Clients. In light of the SEBI circular, the prescribed format hasundergone certain changes. Hence, DPs are advised to provide the detailsof all such places from where the depository services are offered as ofSeptember 30, 2007, in the format (MS Excel Sheet) mentioned as perAnnexure 1 and e-mailed to <strong>NSDL</strong> at servicecentreinfo@nsdl.co.in latestby October 31, 2007.2) Approval for opening of new branches and franchisees :As all DPs are aware, DPs are required to obtain permission of <strong>NSDL</strong>prior to appointment of a franchisee (whether offering the services asa service centre, collection centre, drop box centre or called by anyother name) (Refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/PI/2003/0282 dated February18, 2003). The format for submission of franchisee details has undergonecertain changes, in light of the SEBI circular. If DPs wish to appoint afranchisee on or after October 1, 2007, DPs would be required to obtainthe permission of <strong>NSDL</strong> and submit the franchisee details in the format(MS Excel sheet) mentioned as per Annexure 2.Further, on the similar lines, DPs would also be required to obtain thepermission of <strong>NSDL</strong> for opening of a new branch (whether offering theservices as a service centre, collection centre, drop box centre or calledby any other name). The details of such branch should be provided inthe format (MS Excel sheet) mentioned as per Annexure 3.3) As regards mode of submission, Annexure 2 and 3 should be submittedto <strong>NSDL</strong> strictly in the prescribed format (MS Excel sheet) in hard copysigned by the compliance officer as well as in soft copy atservicecentreinfo@nsdl.co.in4) As all DPs are aware, <strong>NSDL</strong> vide its Circular No. <strong>NSDL</strong>/PI/99/689 datedAugust 27, 1999, had informed DPs that in case the branch offices ofDPs are handling more than 5000 accounts, they should have eitherdirect electronic connectivity with the DP or with the office of the DP,which is directly connected to the Depository. In view of this, if any ofthe branch/franchisee does not comply with this requirement, DPs wouldbe required to mention the same in the compliance certificate submittedfrom January 31, 2008 onwards (i.e. for the half year ending December31, 2007).5) DPs would be required to submit the details of all the branches/franchisees offering depository related services as of March 31, by June30, every year. The details should be strictly submitted in the prescribedformat (Annexure 1) and e-mailed to <strong>NSDL</strong> atservicecentreinfo@nsdl.co.in[ 305 ]
6) DPs are also advised to note that any subsequent updates (addition/deletion/modification) in the above information should be intimatedto <strong>NSDL</strong> at the above e-mail id within seven days of such change.Annexure 1 - List of Branches / FranchiseesSr. DP Category - Sub- Contact Add1 Add2 Add3 City Pin State STD Phone Fax Email In case of Franchisee NCFM Qualified PersonNo. Name Place Category- Person codefrom Offeringwhere the services asDP wishes Branch /to open Franchisee /the ServiceFranchisee centre,Collectioncentre, dropbox centreor called byany othernameManual ElectronicProcessingprocessingY/N Y/NName Date FranchisorofFranchiseeagreement<strong>NSDL</strong>executed. Ifapproval yes, is thecopymaintained inthe records. Ifno, pleasespecify thereason for notexecuting theagreement.Name RegistrationnumberExpiryDateType ofconnectivitywith theback officeof themain /additionalDPM setup?Online /OfflineAccountopeningDemat /RematTypes of service provided and process involved - manual/electronic*Issuance ofDeliveryInstructionSlipsProcessing /Execution ofDeliveryInstructionsPledgeSecuritiesLending andBorrowingClientModificationlike change ofaddress etcManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingY/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/NDispatch ofTransactionstatementY/NAny otherserviceprovided -please specifyin the box[ ]Numberof demataccountsservicedRemarks* DPs are advised to mention whether the activities are processed manually orthrough electronically. In case if it is manually processed, please mention thedetails of target branch/franchisee/DPM set-up i.e. place from where theelectronic processing happens, in the remark column.Manual processing means collection of documents and submitting it to the requireddestination. Electronic processing means entering the data into the computersystem or back office for onward transmission to relevant main office electonically."Online" means the source entity has established a direct electronic connectivitywith the back office of the main / additional DPM set-up. "Offline" means nodirect connectivity is established with the main / additional DPM set-up.[ 306 ]
NameFranchisee DetailsManual ElectronicProcessingprocessingY/N Y/NAnnexure 2 - Appointment of FranchiseeSr. DP Category - Sub- Please Contact Add1 Add2 Add3 City Pin State STD Phone Fax EmailNo. Name Place Category - mention Person codefrom - Offering thewhere the services as number ofDP wishes Franchisee years ofto open / Service experiencethe centre, in theFranchisee Collection capitalcentre, marketdrop boxcentre orcalled byany othernameDate FranchisorofFranchiseeagreement<strong>NSDL</strong>executed. Ifapproval yes, is thecopymaintained inthe records. Ifno, pleasespecify thereason for notexecuting theagreement.NCFM Qualified PersonName RegistrationnumberExpiryDateType ofconnectivitywith theback officeof themain /additionalDPM setup?Online /OfflineAccountopeningDemat /RematTypes of service proposed to be provided and process involved - manual/electronic*Issuance ofDeliveryInstructionSlipsProcessing /Execution ofDeliveryInstructionsPledgeSecuritiesLending andBorrowingClientModificationlike change ofaddress etcManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingY/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/NDispatch ofTransactionstatementY/NAny otherserviceprovided -please specifyin the box[ ]Numberof demataccountsservicedRemarks* DPs are advised to mention whether the activities are processed manually orthrough electronically. In case if it is manually processed, please mention thedetails of target branch/franchisee/DPM set-up i.e. place from where theelectronic processing happens, in the remark column.Manual processing means collection of documents and submitting it to the requireddestination. Electronic processing means entering the data into the computersystem or back office for onward transmission to relevant main office electonically."Online" means the source entity has established a direct electronic connectivitywith the back office of the main / additional DPM set-up. "Offline" means nodirect connectivity is established with the main / additional DPM set-up.[ 307 ]
Manual ElectronicProcessingprocessingY/N Y/NAnnexure 3 - Appointment of BranchSr. DP Category - Sub- Contact Add1 Add2 Add3 City Pin State STD Phone Fax EmailNo. Name Place Category - Person codeFrom Offeringservices aswhere theBranch /DP wishes Serviceto open centre,Collectionthe branchcentre, dropbox centreor called byany othernameNameNCFM Qualified PersonRegistrationnumberExpiry DateType ofconnectivitywith thebackoffice ofthe main /additionalDPM setup?Online /OfflineAccountopeningDemat /RematTypes of service proposed to be provided and process involved - manual/electronic*Issuance ofDeliveryInstructionSlipsProcessing /Execution ofDeliveryInstructionsPledgeSecuritiesLending andBorrowingClientModificationlike change ofaddress etcManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingManualProcessingElectronicprocessingY/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/N Y/NDispatch ofTransactionstatementY/NAny otherserviceprovided -please specifyin the box[ ]Numberof demataccountsservicedRemarks* DPs are advised to mention whether the activities are processed manually orthrough electronically. In case if it is manually processed, please mention thedetails of target branch/franchisee/DPM set-up i.e. place from where theelectronic processing happens, in the remark column.Manual processing means collection of documents and submitting it to the requireddestination. Electronic processing means entering the data into the computersystem or back office for onward transmission to relevant main office electonically."Online" means the source entity has established a direct electronic connectivitywith the back office of the main / additional DPM set-up. "Offline" means nodirect connectivity is established with the main / additional DPM set-up.[ 308 ]
Branch services - Display of type of servicesCircular No.<strong>NSDL</strong> has noticed that Participants provide depository services to their clients<strong>NSDL</strong>/PI/2000/1531 through their Service Centres located at different places and all centres doDate : August 24,2000 not provide similar services. These services are of various types, such as :• Account Opening;• Dematerialisation / Rematerialisation;• Accepting debit / credit instruction forms;• Providing transaction statements; or• Any other depository services.In the interest of transparency, Participants are hereby advised that theyshould display the types of services provided by them at each Service Centre.For example, if the Calcutta service center of a Participant is providing onlyaccount opening and dematerialisation services, then it must be mentionedon the display board in the Calcutta office that only these two services areprovided by the Participant at that office. The display board / chart shouldbe prominently visible to the clients.Requirement of NCFM/<strong>NSDL</strong> certified personnel at service centresCircular No.Sub: Amendment to Business Rules - Requirement of NCFM/<strong>NSDL</strong> certified<strong>NSDL</strong>/POLICY/personnel at service centres2009/0012 All Participants are hereby informed that in order to increase the availabilityDate: February 11, 2009 of trained personnel for depository operations, it has been decided to include<strong>NSDL</strong> certified personnel for depository operations in addition to NCFM certifiedpersonnel as eligible persons at service centres of Participants. Accordingly,Sr. No. 33 of Rule 18.1.1 of the Business Rules of <strong>NSDL</strong> has been amended, asper the details given below:Sr. No. Nature of Non-Compliance Penalty(33) Qualified personnel (NCFM / Rs.50 per day per service centre<strong>NSDL</strong> certified for depository (other than drop box) till theoperations) not appointed in appointment of qualified person(s)at least 75% of the total to the extent of shortages.service centres (other thandrop boxes) of the Participants.Clarification regarding franchise/service centre and NCFM qualified personCircular No.<strong>NSDL</strong>/PI/2003/1047Date : June 25,2003Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/2003/0282dated February 18, 2003 advising Participants to obtain <strong>NSDL</strong>'s prior approvalfor appointing franchisee/service centre, etc. In this regard, Participantshave sought clarification about the meaning of franchisee/service centre,etc. and whether an NCFM qualified person is required to be appointed at allsuch places.It is hereby clarified that any depository related services offered to theinvestors whereby they can interact with a person (who could be an employeeof the Participant or of an outside agency appointed by the Participant) forsubmitting various documents and receiving acknowledgment thereof, willbe treated as a Branch / franchisee/service centre. In such circumstances, aParticipant can offer services to its clients only if one employee of the[ 309 ]
Participant or any other person providing the service has qualified in theNCFM (depository module) examination.In case the services are offered to clients where there is no personal contactor interaction (no acknowledgment is given for documents submitted) e.g.drop box kept in a place in which clients can drop their documents, therequirement of NCFM qualified person is not necessary.Branch Services - SEBI directive on Branch connectivityCircular No.<strong>NSDL</strong>/PI/2003/0392Date : March 6,2003All Participants are hereby informed that Securities and Exchange Board ofIndia (SEBI) vide its letter no. CS/4753/2003 dated March 4, 2003 has intimatedto <strong>NSDL</strong> as under:"With the introduction of T+2 settlement from April 1, 2003 it is imperativethat the transfer of securities takes place in an efficient and efficaciousmanner without any settlement failure. This requires that DepositoryParticipants (DPs) throughout the country should have technologicalcompatibility with the existing infrastructure. Since they have their officesin various cities/towns, it is necessary that all the branches of a DP should belinked electronically to its head office. This would ensure that all the clearingand settlement instructions are communicated without fail. This would alsomitigate risk of settlement failure."Participants are advised to ensure compliance of the above.Discontinuation of depository services from Service CentresCircular No.Sub: Discontinuation of depository services from Service Centres<strong>NSDL</strong>/POLICY/All Participants are aware that <strong>NSDL</strong> has vide Circular no. <strong>NSDL</strong>/PI/2002/03462010/0049 dated February 26, 2002 informed Participants about the procedure to beDate: May 10, 2010 followed in case of termination of franchisees. Participants are advised tofollow the procedure as given below for discontinuing depository services fromany type of service centre (branches, franchisees, collection centres, dropboxes or places called by any other name from where depository services areprovided):1. Advance notice of atleast 30 days about discontinuing of depositoryservices is given to all Clients, who are availing depository services throughsuch service centre.2. Clients who are being provided depository services through such servicecentre should be informed about the alternate arrangements made foravailing the services.Information should be given to <strong>NSDL</strong> about discontinuation of depositoryservices from such service centre atleast 30 days in advance.Procedure for Termination of FranchiseeCircular No.All Participants may be aware that as per the Bye Laws of <strong>NSDL</strong>, Participants<strong>NSDL</strong>/PI/2002/0346 are required to take prior approval of <strong>NSDL</strong> before assigning its business toDate : February 26, any person/franchisee for offering depository services. In this regard, it has2002 been observed that whenever a Participant decides to terminate the servicesof a franchisee, the investors who avail of the depository services throughsuch franchisees are not informed. As a result, the investors are put toavoidable hardships. Participants are hereby advised as follows:[ 310 ]
1. The Participant shall terminate the franchisee only after giving noticeof atleast 30 days to all its Clients, who are availing of depository servicesthrough the franchisee.2. The Participant shall inform its Clients who are being provided depositoryservices through the franchisee, about the alternate arrangements madeto service the Clients.3. The Participant shall inform <strong>NSDL</strong> about termination of such franchiseeservices atleast 30 days in advance.❑ ❑ ❑[ 311 ]
NOTES[ 312 ]
9. ChargesRegulation 20 (1) (f)Clause 6 of <strong>NSDL</strong> -DP AgreementClause 1 of DP-Client AgreementClause 8 of DP-Client AgreementClause 9 of DP-Client AgreementThe participant shall pay annual fees specified in Part A of the Second Schedulein the manner specified in Part B thereof.PART A (relevant extract)Annual fees payable by participant Rs. 1000PART B (relevant extract)Fees to be paid to the depository in which the payer is a participant. TheDepository shall forward the fees collected from participants to the Board,with a demand draft or bankers cheque payable to the "Securities and ExchangeBoard of India" at Mumbai.The Participant shall pay such fees and charges that may be payable to <strong>NSDL</strong>in accordance with the schedule specified under the Business Rules and anydeposits or other amounts payable in accordance with the Bye Laws andBusiness Rules.a) In case of any default on the part of the Participant to pay any of theamounts specified above within a period of 30 days from the date ofdemand, without prejudice to the rights of the Depository to takedisciplinary action under Chapter 11 of the Bye Laws, the Participantwill be liable to pay interest at such rate at the rate of not more than24 % or such other rate as may be specified by the Executive Committeefrom time to time on the amount from the due date of payment of suchamount.b) However, the Executive Committee may permit the payment of suchamount even without interest after such due date, provided it is satisfiedthat there exist sufficient grounds for such delayed payment.The Client shall pay such charges to the Depository Participant for the purposeof opening and maintaining his account, for carrying out the instructions ofthe Client and for rendering such other services as may be agreed to fromtime to time between the Depository Participant and the Client as set out inSchedule A. The Depository Participant shall reserve the right to revise thecharges by giving not less than thirty days notice in writing to the Client.On the failure of the Client to pay the charges as laid out in clause (1) of thisagreement within a period of thirty days from the date of demand DepositoryParticipant shall terminate this agreement and close the account of the Clientby requiring it to specify whether the balances in its account be transferredto the account of the Client held with another Participant or be rematerialisedin the manner specified in the Bye laws and Business rules.The Client further agrees that in the event of the Client committing a defaultin the payment of any of the amounts provided in clause (1) within a periodof thirty days from the date of demand, without prejudice to the right of theDepository Participant to close the account of the Client, the DepositoryParticipant may charge interest @ not more than 24% p.a. or such other rateas may be specified by the Executive Committee from time to time for theperiod of such default. In case the Client has failed to make the payment ofany of the amounts as provided in clause (1) of this agreement, the DepositoryParticipant shall have the right to discontinue the Depository services tillsuch time he makes the payment along with interest, if any, after giving twodays notice to the Client.[ 313 ]
Rule 4.1.4The permission to use the DPM shall be subject to the payment by the User ofsuch charges as may be specified by the Depository.Rule 5.3The Participant shall have the discretion to charge any fees to its Clients.Further, the Participant may charge different types of fees to its variousClients.Provided further that the Participant shall file the charge structure with theDepository as and when called for.Policy-SEBI Circular regarding Account Maintenance Charges collected upfront on annual or halfyearly basis on BO accountsCircular No.Sub: Account Maintenance Charges (AMC) collected upfront on annual/<strong>NSDL</strong>/POLICY/half yearly basis on Beneficial Owner (BO) accounts2010/0078 All Participants are advised to note that SEBI has vide circular no. CIR/MRD/Date: July 2, 2010 DP/20/2010 dated July 1, 2010 (copy enclosed) advised that in the event ofclosing of the demat account or shifting of the demat account from oneParticipant to another, the AMC collected upfront on annual/half yearly basisby the Participant, shall be refunded by the Participant to the BO for thebalance of the quarter/s.Participants are advised to ensure compliance with the requirement andcommunicate the same to all the BOs.Securities and Exchange Board of IndiaCIRCULARCIR/MRD/DP/ 20 /2010 July 1, 2010To,All Depositories,Dear Sir(s),Sub: Account Maintenance Charges collected upfront on annual/ half yearly basis on demat accounts1. The Depository Participants (DPs) have a system of collecting account maintenance charge (AMC)from beneficial owners (BOs) towards maintenance of demat accounts for varied periodicity ofcollection (viz. monthly, quarterly, half yearly and annually). It has been noticed that in caseswhere AMC is collected on an annual upfront basis, on closure/shifting of demat account, the AMCfor the balance period for which no service has been provided by the DP, is not refunded to the BO.2. In view of the above, it has been decided that in the event of closing of the demat account orshifting of the demat account from one DP to another, the AMC collected upfront on annual/halfyearly basis by the DP, shall be refunded by the DP to the BO for the balance of the quarter/s. Forinstance, in case annual AMC has been paid by the BO and if the BO closes/shifts his account in thefirst quarter, he shall be refunded the amount of the balance 3 quarters i.e. 3/4th of the AMC.Likewise, if a BO closes/shifts his account in the third quarter, he shall be refunded the amount forthe balance one quarter i.e. 1/4th of the AMC.3. For the purpose of the above requirement the year shall begin from the date of opening of theaccount in quarterly rests.4. The above requirements shall be applicable to all existing and new accounts held with DPs whichcollect annual/half yearly upfront AMC. It is hereby clarified that the above requirements shall notbe applicable to those DPs who collect quarterly/ monthly AMC.5. The Depositories are advised to:-a) make amendments to the relevant bye-laws, rules and regulations for the implementation ofthe above decision immediately, as may be applicable/necessary ;b) bring the provisions of this circular to the notice of their DPs and also to disseminate the sameon their website; andc) Communicate the same to all the BOs.6. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities andExchange Board of India Act, 1992 and section 19 of the Depositories Act, 1996 to protect theinterest of investors in securities and to promote the development of, and to regulate, the securitiesmarket.[ 314 ]
Yours faithfully,Harini BalajiDeputy General Manager022-26449372harinib@sebi.gov.inService tax on fees/charges payable by ParticipantsCircular No.Sub: Service tax on fees/charges payable by Participants<strong>NSDL</strong>/POLICY/ All Participants are hereby informed that with effect from April 1, 2010,2010/0028 service tax will be levied at applicable rates on fees/charges payable byDate: March 23, 2010 Participants.Participants are requested to take note of the same.Format for filing charge structure with <strong>NSDL</strong>Circular No. Sub : Format for filing charge structure with <strong>NSDL</strong> every year by April 30<strong>NSDL</strong>/POLICY/Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/2007/0003 PI/2006/0064 dated December 26, 2006 (copy enclosed) regarding filing ofDate: January 8, 2007 charge structure with <strong>NSDL</strong> and penalty therefor in case of non-compliance.The details of charge structure should be provided as per the enclosed format(in MS Excel) and e-mailed to <strong>NSDL</strong> at dpfees@nsdl.co.inFurther, any subsequent changes (addition/deletion/modification) in thecharge structure of the DP should also be intimated to <strong>NSDL</strong> in the aboveformat, at the above e-mail Id before such changes become effective.DP Statutory Advance/ Account Demat Remat Transaction Pledge Pledge Pledge Pledge Pledge Failed Other RemarksName charges Deposit Maintenance (Debit) Creation Creation Closure Closure Invo- instru- charges,at the confir- confir- cation ction if anytime of mation mationaccountopeningCharges - waiver request to be submitted within one monthCircular No.Sub: Facility for submitting fee waiver requests electronically through<strong>NSDL</strong>/POLICY/SQLASSIST2009/0098 All Participants are hereby informed that a new facility is made available toDate: October 23, 2009 request for fee waivers electronically through SQLASSIST intranet site (https://sqlassist). Participants are requested to take note of the following:1. The waiver requests can be applied using interactive screens or throughfile upload. Participants would be required to follow maker-checkerconcept for setting up waiver requests on SQLASSIST Intranet site.Detailed procedure for applying for waiver requests through SQLASSISTis given at Annexure 1.2. Participants are not required to send any documents in paper form to<strong>NSDL</strong> except in case of waiver requests for account closure upon interdepositorytransfers where the number of instructions per client aremore than 25. In such cases, Participants are advised to follow theexisting procedure with respect to collection and submission ofdocuments to <strong>NSDL</strong> as mentioned in Circular no. <strong>NSDL</strong>/POLICY/2006/0001 dated January 5, 2006 and <strong>NSDL</strong>/POLICY/2006/0003 dated January30, 2006.3. For all other types of waiver requests i.e. (i) account closure and intradepositorytransfers (irrespective of number of instructions per client),(ii) account closure and inter-depository transfers (limited to upto 25[ 315 ]
instructions per client account) and (iii) transmission requests,Participants are not required to send any document in paper form to<strong>NSDL</strong>. However, Participants are required to maintain such documentsand produce it to officials of <strong>NSDL</strong> on demand.4. Waiver requests for transactions effected in the preceding month canbe applied through SQLASSIST till the end of the current month. Forexample, waiver for a transaction effected in November 2009 can beapplied by the Participant through SQLASSIST anytime betweenNovember 1, 2009 till December 31, 2009. Participants can also submitwaiver request for transactions effected in the current month.5. This revised procedure will be applicable for all waiver requests appliedon or after November 1, 2009 (i.e. waivers requests for the month ofOctober 2009 onwards can be applied using this system).6. The existing requirement to conduct 100% internal audit in respect ofamount claimed by the Participant for waiver will continue in respectof waiver requests for transfer upon account closure (Ref. : CircularNo. <strong>NSDL</strong>/POLICY/2007/0060 dated October 5, 2007). Such an internalaudit must be carried out for all types of waiver requests made throughSQLASSIST.7. It is reiterated that in case any deviation is observed with respect toclaims for waiver, a penalty of Rs. 500 per instruction for which waiveris granted may be levied on the concerned Participant.For further information / clarification, Participants are requested tocontact Mr. Dilip Singhal at Tel No. (022) 2499 4363 / email ID:dilips@nsdl.co.in / Ms. Shobha Shetty at Tel No. (022) 2499 4214 / email ID:shobhas@nsdl.co.in.Circular No.Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/99/496 dated<strong>NSDL</strong>/PI/2003/2103 June 29, 1999 advising Participants to submit requests for waiver of fees toDate: December 29, <strong>NSDL</strong>, alongwith all the requisite documents, within one month from the2003 date of bill. Participants are hereby informed that w.e.f January 1, 2004,they will be required to provide only the following documents alongwith aletter in the format as per Annexure:(1) Copy of death certificate of the deceased;(2) Indemnity/Affidavit by the nominee/legal heir, as the case may, in caseof single holder account.Participants should also note that w.e.f January 1, 2004, only one requestper month per DPM set-up in respect of waiver of fees will be entertained by<strong>NSDL</strong>. The requirement of submitting the claim within one month from thedate of bill will continue.Annexure IProcedure for submitting waiver request(To be provided on DP's letter head)Date:To,The Vice PresidentParticipant Interface Dept.National Securities Depository LimitedTrade World, A-wing, 4th floorKamala Mills Compound, Senapati Bapat MargLower Parel (W), Mumbai - 400 013.[ 316 ]
Dear Sir,Sub.: Request for waiver of settlement fees for the month of ,(year) on account of transmission of securities.This is to certify that all requisite details/documents as required under theBye Laws and Business Rules of <strong>NSDL</strong> have been obtained by(DP name) for effecting transmission of securities in respect of client account(s)as enclosed. We hereby declare that all the information provided herewith istrue to the best of our knowledge and further confirm that(DP name) will be fully responsible in case any claims made towards waiverof settlement fees are found to be invalid.Name and Designation of Compliance OfficerSignature of Compliance OfficerDP IdSeal of DPAnnexure IIEnclosure to letterCircular No.<strong>NSDL</strong>/PI/99/496Date: June 29, 1999SEBI Directive on reduction in ChargesDetails of transmission cases for the month of , (year)Sr. Source Source Name of Joint DPM Exe- Target Target Reason, AmountNo. DP Id Client the A/c Instruction cution DP Id Client if (in Rs.)Id Deceased (Y/N) No. Date Id source forA/c whichis not waiverclosed issoughtNotes:(1) Please provide the details in a soft copy, if total number oftransactions exceed 25.(2) Enclose copies of death certificates.(3) Enclose copies of Indemnity/Affidavit, in case of single holdings.(4) Enclose a print-out of client master report of target Client in caseof inter-depository transfers.All Participants are hereby advised that all requests for waiver of fees shouldbe submitted to <strong>NSDL</strong> alongwith all the supporting documents within onemonth from the date of the bill. No request for waiver will be entertainedthereafterCircular No. With reference to Circular no. <strong>NSDL</strong>/POLICY/2010/0029 dated March 26, 2010,<strong>NSDL</strong>/POLICY/all Participants are hereby informed that Securities and Exchange Board of2010/0043 India has vide its letter no. MRD/DP/SG-OW/2569/2010 dated April 26, 2010Date: April 29, 2010 (copy enclosed) advised <strong>NSDL</strong> to intimate the Participants to pass on the benefitsof the reduction in Settlement fees, to the beneficial owners.Participants are advised to ensure compliance of the above.[ 317 ]
Securities and Exchange Board of IndiaMARKET REGULATION DEPARTMENT - Division of PolicyE-mail: surabhig@sebi.gov.in Ph. no.:91+22+26449315MRD/DP/SG-OW/ 2569 /2010April 26, 2010The Managing Director & CEO,National Securities Depository Ltd.Trade World, A wing, 4 th and 5 th Floor,Kamala Mills Compound, Lower Parel,Mumbai400 013Dear Sir,Sub: Reduction in settlement fees1. Piease refer to your letter No. Secretarial/SEBI/2010/MO/044 dated March 19,2010.2. It is observed from your aforesaid letter that with effect from April 1, 2010, you have reducedsettlement fees charged to the Depository Participants (DPs) from Rs.5 to Rs. 4.50 per debitinstruction. You may please advise your DPs to pass the benefit of the reduction in settlementfees, to the beneficial owners.3. Please acknowledge receipt and confirm compliance.Yours faithfully,Surabhi GuptaAssistant General ManagerCircular No.Sub : SEBI directive on reduction in charges<strong>NSDL</strong>/POLICY/With reference to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0075 dated December2007/0079 3, 2007, all Depository Participants (DPs) are hereby informed that SecuritiesDate: December 27, and Exchange Board of India has vide its letter no. MRD/DoP/PP/111495/072007 dated December 20, 2007 (copy enclosed) advised <strong>NSDL</strong> to intimate the DPsto pass on the benefits of the reduction in settlement fees, to the beneficialowners.DPs are advised to ensure compliance of the above.[ 318 ]
AnnexureCHIEF GENERAL MANAGERMarket Regulation Department - Division of PolicyThe Chairman & Managing Director,National Securities Depository Limited4th Floor, Trade World,Kamla Mills Compound,Senapati Bapat Marg, Lower Parel,Mumbai - 400 013Dear Sir,Sub : Reduction in settlement feesMRD/DoP/PP/111495/07December 20, 20071. Please refer to your letter no. Secretarial/SEBI/2007/PS/0111 dated November 30, 2007.2. It is observed from your aforesaid letter that with effect from January 1, 2008, you have proposedto reduce settlement fees charged to the Depository Participants (DPs) from Rs. 6 to Rs. 5 perdebit instruction. You may please advise your DPs to pass the benefit of proposed reduction insettlement fees to the beneficial owners.3. Please acknowledge receipt and confirm compliance.Yours faithfully,S. V. MURALI DHAR RAOCircular No. With reference to our circular no. <strong>NSDL</strong>/PI/2005/1440 dated August 9, 2005,<strong>NSDL</strong>/PI/2005/1478 all Participants are hereby informed that Securities and Exchange Board ofDate: August 12, 2005 India has vide its letter no. MRD/DOP/<strong>NSDL</strong>/VM/46618/05 dated August 10,2005 (copy enclosed) advised <strong>NSDL</strong> to intimate the Participants to pass on thebenefits of the reduction in charges for debit instructions, to the beneficialowners.GENERAL MANAGERMARKET REGULATION DEPARTMENTTel. 2216 4465 Fax : 2216 4394E-mail : sundaresanvs@sebi.gov.inThe Managing DirectorNational Securities Depository Limited4th Floor, Trade World, Kamla Mills CompoundSenapati Bapat Marg, Lower ParelMumbai 400 013Participants are advised to ensure compliance of the above.AnnexureMRD/DOP/<strong>NSDL</strong>/VM/46618/05August 10, 2005[ 319 ]
Dear Sir,Sub : Reduction in charges.1. Please refer to your letter no. <strong>NSDL</strong>/JS/SEBI/2973/2005 dated August 1, 20052. It is observed from your aforesaid letter that you have proposed to reduce the charges to theDepository Participants (DPs) for debit instruction from Rs. 8/- to Rs. 6/- with effect from October01, 2005. You may please intimate your DPs to pass on the proposed reduction in the chargestowards debit instructions to the beneficial owners.3. Please acknowledge receipt and confirm compliance.Yours faithfully,V.S. SUNDARESANCircular No. With reference to our circular no. <strong>NSDL</strong>/PI/2003/1979 dated December 11,<strong>NSDL</strong>/PI/2003/2111 2003, all Participants are hereby informed that Securities and Exchange BoardDate: December 29, of India has vide its letter no. MRD/VSS/SU/24221/2003 dated December 22,2003 2003 (copy enclosed) advised <strong>NSDL</strong> to intimate the Participants to pass on thebenefits of the reduction in charges for debit instructions, to the beneficialowners.Participants are advised to ensure compliance of the above.Annexure(Letter from SEBI)DEPUTY GENERAL MANAGERMARKET RGULATION DEPARTMENTEmail : sundersanvs@sebi.gov.inShri C. B. BhaveManaging Director<strong>NSDL</strong>4th Floor, Trade World, Kamla Mills Compound,Senapati Bapat Marg, Lower Parel,Mumbai-400 013.Dear Sir,Sub : Reduction in charges.MRD/VSS/SU/24221/2003December, 22, 20031. Please refer to your letter no. <strong>NSDL</strong>/PI/SEBI/2003/PP/1398 dated December 09, 2003.2. It is observed from your aforesaid letter that you have proposed to reduce the fee charges fromRs. 10/- to Rs. 8/- per debit instruction, with effect from 1-1-2004. You may please intimate yourDepository Participants to pass on the proposed reduction in the charges for debit instruction, tothe beneficial owners.3. Please acknowledge receipt and confirm complianceYours faithfully,V.S. SUNDARESAN[ 320 ]
SEBI Directive on Review of Dematerialisation ChargesDEPUTY GENERAL MANAGERMarket Regulation DepartmentMRD/DoP/SE/Dep/Cir-4/2005Date:January 28,20051. The Executive Directors/Managing Directors/Administrators of all Stock Exchanges2. The Managing Director, <strong>NSDL</strong>3. The Executive Director, CDSLDear Sir/s,Sub: Review of Dematerialisation Charges1. Investors have been representing to SEBI seeking a reduction in the charges paid by them fordematerialisation of securities. The rationalization of charge structure for dematerialisation wasdiscussed at the Secondary Market Advisory Committee of SEBI (SMAC).2. After careful consideration of the recommendations of the SMAC, as a first step, it has beendecided to rationalize the existing charge structure as under:2.1 Effective from February 1, 2005 :-a) No investor shall be required to pay any charge towards opening of a BeneficiaryOwner (BO) Account except for statutory charges as may be applicable;b) No investor shall be required to pay any charge for credit of securities into his/her BOaccount; andc) No custody charge shall be levied on any investor who would be opening a BO accounton or after February 1, 2005.2.2 With effect from April 1, 2005 the custody charges shall not be levied on any investor.However, the Depositories may levy and collect the charges towards custody from the issuers,on a per folio (ISIN position) basis as at the end of the financial year, according to the tablegiven below:Issuers to pay @ Rs.5.00 (*) per folio (ISIN position) in the respective depositories, subject toa minimum as mentioned below:Nominal value ofAnnual Custodial Fee payable by aadmitted securities (Rs.) Issuer to each Depository (Rs.) (*)Upto 5 crore 4,000Above 5 crore and upto 10 crore 10,000Above 10 crore and upto 20 crore 20,000Above 20 crore 30,000* Plus service tax as applicableThe issuers would be required to pay custody charges to the Depository with whom theyhave established connectivity based on the total number of folios (ISIN positions) as on 31stMarch of the previous financial year or the minimum amount, as the case may be, by 30thApril of the each financial year failing which Depositories may charge penal interest subjectto a maximum of 12% p.a.[ 321 ]
3. All the Stock Exchanges are advised to:-a) implement the above with immediate effect by making necessary amendments to the byelawsand Listing Agreement, as applicable;b) to bring the provisions of this circular to the notice of the listed companies/Issuers and alsoto put up the same on the website for easy access to the investors ; andc) communicate to SEBI the status of the implementation of the provisions of this circular andthe action taken in this regard in Section II, item no. 13 of the Monthly Development Reportfor the month of February, 2005.4. The Depositories are advised to:-a) make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary ;b) bring the provisions of this circular to the notice of the DPs of the Depositories and theissuers whose securities have been admitted into the depositories and also to disseminatethe same on the website; andc) communicate to SEBI the status of the implementation of the provisions of this circular inthe Monthly Development Report for the month of February, 2005.5. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,V S SUNDARESANClosure of accounts with zero balancesCircular No.<strong>NSDL</strong>/PI/2002/0365Date: March 4, 2002<strong>NSDL</strong> has been receiving requests from some Participants regarding closure ofClient accounts with zero balances without obtaining the necessary instructionsfrom the Clients, in cases where the Clients have not paid their dues to theParticipant. In this context, Participants are requested to refer to clause 8 ofthe Agreement between the Participant and its Client (Annexure B of ByeLaws of <strong>NSDL</strong>), which is reproduced hereunder:"On the failure of the Client to pay the charges as laid out in clause (1) of thisagreement within a period of thirty days from the date of demand DepositoryParticipant shall terminate this agreement and close the account of the Clientby requiring it to specify whether the balances in its account be transferredto the account of the Client held with another Participant or be rematerialisedin the manner specified in the Bye laws and Business rules."Participants may note that, since such accounts have zero balances, the needfor asking Client to rematerialise or to specify another demat account doesnot arise. Participants may close such accounts after complying with theprocedure laid down in clause 8 of the Agreement between the Participantand its Client.[ 322 ]
SEBI directive on non levy of charges for transfer of securities consequent to account closureCircular No.Sub : Exemption from submitting documents for claiming waiver of<strong>NSDL</strong>/POLICY/settlement fees consequent to transfer of securities with respect to SEBI2007/0060 directive on account closureDate : October 5, As all Depository Participants (DPs) are aware, DPs are exempted from payment2007 of settlement fee (Rs.6 per debit from beneficiary account) consequent totransfer of securities with respect to SEBI directive on account closure (CircularNo. <strong>NSDL</strong>/POLICY/2006/0001 dated January 05, 2006 and <strong>NSDL</strong>/POLICY/2006/0003 dated January 30, 2006). For the purpose of claiming/granting theseexemptions, certain documents are required to be submitted by DPs to <strong>NSDL</strong>.DPs have represented to <strong>NSDL</strong> about the costs and efforts involved in processingand despatch of requisite documents to <strong>NSDL</strong>. Upon consideration of therepresentations and discussions with DPs, it is decided to revise the procedurefor claiming waiver of settlement fees consequent to transfer of securitieswith respect to SEBI directive on account closure. The revised procedure isapplicable with effect from October 1, 2007.(I) Exemption from submission of documents to <strong>NSDL</strong>Where the number of instructions does not exceed 25 per Client account,DPs are advised to follow the below given procedure for Intra and InterDepository Transfer:(a) Collect the requisite documents from the Client as required inBye Laws & Business Rules of <strong>NSDL</strong> and various circulars issued by<strong>NSDL</strong> in this regard, before effecting the transfer of securities(intra and inter depository transfers). However, the documentscollected from the Clients will not be forwarded to <strong>NSDL</strong>. Suchdocuments would be required to be maintained by the DP andproduced to the officials of <strong>NSDL</strong> at the time of inspection ordemanded otherwise.(b) Submit an undertaking (Annexure I) that the DP has verified allthe documents and transfer of securities to the target demataccount are in accordance with the Bye Laws & Business Rules of<strong>NSDL</strong> and relevant circulars/guidelines issued by <strong>NSDL</strong> with respectto waiver of settlement fees claimed by the DP.(c) 100% audit to be carried out by the internal auditor of the DPwith respect to the amount claimed by the DP and the requisitedocuments collected and maintained in support of the same. DPsare advised to inform their internal auditors to expand the scopeof the audit by adding the following areas and make suitablecomments in their audit report.“9. Audit in respect of waiver of settlement fees claimed consequent totransfer of securities with respect of SEBI directive on account closure”Whether the DP has collected the requisite documents as per the Bye Laws &Business Rules of <strong>NSDL</strong> and various circulars issued by <strong>NSDL</strong> in respect ofwaiver of settlement fees claimed by the DP as per <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2007/0060 dated October 5, 2007 ?”DPs are advised to ensure that the abovementioned point is covered by theinternal auditor and reported in the internal audit report with effect fromquarter ending December 2007 onwards to be submitted by March 31, 2008.[ 323 ]
(II)Penalty in case of non compliance / deviationIn case, it is observed that the DP has not complied with theabovementioned requirements/procedures or any deviation is observedwith respect to point no. I above, a penalty of Rs. 500 per instructionfor which waiver is granted, would be levied on the concerned DP.(III) Requirement of submission of documents to <strong>NSDL</strong>Where the number of instructions exceeds 25 per Client account, DPsare advised to follow the below given procedure for Inter and IntraDepository Transfer:(a) Inter Depository TransfersDPs are advised to follow the existing procedure with respect tocollection and submission of documents to <strong>NSDL</strong> as mentioned in<strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0001 dated January 05, 2006and <strong>NSDL</strong>/POLICY/2006/0003 dated January 30, 2006.(b) Intra Depository transferDPs are advised to follow the procedure mentioned in point I onpage 1.(c) Internal AuditDPs need not carry out 100% audit for instructions exceeding 25per Client account with respect to inter-depository transfer, sincethe existing procedure is continued.(IV) Format for submission of waiver detailsDPs are advised to submit the details of the waiver claimed for suchClient accounts in the format given in Annexure II.(V) Submission deadlineDPs would be required to submit the undertaking / documents alongwiththe waiver details for claiming waiver of settlement fees with respectto SEBI directive on account closure within one month from the date ofthe bill. In case if DPs fail to submit the requests to <strong>NSDL</strong> by theprescribed deadline i.e. within one month from the date of the bill,such waiver requests will not be granted. However, DPs would still berequired to comply with the SEBI directive of not levying the charges toClients.(VI) Implementation:The revised procedure would be implemented with effect from October1, 2007, for the transfer of securities effected from September 1, 2007.DPs are also advised to submit the pending waiver requests, if any, byNovember 30, 2007 for the transfers effected till August 31, 2007, byfollowing the revised procedure mentioned above.For further information, DPs are requested to contact Ms. Shobha Shettyon Tel No. (022) 2499 4485 (email : shobhas@nsdl.co.in) / Mr. KaushalShah on Tel. No. (022) 2499 4214 (email : kaushals@nsdl.co.in).Annexure I(To be provided on DP's letter head)Date:To,The Vice PresidentParticipant Interface Dept.[ 324 ]
National Securities Depository LimitedTrade World, A-wing, 4th floorKamala Mills CompoundSenapati Bapat MargLower Parel (W)Mumbai - 400 013.Dear Sir,Sub.: Request for waiver of settlement fees for the month of _______,____ (year) consequent to transfer of securities with respect to SEBIdirective on account closure.This is to certify that all requisite details/documents as required under theBye Laws and Business Rules of <strong>NSDL</strong> and various guidelines/circulars issuedby <strong>NSDL</strong> have been obtained by _______________ (DP name) DP ID ___________for effecting transfer of securities on account of SEBI directive on accountclosure.DetailsWaiver claimed on account of SEBI directive onaccount closure for the month of ______________,_________(year)AmountTotalThe detail of securities transferred is enclosed as per annexure II.We hereby declare that all the information provided herewith is true to thebest of our knowledge and further confirm that ______________ (DP name)will be fully responsible in case any claims made towards waiver of settlementfees are found to be invalid.Name and Designation of Compliance OfficerSignature of Compliance OfficerDP IdSeal of DPAnnexure IIDetails of transfer cases for the month of ___________, ______ (year)DP Name _____________________ DP ID____________________Sr. Source Client Details Instruction detailsNo. Source Name of PAN of Name of PAN of Name of PAN of DPM ExecutionClient First Holder First Second Second Third Third Instruction DateID Holder Holder Holder Holder Holder No.Target Client details Reason, if AmountTarget Target Name of PAN of Name of PAN of Name of PAN of source a/c for whichDP Id Client First Firster Second Second Third Third is not waiver isId Holder Holder Holder Holder Holder Holder closed sought (Rs.)Notes :In case the total number of instructions exceed 25 per Client account, please provide the waiver detailsin soft copy as well.[ 325 ]
Circular No.Sub : Addendum to circular no. <strong>NSDL</strong>/POLICY/2006/0001 dated January<strong>NSDL</strong>/POLICY/ 5, 20062006/0003 Attention of Participants is invited to our circular no. <strong>NSDL</strong>/POLICY/2006/Date: January 30, 2006 0001 dated January 5, 2006. It was mentioned that the Client Master Report(CMR) submitted by the Beneficiary Owners (BO) for inter-depository transfershould be duly certified (signed and stamped) by the other depository.<strong>NSDL</strong> has received a confirmation from the other depository that its Participantscan now generate CMR in crystal report format. In view of the foregoing, BOsshall submit CMR in crystal report format duly certified (signed and stamped)by the target Participant.Participant are requested to take note of the above.Circular No.As all Participants are aware, Securities and Exchange Board of India (SEBI)<strong>NSDL</strong>/POLICY/ has vide its circular no. MRD/DoP/Dep/CIR-22/05 dated November 9, 20052006/0001 (copy enclosed) decided that "with effect from January 09, 2006 (Monday),Date: January 5, 2006 no charges shall be levied by a depository on DP and consequently, by a DP ona Beneficiary Owner (BO) when a BO transfers all the securities lying in hisaccount to another branch of the same DP or to another DP of the samedepository or another depository, provided the BO Account/s at transfereeDP and at transferor DP are one and the same, i.e. identical in all respects.In case the BO Account at transferor DP is a joint account, the BO Account attransferee DP should also be a joint account in the same sequence ofownership".<strong>NSDL</strong> has preferred an appeal before the Securities Appellate Tribunal. Thematter is sub-judice. In the meantime, Participants are advised to follow theaforesaid SEBI circular.Further, Participants are advised to follow the following procedure in thisregard :1. The BO submits an account closure request as specified in Annexure Q,duly filled & signed by the account holder(s) alongwith duly certified(signed and stamped) Client Master Report (CMR) obtained from thetarget Participant with whom the BO has opened a new account ormaintains an account. In case of inter-depository transfers, apart fromwhat has been stated above, the BO should submit the CMR in a crystalformat duly certified (signed and stamped) by the target Participant orif CMR in crystal report format is not available, the target details shouldbe certified (signed and stamped) by the other depository. Further, theBO surrenders all unused delivery instruction slips (DIS) to theParticipant.2. Participant should verify the documents submitted by the BO and iffound in order, the Participant shall effect the transfer of securities.3. After transferring the securities, the serial number(s) pertaining tounused DIS should be permanently blocked in the back office system ofthe Participant and the account of the BO should be closed. In case theParticipant is unable to close the account due to pending demat / rematrequests, ISIN in suspended status, fractional position or due to openpledges etc., the Participant should freeze the account i.e 'suspendedfor debit and credit'.4. Participants should make a request to <strong>NSDL</strong> seeking credit for thetransaction fees pertaining to account closure cases, with supportingdocuments as detailed above.[ 326 ]
Closure of accounts - SEBI Directive on abolishing account closure chargesCircular No.All Participants are hereby informed that Securities and Exchange Board of<strong>NSDL</strong>/PI/2002/1895 India (SEBI) vide its circular no. D&CC/FITTC/CIR-12/2002 dated October 30,Date: November 1, 2002 has intimated to <strong>NSDL</strong> as under:2002 " In view of the representations received on not to charge Account closurecharges, the matter was discussed in the meeting of Working Group onDematerialisation held on 18th October, 2002. It has been decided that noAccount closure charges be imposed on the closure of any Beneficial Owneraccounts. However, the transaction charges as applicable may continue to becharged. These instructions will come into force with effect from 1st November,2002."Participants are advised to ensure compliance of the above instructions.Closure of accounts - Request received on plain paperCircular No.Participants have been seeking clarification from <strong>NSDL</strong> whether an account<strong>NSDL</strong>/PI/2002/2175 held by a beneficiary can be closed on the basis of a request received fromDate: December 18, the Client on a plain paper instead of receiving the application for Closing2002 an Account in Annexure Q as per the Business Rules of <strong>NSDL</strong>.In this regard, Participants are advised that requests received on a plainpaper for closing a beneficiary account can be treated as a valid applicationprovided Participants ensure the following:(1) The request letter must contain all details that are specified in theApplication for Closing an Account (Annexure Q).(2) The Client must submit duly signed delivery instruction form(s)(Annexure L) for transferring the securities, if any.(3) All the account holder(s) must sign the request.Monthly BillsCircular No.<strong>NSDL</strong>/PI/2004/0413Date : March 5, 2004<strong>NSDL</strong> has been providing details of monthly bills to Participants in a floppydisc/DAT/through e-mail. Participants are hereby informed that henceforth(i.e. from February 2004 onwards), details of bills will be made available atintranet http://sqlassist. Bill details for a given month will be available toParticipants latest by 7th of the following month. Participants will continueto receive hard copies of the bill.For obtaining bill details, Participants can log-on to intranet (http://sqlassist)with the User Id (DP Id) and Password that will be provided to the complianceofficers of Participants in a sealed envelope alongwith the bill of February2004. Compliance officers are requested to forward the same to the concernedofficial.The bill details at the intranet (http://sqlassist) will be available in zip formatand the details can be viewed or downloaded as per the requirement of theParticipant. Participants should note that bill details for a particular monthwill be available till the details of the following month are uploaded to theintranet.It may be mentioned that Participants using leased line connectivity with<strong>NSDL</strong> can view/download bill details throughout the day. However, thoseParticipants who are connected to <strong>NSDL</strong> using VSAT will not be able to view/down load bill details during 10.00 a.m. to 4.00 p.m. on week days. Also, incase the file size is more than 500 KB, then the Participants connected to<strong>NSDL</strong> using VSAT will not be able to avail of this facility and the details tothose Participants will be provided separately in floppy disc/DAT.[ 327 ]
Fees for Rematerialisation of SecuritiesCircular No.Sub: Fees for Rematerialisation of Securities<strong>NSDL</strong>/POLICY/As all Participants are aware, <strong>NSDL</strong> had revised the charges for2009/0053 rematerialisation of securities with effect from November 1, 2006. In thisDate: July 3, 2009 context, Participants are advised that at the time of accepting requests forrematerialisation of securities from clients (especially for large quantities),Participants must inform their charges for rematerialisation to their clients.❑ ❑ ❑[ 328 ]
NOTES[ 329 ]
NOTES[ 330 ]
10. Anti Money LaunderingCircular No.Sub: SEBI’s Circular on Anti Money Laundering and Combating Financing of<strong>NSDL</strong>/POLICY/Terrorism.2010/0066 As all Participants are aware that SEBI has issued a Master Circular No. ISD/Date: June 18, 2010 AML/CIR-1/2010 dated February 12, 2010 (Ref.: <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2010/0016 dated February 19, 2010) regarding Anti Money Laundering (AML)Standards/Combating Financing of Terrorism (CFT) / Obligations of SecuritiesMarket Intermediaries under Prevention of Money Laundering Act, 2002 andRules framed thereunder. Participants are hereby informed that SEBI has videCircular No. CIR/ISD/AML/2/2010 dated June 14, 2010 informed about theadditional requirements to be fulfilled or clarifications with regard to theexisting requirements.A copy of the SEBI Circular dated June 14, 2010 is enclosed for information andcompliance.Circular No.Sub: Financial Action Task Force (FATF) public statement dated February<strong>NSDL</strong>/POLICY/18, 2010 concerning countries that do not or insufficiently apply the2010/0031 FATF Recommendations.Date: March 26, 2010 All Participants are hereby informed that SEBI has vide its letter no. ISD/SR/DB/GK/AML/199030/2010 dated March 10, 2010 advised the following:“The Financial Action Task Force (FATF) has issued a fresh public statementdated February 18, 2010 concerning risks to the integrity of the internationalfinancial system emanating from Iran, Angola, Ecuador, Democratic People’sRepublic of Korea (DPRK), Ethiopia, Turkmenistan, Pakistan and Sao Tomeand Principe.In this regard the deficient jurisdictions have been divided into three categories• Jurisdictions subject to a FATF call on its members and other jurisdictionsto apply countermeasures to protect the international financial systemfrom the ongoing and substantial money laundering and terroristfinancing (ML/TF) risks emanating from the jurisdiction: Iran• Jurisdictions with strategic AML/CFT deficiencies that have notcommitted to an action plan developed with the FATF to address keydeficiencies as of February 2010. The FATF calls on its members toconsider the risks emanating from deficiencies associated with eachjurisdiction: Angola, DPRK, Ecuador and Ethiopia.• Jurisdictions previously publicly identified by the FATF as having strategicAML/CFT deficiencies which remain to be addressed as of February2010: Pakistan, Turkmenistan and Sao Tome and Príncipe.”A copy of the FATF statement is enclosed herewith for information andappropriate action and is also available at url: http://www.fatf-gafi.org/dataoecd/34/29/44636171.pdf.Participants are advised to take note of the above and ensure compliancewith the same.AnnexureFATF PUBLIC STATEMENT18 February 2010The Financial Action Task Force (FATF) is the global standard setting body foranti-money laundering and combating the financing of terrorism (AML/CFT).In order to protect the international financial system from ML/FT risks and toencourage greater compliance with the AML/CFT standards, the FATF identifiedjurisdictions that have strategic deficiencies and, along with the FATF-styleregional bodies (FSRBs), works with them to address those deficiencies that[ 331 ]
pose a risk to the international financial system. The FATF and the relevantFSRBs will continue to work with the jurisdictions below and report on theirprogress in addressing the identified deficiencies.1. Jurisdictions subject to a FATF call on its members and otherjurisdictions to apply countermeasures to protect the internationalfinancial system from the ongoing and substantial money launderingand terrorist financing (ML/TF) risks emanating from the jurisdiction 1 :Iran2. Jurisdictions with strategic AML/CFT deficiencies that have notcommitted to an action plan developed with the FATF to addresskey deficiencies as of February 2010. The FATF calls on its membersto consider the risks arising from the deficiencies associated witheach jurisdiction, as described below.Angola*Democratic People’s Republic of Korea (DPRK)*EcuadorEthiopia** Despite the FATF’s efforts, these jurisdictions have not constructively engagedwith the FATF or an FSRB as of February 2010 and have not committed to theinternational AML/CFT standards.3. Jurisdictions previously publicly identified by the FATF as havingstrategic AML/CFT deficiencies, which remain to be addressed as ofFebruary 2010 2 :PakistanTurkmenistanSão Tomé and Príncipe1. Jurisdictions subject to a FATF call on its members and otherjurisdictions to apply countermeasures to protect the internationalfinancial system from the ongoing and substantial money launderingand terrorist financing (ML/TF) risks emanating from thejurisdiction:IranThe FATF welcomes the recent steps that Iran has taken to engage with theFATF, but remains concerned by Iran’s failure to meaningfully address theongoing and substantial deficiencies in its anti-money laundering andcombating the financing of terrorism (AML/CFT) regime. The FATF remainsparticularly concerned about Iran’s failure to address the risk of terroristfinancing and the serious threat this poses to the integrity of the internationalfinancial system. The FATF urges Iran to immediately and meaningfully addressits AML/CFT deficiencies, in particular by criminalising terrorist financingand effectively implementing suspicious transaction reporting (STR)requirements.The FATF reaffirms its call on members and urges all jurisdictions to advisetheir financial institutions to give special attention to business relationshipsand transactions with Iran, including Iranian companies and financialinstitutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February2009 call on its members and urges all jurisdictions to apply effective countermeasuresto protect their financial sectors from money laundering and1The FATF has previously issued public statements calling for counter-measures on Iran. Those statements are updated below.2The FATF has previously issued public statements on these jurisdictions. These statements are updated below.[ 332 ]
financing of terrorism (ML/FT) risks emanating from Iran. FATF continues tourge jurisdictions to protect against correspondent relationships being usedto bypass or evade counter-measures and risk mitigation practices, and totake into account ML/FT risks when considering requests by Iranian financialinstitutions to open branches and subsidiaries in their jurisdiction. If Iranfails to take concrete steps to improve its AML/CFT regime, the FATF willconsider calling on its members and urging all jurisdictions to strengthencounter-measures in June 2010.2. Jurisdictions with strategic AML/CFT deficiencies that have notcommitted to an action plan developed with the FATF to addresskey deficiencies as of February 2010. The FATF calls on its membersto consider the risks arising from the deficiencies associated witheach jurisdiction, as described below.Angola*Angola has not committed to the AML/CFT international standards, nor has itresponded to the FATF’s request for engagement on these issues. Angola’slack of a comprehensive AML/CFT regime poses a risk to the internationalfinancial system. Angola should work with the FATF to develop a viable AML/CFT regime in line with international standards.Democratic People’s Republic of Korea (DPRK)*The Democratic People’s Republic of Korea (DPRK) has not committed to theAML/CFT international standards, nor has it responded to the FATF’s requestfor engagement on these issues. DPRK’s lack of a comprehensive AML/CFTregime poses a risk to the international financial system. DPRK should workwith the FATF to develop a viable AML/CFT regime in line with internationalstandards.EcuadorFATF has identified Ecuador as having strategic AML/CFT deficiencies. Ecuadorhas engaged with the FATF and GAFISUD but has not delivered a clear highlevelpolitical commitment to address these deficiencies. Ecuador shouldwork with the FATF and GAFISUD to address these deficiencies, including by:(1) adequately criminalising money laundering and terrorist financing(Recommendation 1 and Special Recommendation II); (2) establishing andimplementing adequate procedures to identify and freeze terrorist assets(Special Recommendation III); implementing adequate procedures for theconfiscation of funds related to money laundering (Recommendation 3); (3)Reinforcing and improving coordination of financial sector supervision(Recommendation 23).Ethiopia*Ethiopia has not committed to the AML/CFT international standards, nor hasit constructively engaged with the FATF. The FATF has identified Ethiopia ashaving strategic AML/CFT deficiencies that pose a risk to the internationalfinancial system. Ethiopia should work with the FATF to develop a viableAML/CFT regime in line with international standards.3. Jurisdictions previously publicly identified by the FATF as havingstrategic AML/CFT deficiencies, which remain to be addressed as ofFebruary 2010PakistanThe FATF welcomes Pakistan’s efforts to ensure that its Anti-Money LaunderingOrdinance (AMLO) remains in effect and to implement a permanent AML/CFTframework through legislation. However, FATF remains concerned regarding[ 333 ]
the ML/FT risks posed by Pakistan and reaffirms its public statement of 28February 2008 regarding these risks. In particular, the FATF expresses concernthat Pakistan’s Anti-Money Laundering Ordinance (AMLO) will expire on 26March 2010. The FATF strongly urges Pakistan to implement a permanentAML/CFT framework before the expiration of the AMLO and strongly encouragesPakistan to establish a comprehensive AML/CFT framework.TurkmenistanThe FATF welcomes Turkmenistan’s continued progress in addressing its AML/CFT deficiencies, including by taking steps towards establishing a FinancialIntelligence Unit (FIU). Given that the FIU is not yet operational, the FATFreiterates its 25 February 2009 statement informing financial institutions thatthese deficiencies constitute an ML/FT vulnerability in the internationalfinancial system and that they should take appropriate measures to addressthis risk. Turkmenistan is urged to continue to take steps to implement anAML/CFT regime that meets international AML/CFT standards and to workclosely with the Eurasian Group and the International Monetary Fund to achievethis.São Tomé and PríncipeThe FATF remains concerned by São Tomé and Príncipe’s failure to meaningfullyaddress the deficiencies in its AML/CFT regime, particularly relating to terroristfinancing, and its recent lack of engagement with the Inter-GovernmentalAction Group against Money Laundering in West Africa (GIABA). The FATFurges São Tomé and Príncipe to work with GIABA to address the remainingAML/CFT deficiencies. Failing concrete progress, the FATF will consider takingaction in June 2010 to protect the financial system from ML/TF risks emanatingfrom São Tomé and Príncipe.Circular No.SEBI's Master Circular on Anti Money Laundering and Combating Financing<strong>NSDL</strong>/POLICY/of Terrorism.2010/0016 Attention of Participants is drawn to SEBI's Master Circular No. ISD/AML/CIR-Date: February 19, 2010 1/2010 dated February 12, 2010 regarding Anti Money Laundering (AML)Standards/Combating Financing of Terrorism (CFT) / Obligations of SecuritiesMarket Intermediaries under Prevention of Money Laundering Act, 2002 andRules framed thereunder.The Master Circular consolidates all the requirements / instructions issued bySEBI with regard to AML/CFT till January 31, 2010 and supersedes the followingcirculars issued by SEBI earlier:1. ISD/AML/CIR-1/2009 dated September 1, 2009 (refer <strong>NSDL</strong> Circular No.:<strong>NSDL</strong>/POLICY/2009/0080 dated September 5, 2009)2. ISD/AML/Cir-1/2008 dated December 19, 2008 (refer <strong>NSDL</strong> Circular No.<strong>NSDL</strong>/POLICY/2008/0087 dated December 30, 2008)3. ISD/CIR/RR/AML/2/06 dated March 20, 2006 (refer <strong>NSDL</strong> Circular No.<strong>NSDL</strong>/POLICY/2006/0013 dated May 2, 2006)4. ISD/CIR/RR/AML/1/06 dated January 18, 2006 (refer <strong>NSDL</strong> Circular No.<strong>NSDL</strong>/POLICY/2006/0002 dated January 23, 2006)A copy of the SEBI Circular dated February 12, 2010 is enclosed for informationand compliance.[ 334 ]
OFFICER ON SPECIAL DUTYINTEGRATED SURVEILLANCE DEPARTMENTEMAIL - ramanns@sebi.gov.inTEL : 022 26449450Fax : 022 26449029ISD/AML/CIR-1/2010 February 12, 2010To all Intermediaries registered with SEBI under Section 12 of the SEBIAct.(Through the stock exchanges for stock brokers, sub brokers,depositories for depository participants, AMFI for Asset ManagementCompanies.)Sub: Anti Money Laundering (AML) Standards/Combating Financing ofTerrorism (CFT)/Obligations of Securities Market Intermediaries under thePrevention of Money Laundering Act, 2002 and Rules framed there-under-Master Circular on AML/CFTDear Sir / Madam,1. The Prevention of Money Laundering Act, 2002 (PMLA) was brought intoforce with effect from 1 st July 2005. Necessary Notifications / Rules underthe said Act were published in the Gazette of India on July 01, 2005. As per the provisions of the PMLA , every banking company, financialinstitution (includes chit fund company, a co-operative bank, ahousing finance institution and a non-banking financial company)and intermediary (includes a stock-broker, sub-broker, share transferagent, banker to an issue, trustee to a trust deed, registrar to anissue, asset management company, depositary participant, merchantbanker, underwriter, portfolio manager, investment adviser and anyother intermediary associated with the securities market andregistered under Section 12 of the Securities and Exchange Board ofIndia Act, 1992 (SEBI Act) shall have to adhere to client accountopening procedures and maintain records of such transactions asprescribed by the PMLA and Rules notified there under2. SEBI has issued necessary directives vide circulars from time to time,covering issues related to Know Your Client (KYC) norms, Anti-MoneyLaundering (AML), Client Due Diligence (CDD) and Combating Financingof Terrorism (CFT). The directives lay down the minimum requirementsand it is emphasised that the intermediaries may, according to theirrequirements, specify additional disclosures to be made by clients toaddress concerns of money laundering and suspicious transactionsundertaken by clients. Reference to applicable statutes and reportingguidelines for intermediaries is available at the website of the FinancialIntelligence Unit – India (FIU-IND). Directives to all intermediaries underSection 12 of the SEBI Act are also issued in the context of compliancewith the standards set by the Financial Action Task Force (FATF) on AMLand CFT.3. List of key circulars/directives issued with regard to KYC, CDD, AMLand CFTFollowing is a list of key circulars on KYC/CDD/AML/CFT issued by SEBIfrom 1993:[ 335 ]
Circular No. Date of circular Subject Broad area covered1 SEBI/MIRSD/CirNo.02/20102 SEBI / IMD / MCNo.1 /189241/20103 ISD/AML/CIR-2/20094 ISD/AML/CIR-1/20095 ISD/AML/CIR-1/20086 MIRSD/DPS-III/130466/20087 MRD/DoP/Cir-20/20088 F.No.47/2006/ISD/SR/1225399 MRD/DoP/Cir-20/200810 F.No.47-2006/ISD/SR/118153/2008January 18,2010January 01,2010October 23,2009September01, 2009December19, 2008July 2,2008June 30,2008April 4,2008April 3,2008February22, 2008MandatoryRequirement of inpersonverification ofclients.Master Circular forMutual FundsDirectives on CFTunder UnlawfulActivities(Prevention) Act,1967Additional AML/ CFTobligations ofIntermediaries underPMLA, 2002 and rulesframed thereunderMaster Circular onAML/CFT directivesIn-Person verificationof clientsby stock-brokersMandatoryRequirement of PANIn-person verificationof BO's whenopening demataccountsExemption fromMandatoryrequirement of PAN.In-Person verificationof clients bydepositoriesIn-person verification done foropening beneficial owner's accountby a DP will hold good for openingtrading account for a stock brokerand vice versa, if the DP and the stockbroker is the same entity or if one ofthem is the holding or subsidiarycompany of the other.Compliance with AML/CFTCDD directives of SEBI stipulated inMaster Circular dated December 19,2008Procedure to be followed for thefreezing of assets of individual orentities engaged in terrorismAdditional AML/CFT requirementsand clarifications thereonFramework for AML/CFT includingprocedures for CDD, clientidentification, record keeping &retention, monitoring and reportingof STRsResponsibility of stock-brokers toensure in-person verification by itsown staff.Exception for certain classes ofpersons from PAN being the soleidentification number for allparticipants trading in the securitiesmarket.In-person verification to becarried out by staff of depositoryparticipant.Exemption for investors residing inthe State of Sikkim from PAN beingthe sole identification number fortrading in the securities market.clarification on various topicsrelating to 'in-person' verificationof BOs at the time of opening demataccounts[ 336 ]
Circular No. Date of circular Subject Broad area covered11 MRD/DoP/Dep/Cir-12/2007September7, 2007KYC Norms forDepositoriesProof of Identity (POI) and Proof ofAddress (POA) for opening aBeneficiary Owner (BO) Account fornon-body corporates.12 MRD/DoP/Cir-05/2007April 27,2007PAN to be the soleidentification numberfor all transactions inthe securities marketMandatory requirement of PAN forparticipants transacting in thesecurities market.13 ISD/CIR/RR/AML/2/06March 20,2006PMLA- Obligations ofintermediaries interms of Rules notifiedthere underProcedure for maintaining andpreserving records, reportingrequirements and formats ofreporting cash transactions andsuspicious transactions14 ISD/CIR/RR/AML/1/06January 18,2006Directives on AMLStandardsFramework for AML and CFTincluding policies and procedures,Client Due Diligence requirements,record keeping, retention,monitoring and reporting15 SEBI/MIRSD/DPS-1/Cir-31/200416 MRD/DoP/Dep/Cir-29/2004August 26,2004August 24,2004Uniform DocumentaryRequirements fortradingProof of Identity(POI) and Proof ofAddress (POA) foropening a BeneficiaryOwner (BO)Account for nonbodycorporateUniform KYC documentaryrequirements for trading on differentsegments and exchangesBroadening the list of documentsthat may be accepted as Proof ofIdentity (POI) and/or Proof of Address(POA) for the purpose of opening aBO Account17 SEBI/MRD/SE/Cir-33/2003/27/08August 27,2003Mode of paymentand deliveryProhibition on acceptance/giving ofcash by brokers and on third partytransfer of securities18 SMDRP/Policy/Cir-36/2000August 4,2000KYC Norms forDepositoriesDocumentary requirements foropening a beneficiary account.19 SMD/POLICY/CIRCULARS/5-97April 11,1997Client RegistrationFormFormats of client Registration Formand broker clients agreements20 SMD-1/23341 Nov. 18,1993Regulation oftransaction betweenclients and membersMandatory requirement to obtaindetails of clients by brokers.4. This Master circular consolidates all the requirements/instructions issuedby SEBI with regard to AML/CFT till January 31 2010 and supersedes theearlier circulars, dated September 01, 2009, December 19, 2008, March20, 2006 and January 18, 2006 referenced at S.Nos. (4, 5,13 and 14)[ 337 ]
espectively of the abovementioned table. This Master Circular is dividedinto two parts; the first part is an overview on the background andessential principles that concern combating money laundering and terroristfinancing. The second part provides a detailed account of the proceduresand obligations to be followed by all registered intermediaries to ensurecompliance with AML/CFT directives This Circular is being issued to allthe intermediaries as specified at Para 2 above. The circular shall alsoapply to their branches and subsidiaries located abroad, especially, incountries which do not or insufficiently apply the FATF Recommendations,to the extent local laws and regulations permit. When local applicablelaws and regulations prohibit implementation of these requirements, thesame should be brought to the notice of SEBI. In case there is a variancein CDD/AML standards prescribed by SEBI and the regulators of the hostcountry, branches/overseas subsidiaries of intermediaries are requiredto adopt the more stringent requirements of the two.5. This Master circular is being issued in exercise of powers conferred underSection 11 (1) of the Securities and Exchange Board of India Act, 1992(SEBI Act), and Rule 7 and Rule 9 of Prevention of Money-laundering(Maintenance of Records of the Nature and Value of Transactions, theProcedure and Manner of Maintaining and Time for Furnishing Informationand Verification and Maintenance of Records of the Identity of the Clientsof the Banking Companies, Financial Institutions and Intermediaries) Rules,2005 (PML Rules) to protect the interests of investors in securities and topromote the development of, and to regulate the securities market.6. All the registered intermediaries are directed to ensure compliance withthe requirements contained in this Master Circular on an immediate basis.Stock exchanges, Depositories and AMFI are also directed to bring thecontents of this circular to the attention of their members/ depositoryparticipants and verify compliance during inspections.Yours faithfully,S. RamannSEBI Master Circular on Anti Money Laundering (AML andCombating Financing of Terrorism (CFT)- Obligations ofIntermediaries under the Prevention of Money Laundering Act,2002 and Rules Framed there-under(Consolidated upto January 31, 2010)PART - I OVERVIEW1 Introduction2 Background3 Policies and Procedures to Combat Money Laundering and Terroristfinancing3.1 Essential Principles3.2 Obligations to establish policies and procedures[ 338 ]
PART - II DETAILED OBLIGATIONS4 Written Anti Money Laundering Procedures5 Client Due Diligence5.1 Elements of Client Due Diligence5.2 Policy for acceptance of clients5.3 Risk Based Approach5.4 Clients of special category (CSC)5.5 Client identification procedure6 Record Keeping7 Information to be maintained8 Retention of Records9 Monitoring of transactions10 Suspicious Transaction Monitoring & Reporting11 List of Designated Individuals/Entities12 Procedure for freezing of funds, financial assets or economicresources or related services13 Reports to Financial Intelligence Unit- India14 Designation of an officer for reporting of suspicious transaction15 Employees’ Hiring/Training and Investor Education16 Annexure- List of various Reports and their formatsPART - I OVERVIEW1. Introduction1.1 The Directives as outlined below provide a general background andsummary of the main provisions of the applicable anti-moneylaundering and anti-terrorist financing legislations in India. Theyalso provide guidance on the practical implications of the Preventionof Money Laundering Act, 2002 (PMLA). The Directives also set outthe steps that a registered intermediary or its representatives shouldimplement to discourage and to identify any money laundering orterrorist financing activities. The relevance and usefulness of theseDirectives will be kept under review and it may be necessary toissue amendments from time to time.1.2 These Directives are intended for use primarily by intermediariesregistered under Section 12 of the Securities and Exchange Boardof India Act, 1992 (SEBI Act). While it is recognized that a “onesize-fits-all”approach may not be appropriate for the securitiesindustry in India, each registered intermediary should consider thespecific nature of its business, organizational structure, type ofclients and transactions, etc. when implementing the suggestedmeasures and procedures to ensure that they are effectivelyapplied. The overriding principle is that they should be able tosatisfy themselves that the measures taken by them are adequate,appropriate and abide by the spirit of such measures and therequirements as enshrined in the PMLA[ 339 ]
2. Back Ground:The PMLA came into effect from 1 st July 2005. Necessary Notifications /Rules under the said Act were published in the Gazette of India on 1 stJuly 2005 by the Department of Revenue, Ministry of Finance, Governmentof India. The PMLA has been further amended vide notification datedMarch 6, 2009 and inter alia provides that violating the prohibitions onmanipulative and deceptive devices, insider trading and substantialacquisition of securities or control as prescribed in Section 12 A readwith Section 24 of the Securities and Exchange Board of India Act, 1992(SEBI Act) will now be treated as a scheduled offence under schedule Bof the PMLA.As per the provisions of the PMLA, every banking company, financialinstitution (which includes chit fund company, a co-operative bank, ahousing finance institution and a non-banking financial company) andintermediary (which includes a stock-broker, sub-broker, share transferagent, banker to an issue, trustee to a trust deed, registrar to an issue,merchant banker, underwriter, portfolio manager, investment adviserand any other intermediary associated with securities market andregistered under Section 12 of the SEBI Act , shall have to maintain arecord of all the transactions; the nature and value of which has beenprescribed in the Rules under the PMLA. Such transactions include:• All cash transactions of the value of more than Rs 10 lakh or itsequivalent in foreign currency.• All series of cash transactions integrally connected to each otherwhich have been valued below Rs 10 lakh or its equivalent in foreigncurrency where such series of transactions take place within onecalendar month.• All suspicious transactions whether or not made in cash andincluding, inter-alia, credits or debits into from any non monetaryaccount such as demat account, security account maintained bythe registered intermediary.It may, however, be clarified that for the purpose of suspicioustransactions reporting, apart from ‘transactions integrally connected’,‘transactions remotely connected or related’ should also be considered.In case there is a variance in CDD/AML standards prescribed by SEBI andthe regulators of the host country, branches/overseas subsidiaries ofintermediaries are required to adopt the more stringent requirementsof the two.3. Policies and Procedures to Combat Money Laundering and Terroristfinancing3.1 Essential Principles3.1.1 These Directives have taken into account the requirementsof the PMLA as applicable to the intermediaries registeredunder Section 12 of the SEBI Act. The detailed Directivesin Part II have outlined relevant measures and proceduresto guide the registered intermediaries in preventing moneylaundering and terrorist financing. Some of these suggestedmeasures and procedures may not be applicable in everycircumstance. Each intermediary should consider carefullythe specific nature of its business, organizational structure,type of client and transaction, etc. to satisfy itself that[ 340 ]
the measures taken by it are adequate and appropriateand follow the spirit of the suggested measures in Part IIand the requirements as laid down in the PMLA.3.2 Obligation to establish policies and procedures3.2.1 Global measures taken to combat drug trafficking,terrorism and other organized and serious crimes have allemphasized the need for financial institutions, includingsecurities market intermediaries, to establish internalprocedures that effectively serve to prevent and impedemoney laundering and terrorist financing. The PMLA is inline with these measures and mandates that allintermediaries ensure the fulfillment of theaforementioned obligations.3.2.2 To be in compliance with the these obligations, seniormanagement of a registered intermediary should be fullycommitted to establishing appropriate policies andprocedures for the prevention of money laundering andterrorist financing and ensuring their effectiveness andcompliance with all relevant legal and regulatoryrequirements. The Registered Intermediaries should:(a) issue a statement of policies and procedures, on agroup basis where applicable, for dealing with moneylaundering and terrorist financing reflecting thecurrentstatutory and regulatory requirements;(b) ensure that the content of these Directives areunderstood by all staff members;(c) regularly review the policies and procedures on theprevention of money laundering and terroristfinancing to ensure their effectiveness. Further, inorder to ensure the effectiveness of policies andprocedures, the person doing such a review shouldbe different from the one who has framed suchpolicies and procedures;(d) adopt client acceptance policies and procedureswhich are sensitive to the risk of money launderingand terrorist financing;(e) undertake client due diligence (“CDD”) measures toan extent that is sensitive to the risk of moneylaundering and terrorist financing depending on thetype of client, business relationship or transaction;(f) have a system in place for identifying, monitoringand reporting suspected money laundering or terroristfinancing transactions to the law enforcementauthorities; and(g) develop staff members’ awareness and vigilance toguard against money laundering and terroristfinancing.3.2.3 Policies and procedures to combat Money Launderingshould cover:a. Communication of group policies relating to[ 341 ]
prevention of money laundering and terroristfinancing to all management and relevant staff thathandle account information, securities transactions,money and client records etc. whether in branches,departments or subsidiaries;b. Client acceptance policy and client due diligencemeasures, including requirements for properidentification;c. Maintenance of records;d. Compliance with relevant statutory and regulatoryrequirements;e. Co-operation with the relevant law enforcementauthorities, including the timely disclosure ofinformation; andf. Role of internal audit or compliance function toensure compliance with the policies, procedures, andcontrols relating to the prevention of moneylaundering and terrorist financing, including thetesting of the system for detecting suspected moneylaundering transactions, evaluating and checking theadequacy of exception reports generated on largeand/or irregular transactions, the quality of reportingof suspicious transactions and the level of awarenessof front line staff, of their responsibilities in thisregard.PART - II DETAILED DIRECTIVES4. Written Anti Money Laundering Procedures4.1 Each registered intermediary should adopt written procedures toimplement the anti money laundering provisions as envisaged underthe PMLA. Such procedures should include inter alia, the followingthree specific parameters which are related to the overall ‘ClientDue Diligence Process’:a. Policy for acceptance of clientsb. Procedure for identifying the clientsc. Transaction monitoring and reporting especially SuspiciousTransactions Reporting (STR)5. Client Due Diligence5.1 The CDD measures comprise the following:(a) Obtaining sufficient information in order to identify personswho beneficially own or control the securities account.Whenever it is apparent that the securities acquired ormaintained through an account are beneficially owned by aparty other than the client, that party should be identifiedusing client identification and verification procedures. Thebeneficial owner is the natural person or persons who ultimatelyown, control or influence a client and/or persons on whosebehalf a transaction is being conducted. It also incorporatesthose persons who exercise ultimate effective control over alegal person or arrangement.[ 342 ]
(b) Verify the client’s identity using reliable, independent sourcedocuments, data or information;(c) Identify beneficial ownership and control, i.e. determine whichindividual(s) ultimately own(s) or control(s) the client and/orthe person on whose behalf a transaction is being conducted;(d) Verify the identity of the beneficial owner of the client and/orthe person on whose behalf a transaction is being conducted,corroborating the information provided in relation to (c); and(e) Conduct ongoing due diligence and scrutiny, i.e. performongoing scrutiny of the transactions and account throughoutthe course of the business relationship to ensure that thetransactions being conducted are consistent with the registeredintermediary’s knowledge of the client, its business and riskprofile, taking into account, where necessary, the client’ssource of funds.5.2 Policy for acceptance of clients:5.2.1 All registered intermediaries should develop clientacceptance policies and procedures that aim to identifythe types of clients that are likely to pose a higher thanthe average risk of money laundering or terrorist financing.By establishing such policies and procedures, they will bein a better position to apply client due diligence on a risksensitive basis depending on the type of client businessrelationship or transaction. In a nutshell, the followingsafeguards are to be followed while accepting the clients:a) No account is opened in a fictitious / benami nameor on an anonymous basis.b) Factors of risk perception (in terms of monitoringsuspicious transactions) of the client are clearlydefined having regard to clients’ location (registeredoffice address, correspondence addresses and otheraddresses if applicable), nature of business activity,trading turnover etc. and manner of making paymentfor transactions undertaken. The parameters shouldenable classification of clients into low, medium andhigh risk. Clients of special category (as given below)may, if necessary, be classified even higher. Suchclients require higher degree of due diligence andregular update of Know Your Client (KYC) profile.c) Documentation requirement and other informationto be collected in respect of different classes ofclients depending on perceived risk and having regardto the requirements of Rule 9 of the PML Rules,Directives and Circulars issued by SEBI from time totime.d) Ensure that an account is not opened where theintermediary is unable to apply appropriate CDDmeasures / KYC policies. This may be applicable incases where it is not possible to ascertain the identityof the client, or the information provided to theintermediary is suspected to be non genuine, or thereis perceived non co-operation of the client in[ 343 ]
providing full and complete information. The marketintermediary should not continue to do business withsuch a person and file a suspicious activity report. Itshould also evaluate whether there is suspicioustrading in determining whether to freeze or closethe account. The market intermediary should becautious to ensure that it does not return securitiesof money that may be from suspicious trades.However, the market intermediary should consult therelevant authorities in determining what action itshould take when it suspects suspicious trading.e) The circumstances under which the client is permittedto act on behalf of another person / entity should beclearly laid down. It should be specified in whatmanner the account should be operated, transactionlimits for the operation, additional authority requiredfor transactions exceeding a specified quantity / valueand other appropriate details. Further the rights andresponsibilitiesa) of both the persons i.e. the agent- client registeredwith the intermediary, as well as the person on whosebehalf the agent is acting should be clearly laid down.Adequate verification of a person’s authority to acton behalf of the client should also be carried out.f) Necessary checks and balance to be put into placebefore opening an account so as to ensure that theidentity of the client does not match with any personhaving known criminal background or is not bannedin any other manner, whether in terms of criminal orcivil proceedings by any enforcement agencyworldwide.5.3 Risk-based Approach5.3.1 It is generally recognized that certain clients may be of ahigher or lower risk category depending on circumstancessuch as the client’s background, type of businessrelationship or transaction etc. As such, the registeredintermediaries should apply each of the client due diligencemeasures on a risk sensitive basis. The basic principleenshrined in this approach is that the registeredintermediaries should adopt an enhanced client duediligence process for higher risk categories of clients.Conversely, a simplified client due diligence process maybe adopted for lower risk categories of clients. In linewith the risk-based approach, the type and amount ofidentification information and documents that registeredintermediaries should obtain necessarily depend on therisk category of a particular client.5.4 Clients of special category (CSC):Such clients include the followingi.Non resident clientsii. High net-worth clients,[ 344 ]
iii. Trust, Charities, Non-Governmental Organizations (NGOs) andorganizations receiving donationsiv. Companies having close family shareholdings or beneficialownershipv. Politically Exposed Persons (PEP) Politically exposed personsare individuals who are or have been entrusted with prominentpublic functions in a foreign country, e.g., Heads of States orof Governments, senior politicians, senior government/judicial/military officers, senior executives of state-owned corporations,important political party officials, etc. The additional normsapplicable to PEP as contained in the subsequent para 5.5 ofthis circular shall also be applied to the accounts of the familymembers or close relatives of PEPs.vi. Companies offering foreign exchange offeringsvii. Clients in high risk countries where existence / effectivenessof money laundering controls is suspect, where there is unusualbanking secrecy, countries active in narcotics production,countries where corruption (as per Transparency InternationalCorruption Perception Index) is highly prevalent, countriesagainst which government sanctions are applied, countriesreputed to be any of the following – Havens / sponsors ofinternational terrorism, offshore financial centers, tax havens,countries where fraud is highly prevalent.viii. Non face to face clientsix. Clients with dubious reputation as per public informationavailable etc. The above mentioned list is only illustrative andthe intermediary should exercise independent judgment toascertain whether any other set of clients should be classifiedas CSC or not.5.5 Client identification procedure:5.5 The KYC policy should clearly spell out the client identificationprocedure to be carried out at different stages i.e. while establishingthe intermediary – client relationship, while carrying outtransactions for the client or when the intermediary has doubtsregarding the veracity or the adequacy of previously obtained clientidentification data.Intermediaries shall be in compliance with the followingrequirements while putting in place a Client Identification Procedure(CIP):a) All registered intermediaries should put in place necessaryprocedures to determine whether their existing/potential clientis a PEP. Such procedures would include seeking additionalinformation from clients, accessing publicly availableinformation etc.b) All registered intermediaries are required to obtain seniormanagement approval for establishing business relationshipswith PEPs. Where a client has been accepted and the client orbeneficial owner is subsequently found to be, or subsequentlybecomes a PEP, registered intermediaries shall obtain seniormanagement approval to continue the business relationship.[ 345 ]
c) Registered intermediaries shall take reasonable measures toverify source of funds of clients identified as PEP.d) The client should be identified by the intermediary by usingreliable sources including documents / information. Theintermediary should obtain adequate information tosatisfactorily establish the identity of each new client and thepurpose of the intended nature of the relationship.e) The information should be adequate enough to satisfycompetent authorities (regulatory / enforcement authorities)in future that due diligence was observed by the intermediaryin compliance with the directives. Each original documentshould be seen prior to acceptance of a copy.f) Failure by prospective client to provide satisfactory evidenceof identity should be noted and reported to the higher authoritywithin the intermediary.5.5.1 SEBI has prescribed the minimum requirements relatingto KYC for certain classes of registered intermediaries fromtime to time as detailed in the table. Taking into accountthe basic principles enshrined in the KYC norms which havealready been prescribed or which may be prescribed bySEBI from time to time, all registered intermediaries shouldframe their own internal directives based on theirexperience in dealing with their clients and legalrequirements as per the established practices. Further,the intermediary should conduct ongoing due diligencewhere it notices inconsistencies in the informationprovided. The underlying objective should be to followthe requirements enshrined in the PMLA, SEBI Act andRegulations, directives and circulars issued thereunder sothat the intermediary is aware of the clients on whosebehalf it is dealing.5.5.2 Every intermediary shall formulate and implement a CIPwhich shall incorporate the requirements of the PML RulesNotification No. 9/2005 dated July 01, 2005 (as amendedfrom time to time), which notifies rules for maintenanceof records of the nature and value of transactions, theprocedure and manner of maintaining and time forfurnishing of information and verification of records ofthe identity of the clients of the banking companies,financial institutions and intermediaries of securitiesmarket and such other additional requirements that itconsiders appropriate to enable it to determine the trueidentity of its clients. PML Rules have recently beenamended vide notification No. 13/2009 dated November12, 2009 and need to be adhered to by registeredintermediaries.5.5.3 It may be noted that irrespective of the amount ofinvestment made by clients, no minimum threshold orexemption is available to registered intermediaries(brokers, depository participants, AMCs etc.) fromobtaining the minimum information/documents fromclients as stipulated in the PML Rules/SEBI Circulars (as[ 346 ]
amended from time to time) regarding the verification ofthe records of the identity of clients. Further no exemptionfrom carrying out CDD exists in respect of any category ofclients. In other words, there shall be no minimuminvestment threshold/ category-wise exemption availablefor carrying out CDD measures by registeredintermediaries. This shall be strictly implemented by allintermediaries and non-compliance shall attractappropriate sanctions.6. Record Keeping6.1 Registered intermediaries should ensure compliance with the recordkeeping requirements contained in the SEBI Act, 1992, Rules andRegulations made there-under, PMLA as well as other relevantlegislation, Rules, Regulations, Exchange Bye-laws and Circulars.6.2 Registered Intermediaries should maintain such records as aresufficient to permit reconstruction of individual transactions(including the amounts and types of currencies involved, if any) soas to provide, if necessary, evidence for prosecution of criminalbehavior.6.3 Should there be any suspected drug related or other launderedmoney or terrorist property, the competent investigating authoritieswould need to trace through the audit trail for reconstructing afinancial profile of the suspect account. To enable thisreconstruction, registered intermediaries should retain the followinginformation for the accounts of their clients in order to maintain asatisfactory audit trail:(a) the beneficial owner of the account;(b) the volume of the funds flowing through the account; and(c) for selected transactions:• the origin of the funds;• the form in which the funds were offered or withdrawn,e.g. cheques, demand drafts etc.;• the identity of the person undertaking thetransaction;• the destination of the funds;• the form of instruction and authority.6.4 Registered Intermediaries should ensure that all client andtransaction records and information are available on a timelybasis to the competent investigating authorities. Whererequired by the investigating authority, they should retaincertain records, e.g. client identification, account files, andbusiness correspondence, for periods which may exceedthose required under the SEBI Act, Rules and Regulationsframed there-under PMLA, other relevant legislations, Rulesand Regulations or Exchange bye-laws or circulars.6.5 More specifically, all the intermediaries shall put in place asystem of maintaining proper record of transactionsprescribed under Rule 3 of PML Rules as mentioned below:(i) all cash transactions of the value of more than rupees ten lakhor its equivalent in foreign currency;[ 347 ]
(ii) all series of cash transactions integrally connected to eachother which have been valued below rupees ten lakh or itsequivalent in foreign currency where such series of transactionshave taken place within a month and the aggregate value ofsuch transactions exceeds rupees ten lakh;(iii) all cash transactions where forged or counterfeit currency notesor bank notes have been used as genuine and where any forgeryof a valuable security has taken place;(iv) all suspicious transactions whether or not made in cashand by way of as mentioned in the Rules.7. Information to be maintainedIntermediaries are required to maintain and preserve the followinginformation in respect of transactions referred to in Rule 3 of PML Rules:I. the nature of the transactions;II. the amount of the transaction and the currency in which it isdenominated;III. the date on which the transaction was conducted; andIV. the parties to the transaction.8. Retention of Records8.1 Intermediaries should take appropriate steps to evolve an internalmechanism for proper maintenance and preservation of such recordsand information in a manner that allows easy and quick retrieval ofdata as and when requested by the competent authorities. Further,the records mentioned in Rule 3 of PML Rules have to be maintainedand preserved for a period of ten years from the date of transactionsbetween the client and intermediary.8.2 As stated in sub-section 5.5, intermediaries are required toformulate and implement the CIP containing the requirements aslaid down in Rule 9 of the PML Rules and such other additionalrequirements that it considers appropriate. The records of theidentity of clients have to be maintained and preserved for a periodof ten years from the date of cessation of the transactions betweenthe client and intermediary.8.3 Thus the following document retention terms should beobserved:(a) All necessary records on transactions, both domestic andinternational, should be maintained at least for the minimumperiod prescribed under the relevant Act and Rules (PMLA andrules framed thereunder as well SEBI Act) and other legislations,Regulations or exchange bye-laws or circulars.(b) Records on client identification (e.g. copies or records of officialidentification documents like passports, identity cards, drivinglicenses or similar documents), account files and businesscorrespondence should also be kept for the same period.8.4 In situations where the records relate to on-going investigations ortransactions which have been the subject of a suspicious transactionreporting, they should be retained until it is confirmed that thecase has been closed.[ 348 ]
9. Monitoring of transactions9.1 Regular monitoring of transactions is vital for ensuring effectivenessof the AML procedures. This is possible only if the intermediary hasan understanding of the normal activity of the client so that it canidentify deviations in transactions / activities.9.2 The intermediary should pay special attention to all complex,unusually large transactions / patterns which appear to have noeconomic purpose. The intermediary may specify internal thresholdlimits for each class of client accounts and pay special attention totransactions which exceeds these limits. The background includingall documents/office records /memorandums/clarifications soughtpertaining to such transactions and purpose thereof shall also beexamined carefully and findings shall be recorded in writing. Furthersuch findings, records and related documents should be madeavailable to auditors and also to SEBI /stock exchanges/FIU-IND/other relevant Authorities, during audit, inspection or as and whenrequired. These records are required to be preserved for ten yearsas is required under PMLA.9.3 The intermediary should ensure a record of the transactions ispreserved and maintained in terms of Section 12 of the PMLA andthat transactions of a suspicious nature or any other transactionsnotified under Section 12 of the Act are reported to the Director,FIU-IND. Suspicious transactions should also be regularly reported tothe higher authorities within the intermediary.9.4 Further, the compliance cell of the intermediary should randomlyexamine a selection of transactions undertaken by clients tocomment on their nature i.e. whether they are in the nature ofsuspicious transactions or not.10. Suspicious Transaction Monitoring & Reporting10.1 Intermediaries should ensure that appropriate steps are taken toenable suspicious transactions to be recognised and haveappropriate procedures for reporting suspicious transactions. Whiledetermining suspicious transactions, intermediaries should be guidedby the definition of a suspicious transaction contained in PML Rulesas amended from time to time.10.2 A list of circumstances which may be in the nature of suspicioustransactions is given below. This list is only illustrative and whethera particular transaction is suspicious or not will depend upon thebackground, details of the transactions and other facts andcircumstances:a) Clients whose identity verification seems difficult or clientsthat appear not to cooperateb) Asset management services for clients where the source of thefunds is not clear or not in keeping with clients apparentstanding /business activity;c) Clients based in high risk jurisdictions;d) Substantial increases in business without apparent cause;e) Clients transferring large sums of money to or from overseaslocations with instructions for payment in cash;f) Attempted transfer of investment proceeds to apparentlyunrelated third parties;[ 349 ]
g) Unusual transactions by CSCs and businesses undertaken byoffshore banks/financial services, businesses reported to be inthe nature of export-import of small items.10.3 Any suspicious transaction should be immediately notified to theMoney Laundering Control Officer or any other designated officerwithin the intermediary. The notification may be done in the formof a detailed report with specific reference to the clients,transactions and the nature /reason of suspicion. However, it shouldbe ensured that there is continuity in dealing with the client asnormal until told otherwise and the client should not be told of thereport/suspicion. In exceptional circumstances, consent may notbe given to continue to operate the account, and transactions maybe suspended, in one or more jurisdictions concerned in thetransaction, or other action taken. The Principal Officer/MoneyLaundering Control Officer and other appropriate compliance, riskmanagement and related staff members shall have timely accessto client identification data and CDD information, transactionrecords and other relevant information10.4 It is likely that in some cases transactions are abandoned or abortedby clients on being asked to give some details or to providedocuments. It is clarified that intermediaries should report all suchattempted transactions in STRs, even if not completed by clients,irrespective of the amount of the transaction.10.5 Clause 5.4(vii) of this Master Circular categorizes clients of highrisk countries, including countries where existence and effectivenessof money laundering controls is suspect or which do not orinsufficiently apply FATF standards, as ‘CSC’. Intermediaries aredirected that such clients should also be subject to appropriatecounter measures. These measures may include a further enhancedscrutiny of transactions, enhanced relevant reporting mechanismsor systematic reporting of financial transactions, and applyingenhanced due diligence while expanding business relationships withthe identified country or persons in that country etc.11. List of Designated Individuals/EntitiesAn updated list of individuals and entities which are subject to varioussanction measures such as freezing of assets/accounts, denial of financialservices etc., as approved by the Security Council Committee establishedpursuant to various United Nations’ Security Council Resolutions(UNSCRs) can be accessed at its website at http://www.un.org/sc/committees/1267/consolist.shtml. Registered intermediaries aredirected to ensure that accounts are not opened in the name of anyonewhose name appears in said list. Registered intermediaries shallcontinuously scan all existing accounts to ensure that no account is heldby or linked to any of the entities or individuals included in the list. Fulldetails of accounts bearing resemblance with any of the individuals/entities in the list should immediately be intimated to SEBI and FIU-IND.12. Procedure for freezing of funds, financial assets or economicresources or related servicesSection 51A, of the Unlawful Activities (Prevention) Act, 1967 (UAPA),relating to the purpose of prevention of, and for coping with terroristactivities was brought into effect through UAPA Amendment Act, 2008.In this regard, the Central Government has issued an Order dated August[ 350 ]
27, 2009 detailing the procedure for the implementation of Section 51Aof the UAPA. Under the aforementioned Section, the Central Governmentis empowered to freeze, seize or attach funds and other financial assetsor economic resources held by, on behalf of, or at the direction of theindividuals or entities listed in the Schedule to the Order, or any otherperson engaged in or suspected to be engaged in terrorism. TheGovernment is also further empowered to prohibit any individual orentity from making any funds, financial assets or economic resources orrelated services available for the benefit of the individuals or entitieslisted in the Schedule to the Order or any other person engaged in orsuspected to be engaged in terrorism. The obligations to be followed byintermediaries to ensure the effective and expeditious implementationof said Order has been issued vide SEBI Circular ref. no: ISD/AML/CIR-2/2009 dated October 23, 2009, which needs to be complied withscrupulously.13. Reporting to Financial Intelligence Unit-India13.1 In terms of the PML Rules, intermediaries are required to reportinformation relating to cash and suspicious transactionsto the Director, Financial Intelligence Unit-India (FIU-IND) at thefollowing address: Director, FIU-IND, Financial Intelligence Unit-India, 6 th Floor, Hotel Samrat, Chanakyapuri, New Delhi-110021.Website: http://fiuindia.gov.in13.2 Intermediaries should carefully go through all the reportingrequirements and formats enclosed with this circular. Theserequirements and formats are divided into two parts- ManualFormats and Electronic Formats. Details of these formats are givenin the documents (Cash Transaction Report-version 1.0 andSuspicious Transactions Report version 1.0) which are also enclosedwith this circular. These documents contain detailed directives onthe compilation and manner/procedure of submission of themanual/electronic reports to FIU-IND. The related hardware andtechnical requirement for preparing reports in manual/electronicformat, the related data files and data structures thereof are alsodetailed in these documents. Intermediaries, which are not in aposition to immediately file electronic reports, may file manualreports with FIU-IND as per the formats prescribed. While detailedinstructions for filing all types of reports are given in the instructionspart of the related formats, intermediaries should adhere to thefollowing:(a) The Cash Transaction Report (CTR) (wherever applicable) foreach month should be submitted to FIU-IND by 15 th of thesucceeding month.(b) The Suspicious Transaction Report (STR) should be submittedwithin 7 days of arriving at a conclusion that any transaction,whether cash or non-cash, or a series of transactions integrallyconnected are of suspicious nature. The Principal Officer shouldrecord his reasons for treating any transaction or a series oftransactions as suspicious. It should be ensured that there isno undue delay in arriving at such a conclusion.(c) The Principal Officer will be responsible for timelysubmission of CTR and STR to FIU-IND;(d) Utmost confidentiality should be maintained in filing of CTR[ 351 ]
and STR to FIU-IND. The reports may be transmitted by speed/registered post/fax at the notified address.(e) No nil reporting needs to be made to FIU-IND in case thereare no cash/suspicious transactions to be reported.13.3 Intermediaries should not put any restrictions on operations in theaccounts where an STR has been made. Intermediaries and theirdirectors, officers and employees (permanent and temporary) shallbe prohibited from disclosing (“tipping off”) the fact that a STR orrelated information is being reported or provided to the FIU-IND.Thus, it should be ensured that there is no tipping off to the clientat any level. It is clarified that the registered intermediaries,irrespective of the amount of transaction and/or the threshold limitenvisaged for predicate offences specified in part B of Schedule ofPMLA, 2002, should file STR if they have reasonable grounds tobelieve that the transactions involve proceeds of crime.14. Designation of an officer for reporting of suspicious transactions14.1 To ensure that the registered intermediaries properly dischargetheir legal obligations to report suspicious transactions to theauthorities, the Principal Officer would act as a central referencepoint in facilitating onward reporting of suspicious transactions andfor playing an active role in the identification and assessment ofpotentially suspicious transactions and shall have access to and beable to report to senior management at the next reporting level orthe Board of Directors. Names, designation and addresses (includinge-mail addresses) of ‘Principal Officer’ including any changes thereinshall also be intimated to the Office of the Director-FIU. As a matterof principle, it is advisable that the ‘Principal Officer’ is of asufficiently senior position and is able to discharge the functionswith independence and authority.15. Employees’ Hiring/Employee’s Training/ Investor Education15.1 Hiring of EmployeesThe registered intermediaries should have adequate screeningprocedures in place to ensure high standards when hiring employees.They should identify the key positions within their own organizationstructures having regard to the risk of money laundering and terroristfinancing and the size of their business and ensure the employeestaking up such key positions are suitable and competent to performtheir duties.15.2 Employees’ TrainingIntermediaries must have an ongoing employee training programmeso that the members of the staff are adequately trained in AML andCFT procedures. Training requirements should have specific focusesfor frontline staff, back office staff, compliance staff, riskmanagement staff and staff dealing with new clients. It is crucialthat all those concerned fully understand the rationale behind thesedirectives, obligations and requirements, implement themconsistently and are sensitive to the risks of their systems beingmisused by unscrupulous elements.15.3 Investors EducationImplementation of AML/CFT measures requires intermediaries todemand certain information from investors which may be of personal[ 352 ]
nature or has hitherto never been called for. Such information caninclude documents evidencing source of funds/income tax returns/bank records etc. This can sometimes lead to raising of questionsby the client with regard to the motive and purpose of collectingsuch information. There is, therefore, a need for intermediaries tosensitize their clients about these requirements as the onesemanating from AML and CFT framework. Intermediaries shouldprepare specific literature/ pamphlets etc. so as to educate theclient of the objectives of the AML/CFT programme.16. Annexure:List of various reports and their formats1. Cash Transaction Report Version 1.0 (Guidance Note)2. Summary of cash transaction report for an intermediary3. Cash Transaction Report for an Intermediary4. Annexure A- Individual data sheet for an intermediary5. Annexure B- Legal person/Entity detail sheet for an intermediary6. Suspicious Transaction Report Version 1.0 (Guidance Note)7. Suspicious Transaction Report for an intermediary8. Annexure A- Individual Detail Sheet for an intermediary9. Annexure B- Legal Person/ Entity Detail Sheet for an intermediary10. Annexure C- Account Detail Sheet for an intermediaryCircular No.Sub: Amendment to PMLA Rules<strong>NSDL</strong>/POLICY/Attention of Participants is invited to SEBI's Master Circular No. ISD/AML/Cir-2010/0008 1/2008 dated December 19, 2008 and Circular No. ISD/AML/CIR-1/2009 datedDate: January 19, 2010 September 1, 2009 intimated vide <strong>NSDL</strong> Circular Nos. <strong>NSDL</strong>/POLICY/2008/0087 dated December 30, 2008 and <strong>NSDL</strong>/POLICY/2009/0080 dated September5, 2009 respectively, regarding Anti Money Laundering Standards/CombatingFinancing of Terrorism/Obligations of Securities Market Intermediaries underPrevention of Money Laundering Act, 2002 and Rules made thereunder.The Financial Intelligence Unit - India (FIU - IND) has issued notification No.13/2009 dated November 12, 2009 of the Ministry of Finance amending thePrevention of Money Laundering (Maintenance of Records of the Nature andValue of Transactions, the Procedure and Manner of Maintaining and Time forFurnishing Information and Verification and Maintenance of Records of theIdentity of the clients of the Banking Companies, Financial Institutions andIntermediaries) Amendment Rules, 2009. The copy of said notification isenclosed for the information of Participants and necessary compliance.AnnexureMINISTRY OF FINANCE(Department of Revenue)NOTIFICATIONNew Delhi, the 12th November, 2009G.S.R. 816(E).—In exercise of the powers conferred by clauses (a), (b) and (c)of sub-section (1) of Section 12 and Section 15 read with clauses (h), (i), (j)and (k) of sub-section (2) of Section 73 ofthe Prevention of Money-launderingAct, 2002 (i 5 of 2003), the Central Government, in consultation with theReserve Bank of India, hereby makes the following rules further to amend thePrevention of Money-laundering (Maintenance of Records ofthe Nature and Value[ 353 ]
of Transactions, the Procedure and Manner of Maintaining and Time for FurnishingInformation and Verification and Maintenance of Records ofthe Identity oftheClients ofthe Banking Companies Financial Institutions and Intermediaries) Rules,2005, namely:—1. (1) These rules may be called the Prevention of Money-laundering(Maintenance of Records of the Nature and Value of Transactions,the Procedure and Manner of Maintaining and Time for FurnishingInformation and Verification and Maintenance of Records oftheIdentity ofthe Clients ofthe Banking Companies. Financial Institutionsand Intermediaries) Amendment Rules, 2009.(2) They shall come into force on the date of their publication in theOfficial Gazette.2. In the Prevention of Money-laundering (Maintenance of Records oftheNature and Value of Transactions, the Procedure and Manner of Maintainingand Time for Furnishing Information and Verification and Maintenance ofRecords ofthe Identity ofthe Clients ofthe Banking Companies, FinancialInstitutions and Intermediaries) Rules, 2005 (hereinafter referred to asthe principal rules),—In rule 2, sub-rule (1),—(a) after clause (c), the following clause shall be inserted, namely :—‘(ca) “non profit organisation’*means any entity or organisation thatis registered as a trust or a society under the Societies RegistrationAct, 1860 (21 of 1860) or any similar State legislation or a companyregistered under section 25,of the Companies Act, 1956(1 of 1956);’;(b) after clause (f), the following clause shall be inserted, namely :—‘(fa) “Regulator” means a person or an authority or a Governmentwhich is vested with The power to license, authorise, register,regulate or supervise the activity of banking companies, financialinstitutions or intermediaries, as the case may be;’;(c) for clause (g), the following clause shall be substituted, namely :—‘(g) “Suspicious transaction” means a transaction referred to in clause(h), including an attempted transaction, whether or not made incash, which to a person acting in good faith—(a) gives rise to a reasonable ground of suspicion that it may involveproceeds of an offence specified in the Schedule to the Act,regardless ofthe value involved; or(b) appears to be made in circumstances of unusual or unjustifiedcomplexity; or(c) appears to have no economic rationale or bonafide purpose; or(d) gives rise to a reasonable ground of suspicion that it may involvefinancing ofthe activities relating to terrorism;’.3. In the principal rules, in rule 3, in sub-rule (1), after clause (B), thefollowing clause shall be inserted,namely:—“ (BA) all transactions involving receipts by non-profit organisations ofvalue more than rupees ten lakh, or its equivalent in foreign currency;”.4. In the principal rules, in rule 5, for the words “the Reserve Bank of Indiaor the Securities and Exchange Board of India, or the Insurance RegulatoryDevelopment Authority, as the case may be,”, where ever they occur, thewords, “its Regulator,”, shall be substituted.[ 354 ]
5. In the principal rules, for rule 6, the following rule shall be substituted,namely :—‘‘Retention of records of transactions—The records referred to in rule 3shall-be maintained for a period of ten years from the date of transactionsbetween the client and the banking company, financial institution orintermediary, as the case may be.”.6. In the principal rules, in rule 7, for the words “the Reserve Bank of Indiaor the Securities and Exchange Board of India, or the Insurance RegulatoryDevelopment Authority, as the case may be,” where ever they occur, thewords, “its Regulator,”, shall be substituted;7. In the principal rules, in rule 8,—(a) in sub-rule (1), for the word, brackets and letters, “clauses (A) and(B)”, the word, brackets and letters “clauses (A), (B) and (BA)”shall be substituted;(b) after sub-rule (3), the following proviso shall be inserted at theend, namely :—“Provided that a banking company, financial institution or intermediary,as the case may be, and its employees shall keep the fact of furnishinginformation in respect of transactions referred to in clause (D) of subrule(1) of rule 3 strictly confidential.”.8. In the principal rules, in rule 9,—(a) for sub-rules (1) and (2), the following sub-rules shall be substituted,namely :—“(1) Every banking company, financial institution and intermediary,as the case may be, shall, -(a) at the time of commencement of an account-based relationship,identify its clients, verify their identity and obtain informationon the purpose and intended nature of the business relationship,and(b) in all other cases, verify identity while carrying out:(i) transaction of an amount equal to or exceeding rupeesfifty thousand, whether conducted as a single transactionor several transactions that appear to be connected, or(ii) any international money transfer operations.(1 A) Every banking company, financial institution and intermediary,as the case may be, shall identify the beneficial owner and take allreasonable steps to verify his identity.(IB) Every banking company, financial institution and intermediary,as the case may be, shall exercise ongoing due diligence with respectto the business relationship with every client and closely examinethe transactions in order to ensure that they are consistent withtheir knowledge of the customer, his business and risk profile.(1C) No banking company, financial institution or intermediary, asthe case may be. shall keep any anonymous account or account infictitious names.(2) Where the, client is an individual, he shall for the purpose ofsub-rule (1), submit to the banking company, financialinstitution and intermediary, as the case may be, one certifiedcopy of an ‘officially valid document’ containing details of his[ 355 ]
identity and address, one recent photograph and such otherdocuments including in respect of the nature of business andfinancial status of the client as may be required by the bankingcompany or the financial institution or the intermediary, asthe case may be :Provided that photograph need not be submitted by a clientfalling under clause (b) of sub-rule (I).”:(b) after sub-rule (6), the following sub-rule shall be inserted,namely :—“(6 A) Where the client is a juridical person, the bankingcompany, financial institution and intermediary, as the casemay be, shall verify that any person purporting to act on behalfof such client is so authorised and verify the identity of thatperson.”;(c) for sub-rule (7), the following sub-rule shall be substituted,namely :—“(7) (i)The regulator shall issue guidelines incorporating therequirements of sub- rules (I) to (6A) above and may prescribeenhanced measures to verily the client’s identity taking intoconsideration type of client, business relationship or natureand value of transactions.(ii) Every banking company, financial institution andintermediary as the case may be, shall formulate and implementa Client Identification Programme to determine the true identityof its clients, incorporating requirements of sub-rules (1) to (6A)and guidelines issued under clause (i) above.9. In the principal rules, in rule 10. for the words “the Reserve Bank of India orthe Securities and Exchange Board of India, or the Insurance RegulatoryDevelopment Authority, as the case may be,”, wherever they occur, thewords, “its regulator:”, shall be substituted.[Notification No. 13/2009/F. No. 6/8/2009-ES]S. G P. VERGHESE, Under Secy.Note: The principal rules were published in Part II, Section 3, Sub-section (i)of the Gazette of India, Extraordinary videNo. G.S.R. 444(E), dated 1 stJuly, 2005 and subsequently amended vide No. G.S.R. 717(E), dated 13thDecember, 2005 and No. G.S.R. 389(E), dated 24th May. 2007.Circular No.Sub: Financial Action Task Force (FATF) public statement dated October,<strong>NSDL</strong>/POLICY/2009 regarding countries which do not or insufficiently apply the FATF2009/0113 Recommendations.Date: December 2, 2009 All Participants are hereby informed that SEBI has vide its letter no. ISD/SR/AK/GK/AML/184492/2009 dated November 23, 2009 advised the following:"The Financial Action Task Force (FATF) Plenary has issued a fresh publicstatement dated October 2009 reaffirming its call on members and otherjurisdictions for effective counter measures concerning the risks to theintegrity of the international financial system emanating from certainjurisdictions." Copy of the same is enclosed.Soft copy of the statement is also available at url: http://www.fatf-gafi.org/document/11/0,3343,en_32250379_3226836_43898507_1_1_1_1,00.html.Participants are advised to take note of the above and ensure compliancewith the same.[ 356 ]
Circular No.Sub: Combating Financing of Terrorism (CFT) under Unlawful Activities<strong>NSDL</strong>/POLICY/ (Prevention) Act, 1967.2009/0101 SEBI has issued a Circular no. ISD/AML/CIR-2/2009 dated October 23, 2009Date: October 29, 2009 regarding Combating Financing of Terrorism (CFT) under Unlawful Activities(Prevention) Act, 1967. A copy of the Circular is attached at Annexure 1.Participants are hereby advised to note the contents of the Circular fornecessary action and compliance.Circular No.Sub: Financial Action Task Force (FATF) public statement regarding<strong>NSDL</strong>/POLICY/countries which do not or insufficiently apply the FATF Recommendations.2009/0094 SEBI has forwarded a public statement issued by Financial Action Task ForceDate: October 15, 2009 (FATF) to protect the international financial system from the abuse of moneylaundering and terrorist financing emanating from certain jurisdictions andurging all jurisdictions to apply effective counter-measures. A copy of theFATF statement dated June 26, 2009 is attached at Annexure 1. The statementis also available at url: http://www.fatf-gafi.org/document/15/0,3343,en_32250379_32236836_43193871_1_1_1_1,00.html.FATF Statement26 June 209IRANParticipants are hereby advised to note the contents of the FATF statementfor information, necessary action and compliance.The FATF remains concerned by Iran’s failure to meaningfully address theongoing and substantial deficiencies in its anti-money laundering andcombating the financing of terrorism (AML/CFT) regime. The FATF remainsparticularly concerned about Iran’s failure to address the risk of terroristfinancing and the serious threat this poses to the integrity of the internationalfinancial system. The FATF urges Iran to immediately and meaningfully addressits AML/CFT deficiencies, in particular by criminalising terrorist financingand effectively implementing suspicious transaction reporting (STR)requirements.The FATF reaffirms its call on members and urges all jurisdictions to advisetheir financial institutions to give special attention to business relationshipsand transactions with Iran, including Iranian companies and financialinstitutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February2009 call on its members and urges all jurisdictions to apply effective countermeasuresto protect their financial sectors from money laundering andfinancing of terrorism (ML/FT) risks emanating from Iran. FATF continues tourge jurisdictions to protect against correspondent relationships being usedto bypass or evade counter-measures and risk mitigation practices, and totake into account ML/FT risks when considering requests by Iranian financialinstitutions to open branches and subsidiaries in their jurisdiction.The FATF remains prepared to engage directly in assisting Iran to address itsAML/CFT deficiencies, including through the FATF Secretariat.UZBEKISTANThe FATF welcomes the significant recent steps that Uzbekistan has taken torestore and strengthen its AML/CFT regime and takes note of the action planfor further steps that it has articulated. FATF urges Uzbekistan to continueits progress towards completing its legislative framework and implementing[ 357 ]
an AML/CFT regime that meets international standards. Given thatimplementing regulations are not yet enacted, the FATF reiterates itsstatement of 16 October 2008.TURKMENISTANThe FATF welcomes Turkmenistan’s recent progress in adopting AML/CFTlegislation. Given that deficiencies remain in Turkmenistan’s AML/CFT regime,FATF reiterates its 25 February 2009 statement informing financial institutionsthat these deficiencies constitute an ML/FT vulnerability in the internationalfinancial system and that they should take appropriate measures to addressthis risk. Turkmenistan is urged to continue to take steps to implement anAML/CFT regime that meets international AML/CFT standards. Turkmenistanis strongly encouraged to continue to work closely with the Eurasian Groupand the International Monetary Fund to achieve this.PAKISTANThe FATF welcomes Pakistan’s recent accession to the International Conventionfor the Suppression of the Financing of Terrorism. However, the FATF remainsconcerned about the ML/FT risks posed by Pakistan and reaffirms its publicstatement of 28 February 2008 regarding these risks. The FATF welcomes theprocess underway in Pakistan to improve its AML/CFT regime. The FATFencourages Pakistan to continue to fully co-operate with the World Bank andthe Asia Pacific Group on Money Laundering (APG) on its mutual evaluationprocess.SÃO TOMÉ AND PRÍNCIPEThe FATF welcomes São Tomé and Príncipe’s continuing efforts to implementits AML law. The FATF remains concerned about the significant deficiencies inSão Tomé and Príncipe’s AML/CFT regime, particularly relating to terroristfinancing. The FATF urges São Tomé and Príncipe to work with the InterGovernmental Action Group against Money Laundering in West Africa (GIABA)to address the remaining AML/CFT deficiencies.Note: The Presidency is a one-year position held by a senior official from anFATF jurisdiction. The term of the current President, Mr. Antonio GustavoRodrigues of Brazil, will conclude on 30 June 2009. The current Vice-Presidentis Mr. Paul Vlaanderen of the Netherlands. He assumes the Presidency on 1July 2009.Circular No.Sub: Facility to download PMLA alerts from SQLASSIST intranet site<strong>NSDL</strong>/POLICY/As Participants are aware, alerts for the purpose of reporting to Financial2009/0085 Intelligence Unit (FIU) as per the provisions of Prevention of Money LaunderingDate: September 18, Act, 2002 (PMLA) are being sent to Participants on a fortnightly basis. A facility2009 is being made available on SQLASSIST intranet site of <strong>NSDL</strong> (i.e. http://sqlassist/) under the option ‘PMLA ALERTS DOWNLOAD’ for Participants todownload the alerts for the current and past five fortnights. The alerts willbe made available on the SQLASSIST within five days after the end of everyfortnight eg.: for the fortnight 1 st to 15 th day of the month, the alerts will bemade available by 20 th day of the month and for the fortnight from 16 th to theend of the month, the alerts will be available by 5 th of the subsequent month.The first such alerts will be made available on SQLASSIST for the fortnightSeptember 16-30, 2009 by October 5, 2009. The practice of sending the alertsby email will be continued till the fortnight of October 1-15, 2009.PIN mailer containing User ID and password to access these alerts is beingsent to the Principal Officer by courier. Principal Officers are requested tochange the password after login with the password provided in the PIN mailer.[ 358 ]
For further information / clarification, Participants are requested tocontact Mr. Sandip Patel on Tel No. (022) 2499 4413 (email :sandipp@nsdl.co.in) / Mr. Vinith Nair on Tel. No. (022) 2499 4414 (email :vinithn@nsdl.co.in).Circular No.Sub: Financial Action Task Force (FATF) public statement regarding<strong>NSDL</strong>/POLICY/countries which do not or insufficiently apply the FATF Recommendations.2009/0044 SEBI has forwarded a public statement issued by Financial Action Task ForceDate: June 9, 2009 (FATF) which urges all jurisdictions to strengthen preventive measures toprotect their financial sectors from money laundering and financing ofterrorism (ML/FT) risk posed by certain countries. A copy of the FATF statementdated February 25, 2009 is attached at Annexure 1. The statement is alsoavailable at url: http://www.fatf-gafi.org/dataoecd/18/28/42242615.pdfParticipants are hereby advised to note the contents of the FATF statementfor necessary action and compliance.FATF Statement25 February 2009The FATF welcomes Iran’s initial engagement with the international communityon money laundering. However, the FATF remains concerned by Iran’s failureto meaningfully address the ongoing and substantial deficiencies in its antimoneylaundering and combating the financing of terrorism (AML/CFT) regime.The FATF remains particularly concerned about Iran’s failure to address therisk of terrorist financing and the serious threat this poses to the integrity ofthe international financial system. The FATF urges Iran to immediately andmeaningfully address its AML/CFT deficiencies, in particular by criminalisingterrorist financing and effectively implementing suspicious transactionreporting (STR) requirements.The FATF reaffirms its call on members and urges all jurisdictions to advisetheir financial institutions to give special attention to business relationshipsand transactions with Iran, including Iranian companies and financialinstitutions. In addition to enhanced scrutiny, the FATF further calls on itsmembers and urges all jurisdictions to apply effective counter-measures toprotect their financial sectors from money laundering and financing ofterrorism (ML/FT) risks emanating from Iran. Jurisdictions should also protectagainst correspondent relationships being used to bypass or evade countermeasuresand risk mitigation practices, and take into account ML/FT riskswhen considering requests by Iranian financial institutions to open branchesand in their jurisdiction.The FATF remains prepared to engage directly in assisting Iran to address itsAML/CFT deficiencies, including through the FATF Secretariat.UZBEKISTANThe FATF welcomes the process undertaken by Uzbekistan to adoptcomprehensive AML/CFT measures within a specific timeframe. Nevertheless,given that concrete measures to address the identified deficiencies have notyet been implemented, the FATF reiterates its statement of 16 October 2008,calling on its members and urging all jurisdictions to strengthen preventivemeasures to protect their financial sectors from the ML/FT risk emanatingfrom Uzbekistan.TURKMENISTANDespite a prolonged dialogue with the FATF and other international institutions,Turkmenistan has not yet made progress in adopting AML legislation. Financial[ 359 ]
institutions should remain aware that the lack of an AML/CFT regime inTurkmenistan constitutes an ML/FT vulnerability in the international financialsystem and should take appropriate measures to address this risk. Turkmenistanis urged to adopt without further delay a comprehensive AML/CFT regimethat meets international AML/CFT standards. Turkmenistan is encouraged tocontinue to work closely with the Eurasian Group and the InternationalMonetary Fund to achieve this.PAKISTANThe FATF reaffirms its public statement of 28 February 2008 regarding theML/FT risks posed by Pakistan. The FATF welcomes the process underway inPakistan to improve its AML/CFT regime. The FATF encourages Pakistan tocontinue to fully co-operate with the World Bank and the Asia Pacific Groupon Money Laundering (APG) on its mutual evaluation process.SÃO TOMÉ AND PRÍNCIPEThe FATF welcomes São Tomé and Príncipe’s recent steps toward addressingidentified AML deficiencies, in particular, through the adoption of an AML lawin November 2008. The FATF urges São Tomé and Príncipe to address theremaining AML/CFT deficiencies, particularly relating to terrorist financing.Notes:1. For further information, journalists are invited to contact Helen Fisher,OECD Media Relations, (Tel: +33 1 45 24 80 97 or helen.fisher@oecd.org)or the FATF Secretariat, 2, rue André-Pascal, 75775 Paris Cedex 16 (tel:+33 1 45 24 90 90, fax: +33 1 44 30 61 37, email:contact@fatf-gafi.org).2. The FATF is an inter-governmental body whose purpose is thedevelopment and promotion of policies, both at national andinternational levels, to combat money laundering and terrorist financing.The FATF Secretariat is housed at the OECD.3. The thirty-four members of the FATF are: Argentina; Australia; Austria;Belgium; Brazil; Canada; China; Denmark; the European Commission;Finland; France; Germany; Greece; the Gulf Co-operation Council; HongKong, China; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; theKingdom of the Netherlands; New Zealand; Norway; Portugal; the RussianFederation; Singapore; South Africa; Spain; Sweden; Switzerland; Turkey;the United Kingdom; and the United States.4. India and the Republic of Korea are observer countries. The Asia PacificGroup on Money Laundering (APG) 1 , the Caribbean Financial Action TaskForce (CFATF) 2 , the Grupo de Acción Financiera de Sudamérica(GAFISUD) 3 , the Middle East and North Africa Financial Action Task Force(MENAFATF) 4 and the Council of Europe Committee of Experts on theEvaluation of Anti-Money Laundering Measures and the Financing ofTerrorism (MONEYVAL) 5 are Associate Members.5. The global network that is committed to combating money launderingand terrorist financing also includes three other regional bodies: theEastern and South African Anti Money Laundering Group (ESAAMLG) 6 ,the Eurasian Group on Combating Money Laundering and Financing ofTerrorism (EAG) 7 and the Groupe Inter-gouvernemental d’Action Contrele Blanchiment en Afrique (GIABA) 8 . The Offshore Group of BankingSupervisors (OGBS) 9 is a part of this network as well.1www.apgml.org2www.cfatf.org3www.gafisud.org[ 360 ]
4www.menafatf.org5www.coe.int/moneyval6www.esaamlg.org7www.eurasiangroup.org8www.giaba.org9www.ogbs.netCircular No.Sub: SEBI's advise to Participants regarding providing additional<strong>NSDL</strong>/POLICY/information to FIU-IND at the time filing of STRs under Prevention of2009/0008 Money Laundering Act (PMLA)Date: January 29, 2009 SEBI vide its letter no. ISD/SR/AK/AML/151330/2009 dated January 20, 2009has informed the Depositories that FIU-IND (Financial Intelligence Unit - India)has intimated SEBI that very few Suspicious Transaction Reports (STRs) havebeen received by FIU-IND from the Participants so far and the grounds ofsuspicion in the STRs received from this sector are generally found to bedeficient.In this regard, SEBI has directed the Depositories to advise their Participantsto analyze the alerts sent by Depositories carefully and file STRs in appropriatecases. Further, in order to enable FIU-IND to analyze STRs properly, Participantmay also provide following information in the grounds of suspicion:(i) Details of initial alert.(ii) Information collected during analysis of alert.(iii) KYC information of the Client.(iv) Period and quantum of activities being reported.(v) Name(s) of scrips if reported transaction relates to a particular / fewscrips.(vi) Statement regarding suspicion.Participants are advised to take note of the above and ensure compliance.Circular No.Sub: Prevention of Money Laundering Act, 2002 - 'Revised' alerts<strong>NSDL</strong>/POLICY/Attention of Participants is invited to Circular no. <strong>NSDL</strong>/POLICY/2008/00712008/0088 dated October 16, 2008 regarding generation of alerts as per 'Revised' criteriaDate: December 30, under Prevention of Money Laundering Act, 2002 (PMLA).2008 In this regard, <strong>NSDL</strong> has completed the process of generating the alerts asper the revised criteria. The criteria for 'Revised' alerts are as follows:(i) Details of debits due to off-market or IDT transfers, having value ofRs. 'z' and above, in a single transaction or series of transactions executedin an account, in an ISIN, during the fortnight.(ii) Details of credits due to off-market or IDT transfers, having value ofRs. 'z' and above, in a single transaction or series of transactions executedin an account, in an ISIN, during the fortnight.(iii) Details of debit due to off-market or IDT transfers, involving 'y' or moreshares or having value of Rs. 'z' and above, whichever is smaller, in asingle transaction or series of transactions executed in an account, inan ISIN, during the fortnight, which exceed 10 times the average size ofthe transaction. For this purpose, average is calculated over the totalnumber of securities in all ISINs debited in an account in the past 30days.[ 361 ]
(iv)(v)Details of credit due to off-market or IDT transfers, involving 'y' ormore shares or having value of Rs. 'z' and above, whichever is smaller,in a single transaction or series of transactions executed in an account,in an ISIN, during the fortnight, which exceed 10 times the averagesize of the transaction. For this purpose, average is calculated over thetotal number of securities in all ISINs credited in an account in the past30 days.Details of all transactions involving 'x' or more shares in an account, inan ISIN, in a single transaction or series of transactions executed duringthe fortnight, in respect of the following transactions:o Demat,o Remat ando Pledges.(vi) Details of credits due to off-market or IDT transfers, for more than 'w'transactions, in a single account executed during the fortnight.(vii) Transactions in dormant accounts: Any debit transaction in the dormantaccount will be reported as alert. It may be mentioned that any accounthaving no 'Debit' transaction in the last 6 months will be considered asa 'Dormant' account for this purpose.Please note that the alert mentioned at point no. (vi) above will now be readas follows: "Details of credits due to off-market or IDT transfers, formore than 'w' transactions, in an ISIN, in a single account executed duringthe fortnight."The revised alerts are effective from December 1, 2008.Further, Participants are requested to take note of the following:a) Participants will be required to ascertain whether the transactions/alerts intimated by <strong>NSDL</strong> (on a fortnightly basis) are of a suspiciousnature and submit the report directly to The Director, FIU-IND, in theprescribed format, within seven working days of establishment ofsuspicion.b) For the purpose of reporting suspicious transactions, attention ofParticipants is invited to formats enclosed with SEBI Circular No. ISD/AML/CIR-1/2008 dated December 19, 2008, which were circulated toParticipants along with <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2008/0087 datedDecember 30, 2008.c) Participants are informed that 'Nil' report need not be filed with FIU-IND (refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0035 dated August 25,2006).d) Participants are advised to inform <strong>NSDL</strong> about the number of STRs filedby the Participants with FIU-IND (refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2008/0052 dated July 26, 2008).e) Participants are also advised to keep FIU-IND informed about the name,address, email-id and contact details of Principal Officer. Any changetherein must also be intimated to FIU-IND & <strong>NSDL</strong>.For further information, Participants are requested to contact Mr. Amit Shindeon Tel No. (022) 2499 4486 (email: shindea@nsdl.co.in) / Mr. Vinith Nair onTel. No. (022) 2499 4414 (email: vinithn@nsdl.co.in).[ 362 ]
Circular No.Sub: Alerts as per 'Revised' criteria under Prevention of Money Laundering<strong>NSDL</strong>/POLICY/ Act, 2002.2008/0071 Attention of Participants is invited to Circular no. <strong>NSDL</strong>/POLICY/2008/0028Date: October 16, dated April 23, 2008 regarding the revised criteria for generation of alerts2008 under Prevention of Money Laundering Act, 2002 (PMLA).In this regard, both the Depositories and their representative Participantshave reviewed the existing criteria with a view to further fine-tune thealerts being generated and finalized the revised parameters / criteria. The'Revised' alerts are as follows:(i) Details of debits due to off-market or IDT transfers, having value of Rs.'z' and above, in a single transaction or series of transactions executedin an account, in an ISIN, during the fortnight.(ii) Details of credits due to off-market or IDT transfers, having value ofRs. 'z' and above, in a single transaction or series of transactionsexecuted in an account, in an ISIN, during the fortnight.(iii) Details of debit due to off-market or IDT transfers, involving 'y' ormore shares or having value of Rs. 'z' and above, whichever is smaller,in a single transaction or series of transactions executed in an account,in an ISIN, during the fortnight, which exceed 10 times the average sizeof the transaction. For this purpose, average is calculated over thetotal number of securities in all ISINs debited in an account in the past30 days.(iv) Details of credit due to off-market or IDT transfers, involving 'y' ormore shares or having value of Rs. 'z' and above, whichever is smaller,in a single transaction or series of transactions executed in an account,in an ISIN, during the fortnight, which exceed 10 times the averagesize of the transaction. For this purpose, average is calculated over thetotal number of securities in all ISINs credited in an account in the past30 days.(v) Details of all transactions involving 'x' or more shares in an account, inan ISIN, in a single transaction or series of transactions executed duringthe fortnight, in respect of the following transactions:o Demat,o Remat ando Pledges.(vi) Details of credits due to off-market or IDT transfers, for more than 'w'transactions, in a single account executed during the fortnight.(vii) Transactions in dormant accounts: Any debit transaction in the dormantaccount will be reported as alert. It may be mentioned that any accounthaving no 'Debit' transaction in the last 6 months will be considered asa 'Dormant' account for this purpose.<strong>NSDL</strong> is in the process of generating alerts as per the aforesaid revised criteriaand Participants will be informed regarding the same in due course. Till thattime the alerts which were circulated to Participants vide our aforesaid Circulardated April 23, 2008 will continue to be sent to Participants on a fortnightlybasis.[ 363 ]
Further, Participants are requested to take note of the following:(i) Participants will be required to ascertain whether the transactions/alerts intimated by <strong>NSDL</strong> are of a suspicious nature and submit thereport directly to The Director, FIU-IND, in the prescribed format, withinseven working days of establishment of suspicion.(ii) For the purpose of reporting suspicious transactions, attention ofParticipants is invited to formats enclosed with SEBI Circular No. ISD/CIR/RR/AML/2/06 dated March 20, 2006, which was circulated toParticipants along with <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2006/0025 datedJuly 17, 2006.(iii) Participants are also advised to keep FIU-IND informed about the name,address, email-id and contact details of Principal Officer. Any changetherein must also be intimated to FIU-IND & <strong>NSDL</strong>.For further information, Participants are requested to contact Mr. Amit Shindeon Tel No. (022) 2499 4486 (email: shindea@nsdl.co.in) / Mr. Vinith Nair onTel. No. (022) 2499 4414 (email: vinithn@nsdl.co.in).Circular No.Sub: Filing of Suspicious Transaction Report (STR) to Financial Intelligence<strong>NSDL</strong>/POLICY/ Unit-India (FIU-IND) under Prevention of Money Laundering Act, 20022008/0052 (PMLA) guidelines.Date: July 26, 2008 Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2008/0028 dated April 23, 2008 regarding submission of informationto Financial Intelligence Unit-India (FIU-IND) and generation of alerts as per'Revised' criteria under Prevention of Money Laundering Act, 2002 (PMLA). Asper the said circular, <strong>NSDL</strong> had advised DPs to ascertain whether thetransactions/alerts intimated by <strong>NSDL</strong> are of a suspicious nature and submitthe report directly to The Director, FIU-IND, in the prescribed format, withinseven working days of establishment of suspicion.In the meeting held on July 7, 2008, SEBI has advised both the depositoriesthat DPs should inform their respective depositories regarding the number ofSTRs filed by DPs with the FIU-IND during a month for onward submission toSEBI.In view of the aforesaid, all DPs are hereby advised to inform <strong>NSDL</strong> about thenumber of STRs filed by the DP with FIU-IND for the month by 7th of thefollowing month in the below mentioned format on the email ID of the PrincipalOfficer of <strong>NSDL</strong> (PrincipalOfficer-<strong>NSDL</strong>@nsdl.co.in). Further, DPs need notsubmit a 'NIL' report to <strong>NSDL</strong>.DP ID DP Name Month & Year No. of STRsFor the purpose of reporting suspicious transactions, attention of DPs is invitedto formats enclosed with SEBI Circular No. ISD/CIR/RR/AML/2/06 dated March20, 2006, which was circulated to DPs vide <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006.[ 364 ]
Circular No.Sub: Generation of alerts as per 'Revised' criteria under Prevention of<strong>NSDL</strong>/POLICY/ Money Laundering Act, 2002.2008/0028 Attention of Depository Participants (DPs) is invited to Circular no. <strong>NSDL</strong>/Date: April 23, 2008 POLICY/2007/0070 dated November 12, 2007 regarding change in the criteriafor generating alerts on the advise of Financial Intelligence Unit-India (FIU-IND) under Prevention of Money Laundering Act, 2002 (PMLA).DPs are requested to note that the criteria for generation of alerts withrespect to point nos. (iii) and (iv) of the aforesaid circular have undergonechanges. The revised criteria for generation of alerts is given below:(i) Details of debits due to off-market or IDT transfers, involving 'x' ormore shares or having value of Rs. 'y' and above, whichever is smaller,in an account, in an ISIN, in a single transaction or series of transactionsexecuted during the fortnight.(ii) Details of credits due to off-market or IDT transfers, involving 'x' ormore shares or having value of Rs. 'y' and above, whichever is smaller,in an account, in an ISIN, in a single transaction or series of transactionsexecuted during the fortnight.(iii) Details of debit transactions involving 'w' or more shares or havingvalue of Rs. 'y' and above, whichever is smaller, in a single transactionor series of transactions executed during the fortnight, in an account,in an ISIN, which exceed 10 times the average size of the transaction.For this purpose, average is calculated over the total number of securitiesin all ISINs debited in an account in the past 30 days.(iv) Details of credit transactions involving 'w' or more shares or havingvalue of Rs. 'y' and above, whichever is smaller, in a single transactionor series of transactions executed during the fortnight, in an account,in an ISIN, which exceed 10 times the average size of the transaction.For this purpose, average is calculated over the total number of securitiesin all ISINs credited in an account in the past 30 days.(v) Details of all transactions involving 'w' or more shares in an account, inan ISIN, in a single transaction or series of transactions executed duringthe fortnight, in respect of the following transactions:o Demat ;o Remat ando Pledges.(vi) Details of credits due to off-market or IDT transfers, for more than 'v'transactions, in a single account executed during the fortnight.(vii) Transactions in dormant accounts: Any debit transaction in the dormantaccount will be reported as alert. It may be mentioned that any accounthaving no 'Debit' transaction in the last 6 months will be considered as'Dormant' account for this purpose.The revised alerts are effective from April 1, 2008, which will be sent to DPson a fortnightly basis.[ 365 ]
DPs are also requested to take note of the following:(i)(ii)(iii)DPs will be required to ascertain whether the transactions/alertsintimated by <strong>NSDL</strong> are of a suspicious nature and submit the reportdirectly to The Director, FIU-IND, in the prescribed format, within sevenworking days of establishment of suspicion.For the purpose of reporting suspicious transactions, attention of DPs isinvited to formats enclosed with SEBI Circular No. ISD/CIR/RR/AML/2/06 dated March 20, 2006, which was circulated to DPs along with <strong>NSDL</strong>Circular no. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006.DPs are also advised to keep FIU-IND informed about the name, address,email-id and contact details of Principal Officer. Any change thereinmust also be intimated to FIU-IND & <strong>NSDL</strong>.Circular No.Sub: SEBI's advise to Depositories and Depository Participants (DPs) on<strong>NSDL</strong>/POLICY/Compliance with Prevention of Money Laundering Act (PMLA) and Rules2008/0003 framed there-underDate: January 17, 2008 Attention of DPs is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0013 datedMay 2, 2006 wherein DPs were advised to report the details of 'PrincipalOfficer' to Financial Intelligence Unit-India (FIU-IND) and a subsequentreminder vide <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0019 dated June 21,2006 regarding appointment of Principal Officer.In this regard, SEBI vide its letter ISD/SR/AK/AML/113767/2008 dated January14, 2008 has informed the depositories that compliance by DPs with the keyobligations of PMLA and Rules framed there-under has not been satisfactoryand large number of entities have still not fulfilled these key requirements.Further, SEBI has advised the depositories to ensure enhanced compliancestandards by their DPs and to monitor performance on a regular basis.In view of the aforesaid, all DPs are hereby directed / advised to ensurestrict compliance of the below mentioned requirements:1. to appoint 'Principal Officer' under PMLA and inform his particulars toFIU-IND immediately, if not done.2. to frame Anti Money Laundering (AML) policy containing 'ClientIdentification Programme' and internal mechanism for identification andreporting of suspicious transactions and submit copy of the same toFIU-IND on an immediate basis.DPs are also advised to keep FIU-IND & <strong>NSDL</strong> informed about any change inthe name, address, email-id and contact details of 'Principal Officer'.For the purpose of reporting suspicious transactions, DPs are once again advisedto refer the formats enclosed with SEBI Circular No. ISD/CIR/RR/AML/2/06dated March 20, 2006, which was circulated to DPs along with <strong>NSDL</strong> Circularno. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006.[ 366 ]
Circular No.Sub: Submission of information to Financial Intelligence Unit-India under<strong>NSDL</strong>/POLICY/ Prevention of Money Laundering Act, 20022007/0070 Attention of Depository Participants (DPs) is invited to Circular no. <strong>NSDL</strong>/Date: November POLICY/2006/0025 dated July 17, 2006 regarding submission of information12, 2007 to Financial Intelligence Unit-India (FIU-IND) under Prevention of MoneyLaundering Act, 2002 (PMLA).In this regard, FIU-IND has advised both the depositories to enhance the scope/ quality of alerts sent to DPs to identify suspicious transactions.Accordingly, the following criteria have now been finalised amongst thedepositories for generating alerts (pertaining to Off-market transactionsonly):(i) Details of debits due to off-market or IDT transfers, involving ‘x’ ormore shares or having value of Rs. ‘y’ and above, whichever is smaller,in an account, in an ISIN, in a single transaction or series of transactionsexecuted during the fortnight.(ii) Details of credits due to off-market or IDT transfers, involving ‘x’ ormore shares or having value of Rs. ‘y’ and above, whichever is smaller,in an account, in an ISIN, in a single transaction or series of transactionsexecuted during the fortnight.(iii) Details of debit transactions (subject to minimum of ‘z’ shares), ifsecurities debited in a single transaction or series of transactionsexecuted during the fortnight, in an account, in an ISIN, exceed 10times the average size of the transaction. For this purpose, averagewas calculated over the total number of securities in all ISINs debitedin an account in the past 30 days.(iv) Details of credit transactions (subject to minimum of ‘z’ shares), ifsecurities credited in a single transaction or series of transactionsexecuted during the fortnight, in an account, in an ISIN, exceed 10times the average size of the transaction. For this purpose, averagewas calculated over the total number of securities in all ISINs creditedin an account in the past 30 days.(v) Details of all transactions involving ‘w’ or more shares in an account, inan ISIN, in a single transaction or series of transactions executed duringthe fortnight, in respect of the following transactions:• Demat ;• Remat and• Pledges.(vi) Details of credits due to off-market or IDT transfers, for more than ‘v’transactions, in a single account executed during the fortnight.(vii) Transactions in dormant accounts: Any debit transaction in the dormantaccount will be reported as alert. It may be mentioned that any accounthaving no ‘Debit’ transaction in the last 6 months will be considered as‘Dormant’ account for this purpose.<strong>NSDL</strong> is in the process of generating alerts as per the aforesaid modifiedcriterion and DPs will be informed regarding the same in due course.[ 367 ]
Further, FIU-IND has also advised the depositories to do the following:1. To incorporate the ‘Financial status’ and ‘Nature of Business’ of clientin the Account Opening Form (AOF).2. To incorporate ‘Consideration’ and ‘Reasons/Purpose’ in DeliveryInstruction Slip (DIS) used for Off-market transactions.The modified AOF & DIS are incorporated in the Circular No. <strong>NSDL</strong>/POLICY/2007/0069 dated November 12, 2007 which is being issued simultaneously.DPs will be required to obtain the details in the AOF and DIS respectively,from the account holders which shall be in the form of declaration.DPs will be required to ascertain whether the transactions/alerts intimatedby <strong>NSDL</strong> are of a suspicious nature and submit the report directly to TheDirector, FIU-IND, in the prescribed format, within seven working days ofestablishment of suspicion. Further, DPs are advised to undertake KYCreconfirmation exercise for these accounts including ‘Financial Status’ whilescrutinizing the alerts.For the purpose of reporting suspicious transactions, attention of DPs is invitedto formats enclosed with SEBI Circular No. ISD/CIR/RR/AML/2/06 dated March20, 2006, which was circulated to DPs along with <strong>NSDL</strong> Circular no. <strong>NSDL</strong>/POLICY/2006/0025 dated July 17, 2006.DPs are also advised to keep FIU-IND informed about the name, address,email-id and contact details of Principal Officer. Any change therein mustalso be intimated to FIU-IND & <strong>NSDL</strong>.For further information, DPs are requested to contact Mr. Amit Shinde onTel No. (022) 2499 4486 (email : shindea@nsdl.co.in) / Mr. Vinith Nair onTel. No. (022) 2499 4414 (email : vinithn@nsdl.co.in).Circular No.Sub : Amendment to the Rules framed under the Prevention of Money<strong>NSDL</strong>/POLICY/ Laundering Act, 20022007/0839 With reference to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2006/0002 dated JanuaryDate: July 11, 2007 23, 2006, all Depository Participants (DPs) are hereby informed that theSecurities and Exchange Board of India has vide its letter no. ISD/RR/AK/AML/97765/07 dated July 2, 2007 (copy enclosed) advised <strong>NSDL</strong> to intimatethe DPs regarding Amendment to the Rules framed under the Prevention ofMoney Laundering Act, 2002.OFFICER ON SPECIAL DUTYINTEGRATED SURVEILLANCE DEPARTMENTThe Managing Director<strong>NSDL</strong>Trade World, 4th Floor,Kamla Mills CompoundSenapati Bapat Marg,Lower ParelMumbai 400 013DPs are advised to ensure compliance of the above.AnnexureISD/RR/AK/AML/97765/07July 2, 2007[ 368 ]
Dear Sir,Subject: Amendment to the Rules framed under the Prevention of Money Laundering Act,2002.The Prevention of Money Laundering (Maintenance of Records of the Nature and Value of Trasactions,the Procedure and Manner of Maintaining and Time for furnishing Information and Verification andMaintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutionsand Intermediaries) Rules, 2005 framed under the Prevention of Money Laundering Act. 2002 have beenamended vide Gazette notification dated May 24, 2007.A copy of the notification is enclosed for reference. You may bring the contents of the said amendmentto the notice of intermediaries registered through you for compliance.Yours faithfully.R RavichandranEncl: a.a.MINISTRY OF FINANCE(Department of Revenue)NOTIFICATIONNew Delhi, the 24th May, 2007G.S.R. 389(E).-In exercise of the powers conferred by sub-section (I) read with clause (h), clause(i), clause (j) and clause (k) of sub-section (2) of section 73 of the Prevention of Money-laundering Act,2002 (15 of 2003), the Central Government, in consultation with the Reserve Bank of India, herebymakes the following rules further to amend the Prevention of Money-laundering (Maintenance of Recordsof the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for FurnishingInformation and Verification and Maintenance of Records of the Identity of the Clients of the BankingCompanies, Financial Institutions and Intermediaries) Rules, 2005, namely:-1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records ofthe Nature and Value of Transactions, the Procedure and Manner of Maintaining and Timefor Furnishing Information and Verification and Maintenance of Records of the Identity ofthe Clients of the Banking Companies, Financial Institutions and Intermediaries) AmendmentRules, 2007.(2) They shall come into force on the date of their publication in the Official Gazette.2. In the Prevention of Money-laundering (Maintance of Records of the Nature and Value of transactions,the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification andMaintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutionsand Intermediaries) Rules, 2005,-(i) in rule 2, in sub-rule (I), clause (g), for sub-clause (c), the following sub-clauses shall besubstituted, namely:-“(c) appears to have no economic rationale or bona fide purpose: or(d) gives rise to a reasonable ground of suspicion that it may involve financing of theactivities relating to terrorism;”;(ii) in rule 3, in sub-rule (I), for clause (C), the following clause shall be substituted, namely,-“(C) all cash transactions where forged or counterfeit currency notes or bank notes havebeen used as genuine or where any forged or counterfeit currency notes or bank notes[ 369 ]
have been used as genuine or where any forgery of a valuable security or a documenthas taken place facilitating the transactions;”;(iii) for rule 8, the following rule shall be substituted, namely:-“8. Furnishing of information to the Director.-(I) The Principal Officer of a banking company,a financial institution and an intermediary, as the case may be, shall furnish theinformation in respect of transactions referred to in clause (A) and (B) of sub-rule (I)of rule 3 every month to the Director by the 15th day of the succeeding month.(2) The Principal Officer of a banking company, a financial institution and an intermediary,as the case may be, shall furnish the information promptly in writing or by fax or byelectronic mail to the Director in respect of transactions referred to in clause (C) ofsub-rule (I) of rule 3 not later than seven working days from the date of occurrence ofsuch transaction.(3) The Principal Officer of a banking company, a financial instituion and an intermediary,as the case my be, shall furnish the information promptly in writing or by fax or byelectronic mail to the Director in respect of transactions referred to in clause (D) ofsub-rule (1) of rule 3 not later than seven working days on being satisfied that thetransaction is suspicious.”;(iv) in rule 9,-(a) in sub-rule (3), (4) and (5), for the words “three certified copies”, the words “onecertified copy” shall be substituted;(b) in sub-rule (6), for the words “three copies”, the words “one certified copy” shall besubstituted.[Notification No. 4/2007-E.S./F. No. 6/13/2005-E.S.]MUKUL SINGHAL, Jt. Secy.Note:The principal rules were published in Part-II, Section 3, Sub-section (i) of the Gazette of India,Extraordinary vide notification Number G.S.R. 444(E), dated the 1st July, 2005 and subsequentlyamended vide notification number G.S.R.717(E),dated the 13th December, 2005.Circular No.Sub : Submission of report to Financial Intelligence Unit-India under the<strong>NSDL</strong>/POLICY/ Prevention of Money Laundering Act, 20022006/0035 Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/POLICY/2006/Date: August 25, 2006 0025 dated July 17, 2006 regarding submission of information to FinancialIntelligence Unit-India (FIU-IND) under the Prevention of Money LaunderingAct, 2002.In this regard, all Participants are informed that FIU-IND has intimated to<strong>NSDL</strong> vide its letter no. F.No.17-1/2006-FIU dated August 14, 2006 that 'Nil'report need not be filed with FIU-IND. All other provisions of the aforesaidcircular remain unchanged.Circular No.CONFIDENTIAL<strong>NSDL</strong>/POLICY/Sub : Submission of information to Financial Intelligence Unit-India under2006/0025 Prevention of Money Laundering Act, 2002Date: July 17, 2006 This circular is sent to the Compliance Officer in hard copy form.❑ ❑ ❑[ 370 ]
NOTES[ 371 ]
NOTES[ 372 ]
11. Connectivity / ReconciliationRegulation 47Bye Law 6.3.5Bye Law 6.3.7Bye Law 6.3.10Bye Law 10.1.1Bye Law 10.1.3Clause 12 of <strong>NSDL</strong>-DP AgreementRule 15.1.1Rule 15.1.2Rule 15.1.3Every participant shall reconcile his records with every depository in which itis a participant, on a daily basisThe Depository shall obtain, on a daily basis, the Client details from allParticipants. The details shall be obtained in respect of the changes in theaccounts of the Clients from the processing undertaken at the end of theprevious working day. The Client details shall include the Client name, addressand also the security wise details of the balance of the Client.It shall be the responsibility of each Participant to promptly check and reconcilewith its own records the details of such advices, statements and reports andto promptly notify the Depository of any error or omission contained in suchadvices, statements and reports within the time specified by the Depository.Every Participant shall reconcile his records with those of the Depository on adaily basis.The Participant shall intimate the Depository, all security balances held bythe Participant with the Depository on a daily basis at the end of the day andthe said balances will be reconciled with its balance held by the Depository.If there is failure of the reconciliation as specified in Bye Law 10.1.1 and ByeLaw 10.1.2 above, the Depository may initiate necessary action includingsuspension of a Participant or suspension of transactions in a particular securitytill the process of reconciliation has been completed.The Participant shall reconcile its own records with those of <strong>NSDL</strong> on a dailybasis and in such manner as may be specified in the Business Rules.The Participant shall effect internal reconciliation of its accounts on a dailybasis through the DPM (DP) or the DPM (CC) as the case may be.The Participant shall reconcile the total of balances held in different accountsin the DPM (DP) or the DPM (CC), as the case may be, with its balance held inthe DM on a daily basis.The Participant shall, at the end of each day, electronically provide to theDepository the details of the changes made in the accounts of the Client fromthe last EOD processing.Readiness for Dial-up connectivityCircular No.<strong>NSDL</strong>/PMC/Email-182/2006Date: Nov 11, 2006Sub : Dial up connectivity (PPP) register to be maintained<strong>NSDL</strong> has issued guidelines in the past about the procedure to be followed incase of Dial up connectivity. Dial up or PPP is the fallback option available incase of failure of the primary connectivity for VSAT as well as Leased lineusers. During inspection it was observed that though PPP testing is carriedout regularly, record of the same is not available with the BPs.All Business Partners are advised to maintain a register (either online or offline)in the following format to record the Dial up (PPP) activity carried out. <strong>NSDL</strong>inspecting officer can ask for verification of this register.[ 373 ]
Format:Date of Reason for dialup Type of dialup: Officer carrying <strong>NSDL</strong>dialup and whether sync. (dial out dialup officersuccessful through router)or not/ async.(PPP)Circular No.<strong>NSDL</strong>/PI/2002/1736Date : October 9, 2002Please note that both routine testing as well as emergency connectivity shouldbe logged in the above register. The system in charge of the Business Partnershould check this register at regular intervals (say every month) and initiateaction if required. Necessary comments may be made, upon review by thesystems in charge in the same register along with signature.As per SEBI Regulations, it is mandatory to maintain continuous electronicmeans of communication between the Depository and its Participants. Forthis purpose the primary mode of connectivity between the Participant's DPMsystem and <strong>NSDL</strong> is either through VSAT or leased line. Participants are alsorequired to maintain dial-up telephone line as a fall back to the primarymode of connectivity. However, there have been instances where Participant'sprimary mode of connectivity had failed and Participants were unable toestablish dial-up connectivity.In order to ensure readiness of Participants to meet such eventualities, <strong>NSDL</strong>on a random basis, has been advising Participants to connect their DPM setupthrough dial-up mode. The procedure for connecting their DPM setup throughdial-up mode is provided to Participants alongwith the CD for SystemsAdministrator Training. However, it has been observed that many Participantshave failed to connect their DPM system through dial-up link.Participants are therefore advised to train their staff so as to ensure thatconnectivity to <strong>NSDL</strong> is established using telephone dial-up facility. Theaforesaid procedure for configuration of various types of modems is also postedon <strong>NSDL</strong> Intranet Server (http://sqlassist), under the heading "OnlineConnectivity Documents".WAN to WAN ConnectivityCircular No.WAN TO WAN is a browser-based application, which will enable the branches<strong>NSDL</strong>/PI/2001/1849 of the Participant to directly interact with its DPM server through Participant'sDate: December 18, own Wide Area Network (WAN) and provide upto date information and2001 depository services to its clients.Participants who wish to avail WAN to WAN connectivity facility, are advisedto note the following:1. Participants will need permission from the Department ofTelecommunication (DOT) for the purpose of its WAN connectivity withthat of <strong>NSDL</strong>.2. Participants will have to follow the policy guidelines of CUG to CUGissued by DOT, from time to time.3. Participants may have to upgrade their DPM server and provide foradditional hardware to support this function. <strong>NSDL</strong> will provide thesizing guidelines in this regard on one to one basis depending on thevolume envisaged by Participant and present size of operation.[ 374 ]
4. Participants will have to adhere to the security requirements asprescribed by <strong>NSDL</strong>. It may be noted that the security requirementsmay vary from case to case depending upon the usage of the interconnectivity and the same will be provided separately to theParticipants.5. Participants will have to ensure that access to DPM system from branchoffices are appropriately authorised.6. Participants will be required to configure its own WAN router as per thespecifications of <strong>NSDL</strong> and Participants will also be required to install afirewall prescribed by <strong>NSDL</strong>.7. Participants will have to apply service pack 6 (SP6) on Windows NToperating system of its DPM server before installing WAN TO WANsoftware.The fees payable for availing of this facility is Rs. 40,000/-per annum per DPM setup. The fees shall be payable to <strong>NSDL</strong> everyyear, in advance.Participants may contact Mr. Jignesh Gandhi or Mr. Milind Mungale on Tel. No.(022) 460 8037 / 497 6347, in case any further clarification is required.❑ ❑ ❑[ 375 ]
NOTES[ 376 ]
12. Record KeepingSection 2 (I)Regulation 49 (1)Regulation 49 (4)Regulation 49 (5)Regulation 50Regulation 51Bye Law 10.2.7Bye Law 10.2.8Bye Law 10.2.9Rule 16.1.1Record includes the records maintained in the form of Books or stored in acomputer or in such other form as may be determined by regulations.Every participant shall maintain the following records and Documents, namely:-a) records of all the transactions entered into with a depository and witha beneficial owner;b) details of securities dematerialised, rematerialised on behalf ofbeneficial owners with whom it has entered into an agreement;c) records of instructions received from beneficial owners and statementsof account provided to beneficial owners; andd) records of approval, notice, entry and cancellation of pledge orhypothecation, as the case may be.Every participant shall intimate the Board the place where the records anddocuments are maintained.Subject to the provisions of any other law, the participant shall preserverecords and documents for a minimum period of five years.Where records are kept electronically by the participant, it shall ensure thatthe integrity of the data processing systems is maintained at all times andtake all precautions necessary to ensure that the records are not lost,destroyed or tampered with and in the event of loss or destruction, ensurethat sufficient back up of records is available at all times at a differentplace.If a participant enters into an agreement with more than one depository, itshall maintain the records specified in regulation 49 separately in respect ofeach depository.Every Participant shall maintain the following records and documents, namely:a) records of all the transactions entered into with a Depository and witha Client;b) details of securities dematerialised, rematerialised on behalf of Clientswith whom it has entered into an agreement;c) records of instructions received from Clients and statements of accountprovided to Clients; and,d) records of approval, notice, entry and cancellation of pledge orhypothecation, as the case may be.Every Participant shall intimate the Depository, the place where the recordsand documents are maintained.Subject to the provisions of any other law, the Participant shall preserverecords and documents for a minimum period of five years.Every Participant of the Depository shall maintain the following records relatingto its business for a period of five years :-i. Delivery/Receipt Instructions given by its Clients.ii. Forms submitted by the Clients to the Participant for : -a) Opening of accounts with the Participant;b) Closing of accounts with the Participant;[ 377 ]
Rule 16.1.2Rule 16.1.3c) Freezing of accounts with the Participant;d) Defreezing of accounts with the Participant.iii. Copies of correspondence from the Clients on the basis of which Clientsdetails were updated in the DPM;iv. Record of all actions taken on the exception reports, generated by thesystem;v. A register showing details of grievances received from the Clients andtheir present status. The following details may be specified in thisregard:-a) name of the Client;b) reference number of the Client;c) date;d) particulars of complaints;e) actions taken by the Participant;vi. if the matter is referred to arbitration, then the particulars includingthe present status thereof.vii. instructions received from the Clearing Member to transfer balancesfrom the Pool account to the Delivery account of the Clearing Memberin order to enable it to meet its obligations to the Clearing Corporation;viii. instructions from the clearing member authorising the transfer ofsecurities from the pool account of the clearing member to the accountsof its clientsix. The forms received in respect of pledge of securities;x. The forms received in respect of transmission of securitiesxi. The forms received in respect of securities lending.xii. Record of serial numbers of the instruction forms for debit or pledge ofsecurities in a Client account, issued to its Clients.The following records pertaining to dematerialisation and rematerialisationof securities shall be kept by the Participants until the process ofdematerialisation or rematerialisation is completed :-i. Dematerialisation request form (DRF and DRF-GS) filled by the Client;ii. Certificate details of securities sent for dematerialisation;iii. Proof of deliveries of DRF and securities to the Issuer or its Registrarand Transfer Agent and proof of delivery of DRF-GS and GovernmentSecurities to the Depository;iv. Objection memo and certificate details of the rejected securities againstthe DRN;v. Rematerialisation Request Form (RRF and RRF-GS) submitted by theClientvi. Proof of delivery of RRF to the Issuer or its Registrar & Transfer Agentand proof of delivery of RRF-GS to the Depository.The Participant shall intimate to the Depository, the place where the aboverecords are kept and available for audit/inspection[ 378 ]
Rule 16.1.4Rule 16.4.1The above requirements relating to maintenance of records shall apply notonly to the records of the Participant's principal office but also any branchoffice and to any nominee company owned or controlled by the Participantfor the purpose of conducting the business of the Participant relating to theoperations of the Depository.The records specified in Rules 16.1 and 16.2 above may be maintained eitherin physical or in electronic form. Where the records are kept by the Participantor the Issuer or its Registrar & Transfer Agent in electronic form, it shall do sowith the prior approval of the Depository and shall ensure that the integrityof the data processing systems is maintained at all times and take allprecautions necessary to ensure that the records are not lost, destroyed ortampered with and ensure that sufficient backup of records is available at alltimes at a different place. However, the prior approval of the Depository isnot required if the Participant has been permitted to receive instructionsfrom the Client in an electronic form in the manner specified in the firstproviso to Rule 4.5.1.SEBI circular on maintenance of records and documentsCircular No.Sub: Preservation of records<strong>NSDL</strong>/POLICY/Attention of Participants is invited to Regulation 49 of SEBI (Depositories and2009/0121 Participants) Regulations, 1996, Bye Laws 10.2.7, 10.2.9, Chapter 16 of theDate: December 12, Business Rules of <strong>NSDL</strong> and Circular no. <strong>NSDL</strong>/PI/2005/1476 dated August 12,2009 2005 that require Participants to preserve records and documents for aminimum period of five years. Further, all Participants are hereby informedregarding the SEBI Circular no. MRD/DoP/DEP/Cir-20/2009 dated December9, 2009 (copy enclosed) about preservation of records.Participants are advised to take note of the above and ensure compliancewith SEBI's instructions.DEPUTY GENERAL MANAGERMarket Regulation Department - Division of PolicyE-mail: harinib@sebi.gov.inMRD/DoP/DEP/Cir-20/2009December 9, 20091. The Managing Director, <strong>NSDL</strong> and2. The Executive Director, CDSLDear Sir,Sub: Preservation of records1. This circular is issued in supersession of SEBI circular no. SEBI/MRD/DEP/Cir-16/2005 dated August4, 2005 and SEBI/MRD/DEP/Cir-24/05 dated December 22, 2005.2. In terms of regulations 38 and 49 of the SEBI (Depositories and Participants) Regulations, 1996(hereinafter referred to as D&P Regulations, 1996), Depositories and Depository Participants arerequired to preserve the records and documents for a minimum period of 5 years. In case suchdocuments are maintained in electronic form, provisions of Information Technology Act, 2000 inthis regard shall be complied with.[ 379 ]
3. Further, it has been noticed that enforcement agencies like CBI, Police, Crime Branch etc. havebeen collecting copies of the various records/documents during the course of their investigation.The originals of such documents maintained either in physical or in electronic form or in bothwould be required by such enforcement agencies during trial of the case also.4. In view of the above, it is clarified that if a copy is taken by such enforcement agency either fromphysical or electronic record then the respective original is to be maintained till the trial orinvestigation proceedings have concluded.5. The Depositories are advised to:-a) make amendments to the relevant bye-laws, rules and regulations for the implementation ofthe above decision immediately, as may be applicable/necessary ;b) bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website; andc) communicate to SEBI the status of the implementation of the provisions of this circular inMonthly Development Report.6. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,HARINI BALAJICircular No.<strong>NSDL</strong>/PI/2005/1476Date: August 12, 2005Attention of Participants is invited to Regulation 49 of SEBI (Depositories andParticipants) Regulations, 1996, Bye Laws 10.2.7, 10.2.9 & Chapter 16 of theBusiness Rules of <strong>NSDL</strong> that require Participants to preserve records anddocuments for a minimum period of five years. SEBI vide its circular no. SEBI/MRD/DEP/Cir- 16/2005 dated August 4, 2005 (copy enclosed) has advised theParticipants that if copies of various documents / records are taken by CBI,Police or any other enforcement agency during the course of any investigation,Participants will be required to preserve the original records and documents,both in electronic and physical form as the case may be, till the completionof the trial.Participants are advised to ensure compliance of the above.GENERAL MANAGERMarket Regulation DepartmentDivision of Policy1. The Managing Director, <strong>NSDL</strong> and2. The Executive Director, CDSLDear Sir,AnnexureSub: Maintenance of books of accounts and other documentsSEBI/MRD/DEP/Cir- 16/2005August 4, 20051. In terms of regulations 38 and 49 of the SEBI (Depositories and Participants) Regulations, 1996(hereinafter referred to as D&P Regulations, 1996), Depositories and Depository Participants arerequired to preserve the records and documents for a minimum period of 5 years.[ 380 ]
2. It is noticed that enforcement agencies like CBI, Police, Crime Branch etc. have been collectingcopies of the various records/documents during the course of their investigation. These originaldocuments both in physical form and electronic form would be required by such enforcementagencies during trial of the case also.3. In view of the above, not withstanding anything contained in D&P Regulations, 1996, you areadvised to preserve the originals of the documents, both in electronic and physical form, copiesof which have been taken by CBI, Police or any other enforcement agency during the course of anyinvestigation till the trial is completed.4. The Depositories are advised to:-a) make amendments to the relevant bye-laws, rules and regulations for the implementationof the above decision immediately, as may be applicable/necessary ;b) bring the provisions of this circular to the notice of the DPs of the Depositories and also todisseminate the same on the website; andc) communicate to SEBI the status of the implementation of the provisions of this circular inSec. III Item No. E of the Monthly Development Report for the month of September 2005.5. This circular is being issued in exercise of the powers conferred by Section 11(1) of Securities andExchange Board of India Act, 1992 to protect the interest of investors in securities and to promotethe development of, and to regulate, the securities market.Yours faithfully,V S SUNDARESAN❑ ❑ ❑[ 381 ]
NOTES[ 382 ]
13. Systemsa. GeneralRegulation 45Every participant shall maintain continuous electronic means of communicationwith each depository in which it is a participantClause 13 of <strong>NSDL</strong>- The Participant shall install at its computer center, client server, hardwareDP Agreementconfiguration with system database, communication and application softwareas prescribed by <strong>NSDL</strong>.a) Unless otherwise supplied directly by <strong>NSDL</strong>, all hardware and softwarein accordance with prescribed configuration shall be procured by theParticipant from <strong>NSDL</strong> empanelled brands only.b) The above hardware and software set-up shall be dedicated for <strong>NSDL</strong>specific application module and even if there is spare processing/datastorage capacity, the same shall not be used for any other applicationincluding the Participant's backoffice system.c) The above hardware may be connected by the Participant to theirinternal LAN for data transfer purpose.d) The above hardware shall not be connected by the Participant to theirinteroffice WAN without the prior written permission of <strong>NSDL</strong>. <strong>NSDL</strong>reserves the right to deny such permission if in its opinion granting suchpermission involves violation of conditions relating to the operations of<strong>NSDL</strong>'s WAN as stipulated by Department of Telecommunications or anyother reasons as may be deemed fit by <strong>NSDL</strong>.e) The Participant shall carry out modification, upgradation, replacementand deletion for the above mentioned configuration from time to timeas may be prescribed by <strong>NSDL</strong>.Rule 4.1.1.The User shall carry out transactions relating to the Depository only throughthe approved User Hardware System located at approved locations of theoffice of the User. No other workstation, computer system or hardware maybe connected to the User Hardware System without the prior approval of theDepository.Rule 4.1.3A User shall have a non-exclusive permission to use the DPM as provided bythe Depository in the ordinary course of its business as such User.Rule 4.1.5 A User shall not use or permit any other person to :-i. use the software provided by the Depository for any purposeother thanthe purpose as approved and specified by theDepository;ii. use the software provided by the Depository on any equipment otherthan the User Hardware System;iii. copy, alter, modify or make available to any other person, the softwareprovided by the Depository;iv. use the software in any manner other than the manner as may bespecified by the Depository;v. attempt directly/indirectly to decompile, disassemble or reverseengineer the same.Rule 9.2.1The Participant and the Participant which is a Clearing Corporation shall installthe hardware and software which shall be in conformity with the configurationsspecified by the Depository from time to time.Rule 9.2.2The Depository shall provide an application software called the DepositoryParticipant Module [DPM (DP)] to the Participant and an application software[ 383 ]
called the Depository Participant Clearing Corporation Module [DPM(CC)] tothe Participant which is a Clearing Corporation, and any upgradations ormodifications to such software on payment of such fees as may be determinedby the Depository.Direct connectivity of DPM System with the Back Office System of the ParticipantCircular No.<strong>NSDL</strong>/POLICY/2010/0072Date: June 30, 2010Sub: Daily Price file to include NAVs for Mutual Fund UnitsAs all Participants are aware, a facility is provided to Participants to downloadthe daily price file and NAV file for mutual fund units (security type “20”) fromthe intranet site of <strong>NSDL</strong> (i.e. http://sqlassist/) [Ref. : Circular no. <strong>NSDL</strong>/POLICY/2009/0068 dated August 1, 2009 and <strong>NSDL</strong>/POLICY/2009/0117 datedDecember 5, 2009]. From June 30, 2010 onwards, the ‘daily price file’ itselfwill contain NAVs for mutual fund units (security type “20”). This will facilitatethe Participants to use a single file (i.e. daily price file) instead of referring totwo separate files (i.e. daily price file and NAV file). There is no change in thefile format for the daily price file. For ease of reference, the file format ofprice file is enclosed as an Annexure.The NAV file for mutual fund units will also continue to be made availableseparately on the SQLassist till July 31, 2010.Circular No. Sub: Capturing mobile numbers with first digit as 6 or 7.<strong>NSDL</strong>/POLICY/As all Participants are aware, Participants were advised to capture the ten2010/0056digit mobile numbers given by their clients starting with “8” or “9” as the firstDate: May 21, 2010digit. (Ref.: Circular No. <strong>NSDL</strong>/POLICY/2008/0059 dated September 1, 2008 &Circular No.: <strong>NSDL</strong>/POLICY/2010/0010 dated January 28, 2010). Consideringthat mobile companies have also started allotting mobile numbers with either“6” or “7” as the first digit, Participants are hereby informed that they cannow capture in the DPM system ten digit mobile numbers starting with “6” or“7” also as the first digit.Accordingly, necessary changes made in point no. (I) (3) (d) and (11.5) of theMaster Circular No. <strong>NSDL</strong>/POLICY/2009/0029 dated April 16, 2009 for accountopening are highlighted and are enclosed at Annexure.Annexure(I)Guidelines in respect of account opening in case of individuals (Non-Body Corporates)(1) Individuals, Karta of HUF, Partners in case of Partnership firm,Guardian in case of minor account(3) Mode of capturing the details in the DPM System(a)The Participant should enter the details of the Client as mentionedin the Account Opening Form, in the DPM System after verifyingwith the POI and Proof of Address. It may be mentioned thatParticipants can avail the facility of Bulk Verify and Release withrespect to opening of Client accounts in the DPM System (<strong>NSDL</strong>/PI/2007/0019 dated April 4, 2007).[ 384 ]
(b)(c)(d)(e)(f)The Participant should capture the Client’s signature(s) as givenin the Account Opening Form in the DPM System.For ease of data entry, the Standing Instruction indicator in theDPM System would be in an enabled status with respect to alltypes of Client accounts except for accounts with sub-type “DR”at the time of opening depository accounts. For those Clientswho have not opted for Standing Instructions, the Participantshould disable the Standing Instruction indicator in the DPMSystem.For ease of data entry, the SMS flag of the account holder willautomatically get enabled in the DPM System after the Participantcaptures the mobile number (Participants are advised to strictlycapture the ten digit mobile number with the first digit as “6” /“7” / “8” / “9”) of the respective account holders at the time ofopening of depository accounts. If the Client submits the mobilenumber but does not wish to opt for the SMS Alert facility, theParticipant should capture the mobile number in the DPM Systemand disable the SMS flag either from the front end of the DPMSystem or through back office file import (<strong>NSDL</strong>/POLICY/2008/0059 dated September 1, 2008 & <strong>NSDL</strong>/POLICY/2010/0010 datedJanuary 28, 2010).The Participant should save the details and enter the Clientaccount number (Client ID) generated by DPM System in theAccount Opening Form.The Participant should print the Client Master Report and give itto the Client alongwith a copy of the Agreement. Such informationshould be provided only after the account is in “Active” status inthe DPM System. (<strong>NSDL</strong>/PI/98/583 dated November 18, 1998).(11) Procedure for change in demographic details(11.5) Change in SMS flag and / or mobile numbers:(i)(ii)(iii)(iv)Participant must obtain a written request from the Client forchange in mobile number and/or SMS flag.For joint holdings, the written request must be signed by theholder whose mobile number and / or SMS flag is being changed.Participants are advised to strictly capture the ten digit mobilenumber with the first digit as “6” / “7” / “8” / “9” and/or updatethe SMS flag, as requested by the client.For ease of data entry, the SMS flag gets enabled automaticallyupon capture / modification of mobile numbers in DPM System.Thus, Participants must take due care at the time of modifyingmobile numbers in the DPM System, particularly for Clients whohave not opted for SMS alert facility. If the Client submits themobile number but does not wish to opt for the SMS Alert facility,[ 385 ]
the Participant should capture the mobile numbers in the DPMSystem and disable the SMS flag from front end of DPM System orthrough back office.Circular No.All Participants are hereby informed that the following Market Type Codes<strong>NSDL</strong>/POLICY/have been added in the CC Calendar at the request of Indian Clearing2009/0118 Corporation Limited (ICCL) pertaining to settlement for Indian Corporate DebtDate: December 7, 2009 Market (ICDM):Circular No.<strong>NSDL</strong>/POLICY/2009/0117Date: December 5, 2009Circular No.<strong>NSDL</strong>/POLICY/2009/0107Date: November 14,2009CC ID Market Type Code DescriptionIN001133 03 ICDM T+0IN001133 04 ICDM T+1IN001133 05 ICDM T+2Participants are requested to note the aforesaid code relating to change inthe static data for back-office batch interface with the DPM System.Sub: NAV file of Mutual Fund ISINsFurther to our Circular nos. <strong>NSDL</strong>/POLICY/2009/0107 dated November 14,2009 and <strong>NSDL</strong>/POLICY/2009/0068 dated August 1, 2009, all Participants arehereby informed that in view of addition of security type code '20' MutualFund Units (TRASE), a separate file of daily NAV of Mutual Fund ISINs (startingfrom November 30, 2009 till date and of subsequent dates) alongwith thedaily price file will be made available on intranet site of <strong>NSDL</strong> (i.e. http://sqlassist/) for downloading on a daily basis.The daily price file will be continued to be made available by 7.00 p.m. onthe same day whereas the daily NAV file will be made available by 11.00 a.m.on the next day on intranet site of <strong>NSDL</strong>.All fields in the daily NAV file will be delimited by (# |) characters. The fileformat is enclosed as Annexure A. Participants are requested to take note ofthe above so as to make necessary arrangements in their back offices.All Participants are hereby informed that the following Security Type Codehas been added in the DPM System:Security Type CodeDescription20 Mutual Fund Units (TRASE*)* Transaction processing, record keeping and settlement for mutual funds.Participants are requested to note the aforesaid code relating to change inthe static data for back-office batch interface with the DPM System.Circular No.Sub: Up-gradation of SQL Server<strong>NSDL</strong>/POLICY/As all Participants are aware, Microsoft has stopped mainstream support for2009/0104 SQL Server 2000 SP4 and SQL Server 2005 SP1. Further, <strong>NSDL</strong> is also in theDate: November 9, 2009 process of re-engineering the DPM & DM application and planning to conducta mock test so that the Participants are familiar with the same. This new DPMapplication requires SQL Server 2005.In view of the above, all Participants are advised to procure SQL Server 2008which has a provision to use SQL Server 2005 by November 30, 2009. Those[ 386 ]
Participants who have SQL Server 2005 or SQL Server 2008 may ignore thiscircular.Circular No.<strong>NSDL</strong>/POLICY/2009/0103Date: November 6, 2009Circular No.<strong>NSDL</strong>/POLICY/2009/0071Date: August 21, 2009All Participants are hereby informed that the following Security Type Codeshave been added in the DPM System:Security Type CodeDescription18 Rights Entitlement19 Indian Depository ReceiptsParticipants are requested to note the aforesaid code relating to change inthe static data for back-office batch interface with the DPM System.Direct connectivity of DPM System with the Back Office System of theParticipantAs all Participants are aware, for uploading of instructions / data on a batchmode basis, instructions / data are extracted from the back-office systemand manually transferred through external hardware such as compact disk(CD), pen drive, floppy etc, for onward upload into the DPM System.To facilitate ease of operations and for eliminating the manual efforts involvedin transferring the instructions / data from the Back Office System for onwardupload into the DPM System, Participants can, if they so desire, establish adirect connectivity between the DPM System and their Back Office System.DPM System and Back Office System may be located at the same place or atdifferent locations (inter or intra city in India). Similarly, facility is alsoavailable for Participants to establish direct connectivity between the DPMsystem and Client machine if both are located at different locations (inter orintra city in India).In this regard, Participants will be required to obtain prior approval of <strong>NSDL</strong>.For more information and documents to be submitted in this regard,Participants may contact the following officials:Name of the Person Contact Tel. No. Email addressMr. Sankalp Parlia (022) 2499 4451 sankalpp@nsdl.co.inMr. Sanjay Mirchandani (022) 2499 4454 sanjaym@nsdl.co.inMr. Manoj Mhatre (022) 2499 4452 manojmh@nsdl.co.inMr. Joshi Antony (022) 2499 4448 joshia@nsdl.co.inMr. Umesh Suvarna (022) 2499 4459 umeshs@nsdl.co.inMaster Circular on back office file formatsCircular No.<strong>NSDL</strong>/POLICY/2008/0054Date: August 9, 2008Sub : Master Circular on back office file formats for interface with DPMSystemAs all Depository Participants (DPs) are aware, <strong>NSDL</strong> has been augmentingand integrating various features in the DPM System. In this regard, back officefile formats relating to interface with the DPM system concerning varioussoftware version releases have been provided to DPs vide various circulars.All the file formats issued till Version 8.2 have now been consolidated into asingle one through a 'Master Circular'. An index is enclosed as Annexure I[ 387 ]
which highlights various types of back office file formats that are required tointerface with the DPM System for the purpose of import/exports of datainto/from the DPM system. DPs are requested to note that the softcopy ofupdated back office file formats would be available for download on Intranetsite of <strong>NSDL</strong> (http://sqlassist/back office file formats updated till Version8.2) with effect from August 18, 2008.The 'Master Circular' would facilitate DPs to design/configure back officeinterface with the DPM System.For any information/clarifications, DPs are requested to contact Mr. NileshPandit, Mr. Rakesh Mehta or Mr. Sharat Karnad on telephone numbers (022)2499 4601 to 4610.1 Master ExportsABCDEAnnexure IParticularsBusiness Partner Master ExportSecurity ISIN Master ExportClearing Corporation Calendar ExportAuto Corporate Action ExportCorporate Action Master Export2 Branch Master Import3 Client Master Exports and ImportsABCDEFClient Master ExportClient Signature ExportClient Master Creation ImportBulk Verify/Release Import - Client Verify Release Import CVRImportClient Master Modification ImportBulk Verify/Release Import - Client Master Modification4 DPM Transactions Imports5 Statement of Holding and Statement of Transaction Exports6 Change Orders for the Day Export (COD)7 Power of Attorney8 Static Data Codes9 SPEED-e file formatsDPs are requested to note that back office file formats would be available fordownload on Intranet site of <strong>NSDL</strong> (http://sqlassist/back office file formatsupdated till Version 8.2).[ 388 ]
Multi Protocol Label Switching (MPLS)Circular No.<strong>NSDL</strong>/POLICY/2009/0089Date: September 29,2009Sub: Auto fallback facility for MPLS users.All Participants are hereby informed that those Participants who haveestablished the Multi Protocol Label Switching (MPLS) connectivity with <strong>NSDL</strong>can avail of the ISDN auto fall back facility provided by the MPLS ServiceProvider.Benefits:1. No charges for availing auto fallback facility.2. If the primary MPLS connectivity fails, the ISDN would automaticallydial-out to the ISDN port in some other Point of Presence (POP) of theMPLS service provider. The tariff applicable will be that of the localcall charges and as per the scheme opted by the Participant for theISDN line. While PPP based manual dial-up connectivity to <strong>NSDL</strong>datacenter still remains available to Participant as a fallback optionand in case of router failure this would be the only option. AutomaticISDN dialout based fallback option does not require manual interventionand would help restore connections quickly.Pre-requisites:1. ISDN line is subscribed by the Participant, preferably from the serviceprovider other than the MPLS service provider. This is to ensure thatboth ISDN and MPLS are not rendered unusable if any failure isexperienced at service provider's equipment.2. ISDN BRI port on the router.3. Those Participants who are using WAN link Ethernet and Cisco routerare required to have 12.4 IOS (operating System) or SP IOS to establishISDN auto fallback. Those Participants using Serial WAN link can use theexisting IOS of Cisco Router.Procedure to avail the facility:1. Participants having MPLS as primary connectivity and also has ISDN lineand Router BRI port may confirm adherence to the above requirementsby sending an email to form-b@nsdl.co.in .2. Participants who have not yet subscribed for the ISDN line are requiredto subscribe for an ISDN line and upgrade / replace their router, if itdoes not have the ISDN BRI port and appropriate IOS version. Once theParticipant is ready, confirm to <strong>NSDL</strong> about adherence to requirementby sending an email to form-b@nsdl.co.in3. On receiving the confirmation, <strong>NSDL</strong> will inform the MPLS service providerand also send the configuration changes required for Participants routerthereby making their set-up ready to use this facility.For VSAT users, the present modality of fallback line remains unchanged.VSAT users will have to continue to use the dial-up fallback connection throughISDN or PPP.[ 389 ]
In case of any further information/ clarification is required, Participants maycontact Mr.Manoj Mhatre or Mr. Dhananjay Kolpe on 022-24994452 or 022-24994458.Circular No.<strong>NSDL</strong>/POLICY/2008/0086Date: December 29,2008Sub: Early surrender charges for surrender of VSATAs all Participants are aware, there is a charge for early surrender of VSATwhich is payable to National Stock Exchange of India Limited (NSE). In thiscontext, NSE has agreed not to levy early surrender charges to thoseParticipants who migrate to Multi Protocol Label Switching (MPLS) networkprovided the annual VSAT charges for the full financial year, as currentlyapplicable, are paid.Circular No.Sub: Multi Protocol Label Switching (MPLS) - Connectivity<strong>NSDL</strong>/POLICY/All Participants were informed vide Circular no. <strong>NSDL</strong>/POLICY/2008/0061 dated2008/0067 September 6, 2008 about MPLS. The service providers selected for <strong>NSDL</strong> MPLSDate: October 10, connectivity are TATA COMMUNICATIONS and TULIP TELECOM Ltd. Participants2008 have a choice to avail services from either of the service providers. TheParticipants also have an option of selecting both the service providers tomaintain redundancy. Further, the Participants have an option of Wireline orWireless connectivity for the last mile (subject to feasibility). The Tariff fordifferent bandwidth (64kbps to 2Mbps) is given in Annexure I.Besides offsetting the disadvantages of the existing setups, MPLS connectivitycombines certain distinct benefits of both present leased line and VSATnetworks. In addition, it also offers certain unique features which are notavailable in existing set-up. A set of such distinct advantages offered by MPLSconnectivity are mentioned below:1) Just as VSAT network, MPLS connectivity charge is distance independentand will be uniform across the country. Thus, it overcomes limitation ofpresent leased line connectivity where Intra-city (Mumbai & by thevirtue of Hierarchical network in Delhi) charges and Intercity chargesare different.2) Under MPLS network, the Participants will have a much better uptimeas <strong>NSDL</strong> is entering into service level agreement (SLA) for 99.5% uptimewith the service providers.3) Unlike VSAT network and present leased line network, MPLS networkoffers the option to upgrade the bandwidth for a temporary period of afew days with two weeks advance notice and then revert back to originalbandwidth. Under this arrangement, Participants pay for higherbandwidth only for this interim period of a few days. This facility canbe very useful if Participants are considering a large scale accountopening or such bandwidth intensive activity.4) Just as existing leased line network, the Participants connecting throughMPLS network will continue to have uninterrupted access to businesspartner email facility, direct access to SPEED-e, IDeAS, and PANverification, <strong>NSDL</strong> hosted internet facilities which are not available for[ 390 ]
VSAT connected Participants. MPLS connectivity offers a more robustseamless diversion of traffic to <strong>NSDL</strong> Disaster Recovery site (DRS) in theevent of disaster as compared to present Leased line and VSAT trafficdiversion where there is some dependency on <strong>NSDL</strong> primary productionsite.5) In case of MPLS primary connectivity failure, provision is available todial out using ISDN line to the service providers POP in the same citywith local call charges. This fallback is much simpler to activate ascompared to the PPP based dial-up connectivity to <strong>NSDL</strong> datacenterwhere certain technical expertise is necessary to setup configuration.VSAT users however will only have PPP option.Migration to IP VSAT requires Broker-Participants to procure Layer 3 switch(for dual use viz trading and depository service) and commit lock-in for aperiod of four years or forgo whole/part of the Rs. One lac deposit. Theincremental cost to use IP VSAT for depository function (Approx. Rs. 60,000)is almost the same for entry level MPLS connectivity (Rs. 65,000). Migrationto MPLS connectivity is a better option for Participants considering the benefitsmentioned above.Since MPLS connectivity provides for a seamless diversion of traffic to <strong>NSDL</strong>DRS by the service providers, <strong>NSDL</strong> will need to maintain present diversioninfrastructure only for remainder IP VSAT users. IP VSAT users will now alsobe levied certain annual charge by <strong>NSDL</strong> for the maintenance of thisinfrastructure. The charge will be finalised after clarity of number of VSATusers emerges.Since NSE has already informed that switchover to IP VSAT will be concludedby end of October 2008, those VSAT users who are desirous to opt for MPLSconnectivity must send written confirmation to <strong>NSDL</strong> helpdesk latest by 25thOctober 2008 so that <strong>NSDL</strong> can arrange for their migration on a priority basis.The Rollout of MPLS network will begin from first week of November 2008.The feasibility survey by MPLS service provider will be done for VSAT userswho have already given their confirmation for MPLS. Participants are requestedto extend necessary co-operation to the service providers in this regard.The present IP VSAT user Participants may note that in case they plan tocontinue with IP VSAT for dual use, then they must procure and install Layer3switch (as mentioned in <strong>NSDL</strong> circular <strong>NSDL</strong>/Policy/2008/0050 dated July 10,2008) and inform <strong>NSDL</strong> of the same by filing a revised Form B by 25th October,2008.For any queries / clarifications, please feel free to contact Mr. Umesh Suvarna(Asst. Vice President) on 2499 4459 or Mr. Manoj Mhatre (Sr. Manager) on 24994452.[ 391 ]
ANNEXURE -IMPLS TARIFFNo Bandwidth Annual Charges1 64 kbps Rs. 65,000/-2 128 kbps Rs. 75,000/-3 256 kbps Rs. 85,000/-4 512 kbps Rs. 1,15,000/-5 1 mbps Rs. 1,65,000/-6 2 mbps Rs. 2,50,000/-One Time Installation Cost :- Rs 11,000/-All above charges inclusive of TaxesCircular No.Sub: Migration to Multi Protocol Label Switching (MPLS)<strong>NSDL</strong>/POLICY/<strong>NSDL</strong>, vide its Circular no <strong>NSDL</strong>/POLICY/2008/0050 dated July 10, 2008 had2008/0061 informed all Depository Participants (DPs) about NSE initiated migration ofDate: September 6, its current X.25 VSAT network to an IP based VSAT network. Considering the2008 possible network security threats in IP network, NSE has decided to implementstringent network controls. DPs who plan to use VSAT for both trading as wellas depository operation were advised to procure CISCO layer 3 switch (Models: 3560 and 3750) to ensure segregation of DPM and trading network. <strong>NSDL</strong> hasas a measure to enable DPs to protect already made investment, decided toallow the use of layer 3 switches from manufacturers other than CISCO oncase to case basis on specific representation from DP. DPs intending to uselayer3 switch of other manufacturers are required to write to <strong>NSDL</strong> givingdetailed technical specifications and obtain necessary permission.At present DPs are allowed to establish primary connectivity with <strong>NSDL</strong> eitherthrough Point to Point Lease Line or NSE provided VSAT. While many DPs haveopted for Point to Point Leased Line, the cost of connectivity differs from DPto DP, due to the distance factor. Intercity circuits (outside Mumbai) andIntracity circuits (local circuits) are being charged differently. In order tobring in uniform cost structure across country and to ensure high availabilityof Network connectivity to <strong>NSDL</strong> primary and DRS site, <strong>NSDL</strong> is in process ofmigrating its present Leased Line network to Multi Protocol Label Switching(MPLS) technology. Under this implementation DPs will bear same cost forconnectivity irrespective of being located in Mumbai or other city. After adetailed evaluation, it is observed that MPLS option is cost effective, reliableand provides more redundancy. The migration process for the Leased Lineusers is expected to start from first week of November 2008. The exactschedule will be communicated after the detailed roll-out plan is finalised.Considering that MPLS network cost is comparable to that of VSAT and affordsdedicated bandwidth to DP unlike VSAT, <strong>NSDL</strong> is also extending this option topresent VSAT connected DPs. If VSAT connected DP exercise MPLS option thanthis will also be included in this roll out plan starting November 2008.Advantages of MPLS technology:[ 392 ]
Continuous availability of both Primary and Disaster recovery sites. Centralized manageability, single point of contact for service issues. Bandwidth on demand for last mile which is fully scalable. Uniform charges across country 24 hour email facility Network Uptime 99.5% In built redundancy in network connectivity. Highest redundancy levels to ensure no single point of failure. End-to-end assured network security. No need to procure additional Layer 3 switch if DP intends to surrenderVSAT and migrate to MPLS based network. Temporary upgrade of Bandwidth with 15 days notice is possible. Direct connectivity option to <strong>NSDL</strong>'s SPEED-e, STeADY and PANverification infrastructure<strong>NSDL</strong> is in the process of finalising two service providers for MPLS networkthus providing DPs a choice. Further DP's can also choose the connectivitymedium as Wired or Wireless connectivity. The charges for 64kbps MPLS VPNwill be approximately Rs.65,000/- per year (inclusive of Taxes). There wouldbe one time installation charge of approximately Rs 15,000/-. Thus overallcharge structure for various mode of connectivity compares as follows.Mode of Deposit One time Annual chargesConnectivity chargesExisting VSAT(X.25 Rs.2,00,000/- Rs.17,750/- Rs.1,50,000/-network)for all citiesNew VSAT Rs.1,00,000/- ___ Rs.1,00,000/-(IP network) for all cities **Point to Point ___ ___ Rs.75,000/- Minimum for64kbps Leaseline.Mumbai & Delhihierarchical networkuserFor other cities circuitscharge is Rs.36,500/- +MTNL actual chargewhich is higher than75,000/- P.A .MPLS 64kbps Nil Rs.15,000/- Rs.65,000/- for all cities** New VSAT charge structure for broker members is as per NSE website.Clarifications for charges payable by DP is awaited from NSE.Considering the benefits, <strong>NSDL</strong> intends to migrate mandatory all point topoint lease line users to MPLS network. There will be no additional capitalinvestment required from the DPs. The DP's will have an option for higherbandwidth such as 2 mbps. Such DPs will have to pay additional annual chargefor higher bandwidth. Based on the bandwidth choice indicated by the DP,<strong>NSDL</strong> will work out the charge structure with the service providers andcommunicate the same to DP's.[ 393 ]
While <strong>NSDL</strong> will continue to provide an option to connect through NSE VSATnetwork to DP's, it may be noted that on IP based new VSAT network of NSEdemands more stringent security controls. DPs will have to segregate networkthrough acquisition of layer3 switch (approximate cost ranges from Rs1.5Lacto Rs 2.0Lac) at its end. While <strong>NSDL</strong> helpdesk will endeavour to providetechnical support for DPs DPM system problem, due to stringent securityrelated restrictions some of the remote support techniques may have toundergo changes and flexibility available at present may not be feasible undernew VSAT network. Such restriction will however not apply to MPLS networkDP's who have connected to <strong>NSDL</strong> using VSAT and who wish to now shift toMPLS connectivity are requested to send their confirmation to <strong>NSDL</strong> helpdesklatest by September 15, 2008. Such DP's then will not be required to invest inlayer3 switch.For any queries / clarifications, please feel free to contact Mr. UmeshSuvarna (Asst. Vice President) on 2499 4459 or Mr. Manoj Mhatre (Manager)on 2499 4452.Circular No.Sub: Migration from X.25 protocol to TCP/IP<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that NSE vide its Circular2008/0050 no NSE/MEMB/10833 dated June 13, 2008 has intimated its members aboutDate: July 10, 2008 enhancing its current X.25 trading network to an IP based trading network.NSE's current Trading System uses the X.25 protocol over its terrestrial andsatellite based Wide Area Network (WAN). The new IP based satellite networkis now being implemented. NSE will replace the Indoor unit (IDUs) located atmember locations in a phased manner.As against the earlier Indoor unit which had two ports and DPs could use Port1 for NSE trading purposes and Port 2 for <strong>NSDL</strong> purposes, the new Indoor unitwill have only one Ethernet Port. As a measure of good practice to segregatetrading and depository traffic, <strong>NSDL</strong> & NSE have jointly worked out a designwhich requires common members who wishes to use VSAT for both depositoryand trading activity to install Layer3(L3) switch. However, DPs who are usingVSAT only for depository operation need not install L3 switch. Hence, DPswho wish to continue using the same VSAT for their Trading and Depositorydata traffic will be required to procure L3 switch.DPs who plan to use VSAT for both trading as well as depository operationmay procure any of the CISCO Layer 3 switch (Models : 3560 and 3750) for thispurpose. <strong>NSDL</strong> will provide details of DP end configuration in due course. DPsare required to note the following :1. Schedule for the migration of VSAT IDU will be undertaken as per theNSE plan for the migration. This will be informed to the DPs as soon asthe plan is communicated by NSE.2. DPs who plan to use VSAT for both trading and depository are requiredto have the L3 switch available at the time of migration. Unless the L3switch is ready and configured, <strong>NSDL</strong> connectivity cannot be established.3. Configuration of L3 switch and changes in the router configuration hasto be carried out by DP in the presence of their vendor engineer or askthe vendor to do it on their behalf. Any mistake / error in doing so willlead to longer duration dis-connection of the connectivity between DPsset-up and <strong>NSDL</strong> central system.4. Cost of the VSAT services will be as per the revised costing decided andcommunicated by NSE, from time to time.[ 394 ]
DPs are required to inform <strong>NSDL</strong> about the date for procurement of L3 Switchand submit Form B.For any clarifications / assistance in this regard, DPs may contact Mr. ManojMhatre or Mr.Dhananjay Kolpe on Tel. nos. 24994452 and 24994458.Circular No.Sub : Migration from Parallel Port Dongle to USB Dongle<strong>NSDL</strong>/POLICY/<strong>NSDL</strong> DPM Setup uses Dongle for secure storage of encryption keys used for2008/0043 secure data transmission between <strong>NSDL</strong> DM System and DPM System. AllDate: June 9, 2008 Depository Participants are hereby informed that <strong>NSDL</strong> has planned to replacethe current Parallel Port Dongle used in DPM Setup with USB Dongle.<strong>NSDL</strong> intends to migrate DPM Setup from Parallel Port dongle to USB Dongle ina phased manner in coming weeks. All DPM Setups will be migrated to USBDongle by the end of August 2008.The USB Dongle and the CD containing Software & Installation Manual wouldbe provided by <strong>NSDL</strong>. Installation of USB Dongle should be undertaken onlyafter obtaining appropriate technical guidance and clearance from <strong>NSDL</strong>Helpdesk. Subsequent to the installation of USB Dongle, Depository Participantsare advised to return back the Parallel Port Dongle to <strong>NSDL</strong>.For maintaining secure connectivity with <strong>NSDL</strong>, all the Depository Participantsare requested to kindly make note of the following points:1. For security reasons, it is advisable to connect the USB Dongles on tothe USB ports available on the rear side of DPM Server. In case of nonavailabilityof USB ports on the rear side of Server, the USB Donglesshould be connected to the front side of Server.2. In case of loss or faulty Dongle, the Depository Participant will not beable to establish application level connectivity with the <strong>NSDL</strong> DM System.In such an event, the Depository Participants will have to immediatelycontact <strong>NSDL</strong> Helpdesk and request for alternate mode of connection.EOD timing for ParticipantsCircular No.Sub: EOD timing for Participants - 8.30 pm on weekdays<strong>NSDL</strong>/POLICY/As all Participants are aware, End of the Day (EOD) for Participants commences2008/0068 at 8.00 pm on weekdays (Monday to Friday) and 4.30 pm on Saturdays.Date: October 10, Participants can verify/release instructions with the current execution date2008 until such time.All Participants are hereby informed that with effect from Monday October13, 2008, the EOD process at the DPM System will commence at 8.30 pminstead of 8.00 pm on weekdays. The DPM System will display "My businessend time 8.30 pm" on weekdays. Further, the EOD at DM will commence at9.00 pm on weekdays.Participants are requested to note that EOD for Saturday will be remainunchanged i.e. DPM System will display "My business end time 4.30 pm" andEOD at DM will commence at 5.00 pm.In case the DPM system does not display the aforesaid message i.e. "Mybusiness end time 8.30 pm" by 6.00 pm on October 13, 2008, Participantsare requested to contact helpdesk.Circular No.Sub: EOD timing for DPs - 8.00 pm on weekdays and 4.30 pm on Saturdays<strong>NSDL</strong>/POLICY/As all Depository Participants (DPs) are aware, End of the Day (EOD) for DPs2008/0038 commences at 7.30 pm on weekdays (Monday to Friday) and 4.00 pm onDate: May 30, 2008 Saturdays. DPs can verify/release instructions with the current executiondate until such time. In light of the increased transaction volumes, DPs arehereby informed that with effect from Monday June 2, 2008, the EOD processat the DPM System will commence at 8.00 pm instead of 7.30 pm on weekdays[ 395 ]
and at 4.30 pm instead of 4.00 pm on Saturdays. The DPM System will display"My business end time 8.00 pm" and "My business end time 4.30 pm" onweekdays and Saturdays respectively. Further, the EOD at DM will commenceat 8.30 pm on weekdays and 5.00 pm on Saturdays.In case the DPM system does not display the aforesaid message i.e. "My businessend time 8.00 pm" by 6.00 pm on June 2, 2008, DPs are requested to contacthelpdesk.Version Releases and FeaturesCircular No.Sub: Release of DPM System Version 13.0 - Back-office batch interface<strong>NSDL</strong>/POLICY/with the DPM System for conversion of Mutual Fund Units enabled2010/0081 Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2010/Date: July 16, 2010 0069 dated June 25, 2010 regarding release of DPM System Version 13.0 whereinfacility to convert Mutual Fund units [represented by Statement of Account(SoA)] into dematerialized form through DPM System was provided. DPM SystemVersion Release 13.0 enabled Participants to initiate conversion requests throughthe front end application of DPM System with effect from July 3, 2010.Participants were also requested to make necessary changes to their backoffice by July 11, 2010 as per the file formats enclosed in the aforesaid circular.All Participants are hereby informed that back-office batch interface with theDPM System for uploading conversion requests in respect of mutual fund units(security type code ‘20’) will be enabled with effect from Saturday July 17,2010.Circular No.Sub: Release of DPM System Version 13.0 – Redemption of Mutual Fund<strong>NSDL</strong>/POLICY/units through new module2010/0077 All Participants are hereby informed that DPM System Version 13.0 will beDate: July 2, 2010 released on July 3, 2010. This will enable Participants to capture instructionsfor redemption of Mutual Fund (MF) units (security type code ‘20’) using newmodule in the DPM System. For back-office file formats batch interface withthe DPM System, the existing file formats (available at <strong>NSDL</strong> SQLASSIST) willbe applicable. The mode of uploading batch files through DPM server i.e.,through ‘DPM Transaction Import’ will also be the same as currently applicable.Further, uploaded instructions can be viewed from the new module of theDPM System. The existing ‘Rematerialization / Repurchase’ module of theDPM System will continue to facilitate execution of instructions for ISINs otherthan those of MF units (security type code ‘20’).Participants are requested to take note that as this module will also beavailable in new DPM System, file formats in respect of the new DPM Systemfor redemption of MF units are enclosed at Annexure A.Circular No.Sub: Release of DPM System Version 13.0 - Conversion of Mutual Fund<strong>NSDL</strong>/POLICY/units represented by Statement of Account through DPM System.2010/0069 Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2010/Date: June 25, 2010 0024 dated March 9, 2010 regarding conversion of existing Mutual Fund unitsrepresented by Statement of Account (SoA) into dematerialised form throughAsset Management Company / Registrar and Transfer Agent.All Participants are hereby informed that Version 13.0 of the DPM System isscheduled for release on July 3, 2010 which will enable Participants to initiaterequest for conversion of Mutual Fund units represented by SoA intodematerialized form through DPM System. Participants will be able to initiateconversion request through the front end application of DPM System fromJuly 3, 2010. Further, back-office batch interface with the DPM System will[ 396 ]
e enabled by fourth week of July 2010. File formats in respect of the backofficebatch interface with the DPM System are enclosed at Annexure A.Further, the rejection codes and descriptions are enclosed at Annexure B.Participants are requested to note that the enclosed file formats will also beapplicable for new DPM System. In brief, Participants can use the same fileformats for uploading aforesaid instructions in the existing as well as newDPM System.However, Participants may note that in the existing DPM system for backoffice interface with the DPM System, there is a minor change with respectto Transaction Statement Export and Change Order of the Day Export, whichhave been highlighted (in red).Participants are advised to make necessary changes to their back office asper the enclosed file formats by Saturday July 11, 2010.DPM System upgrade Version 13.0 will be provided in the SQLASSIST intranetsite of <strong>NSDL</strong> (http://sqlassist) on Friday July 2, 2010 and the same should bedownloaded from the SQLASSIST intranet site and installed in the DPM serverby Saturday, July 3, 2010.Participants may note that with respect to release of Version 12.1 (referCircular No. <strong>NSDL</strong>/POLICY/2010/0068 dated June 24, 2010), no separatecompact disk or utility will be provided for version upgradation as the featureis already inbuilt in the DPM System, which will be enabled by <strong>NSDL</strong> on June26, 2010.DPM System(Annexure A)DPM Transaction ImportHeader RecordDescription Data Type Size End Status RemarksBatch Number Integer 8 8 MRecord Type Integer 2 10 M Header Record (01)Branch Code Character 6 16 M Default ‘000000’DP Id Character 8 24 MDP Role Integer 2 26 MTotal number of Integer 6 32 MDetail RecordsSender Date Date 8 40 MSender User Id Character 8 48 O Not in useFiller Character 2 50 O Not in useDemat(901)Description Data Type Size End Status RemarksBatch Number (*1) Integer 8 8 MRecord Type (*2) Integer 2 10 M Detail Record (02)Line Number Integer 6 16 MTransaction Type Integer 3 19 M List given belowTransaction Flag Character 1 20 M It should be ‘A’ forall ordersFiller Character 14 34 O Not in UseClient Id Integer 8 42 MISIN Character 12 54 M[ 397 ]
Quantity Decimal 18 72 M 15+3 withoutdecimal pointFiller Character 83 155 O Not in UseInternal Reference Character 35 190 O RemarksNumber/Remarks(*3)Sender Reference Character 50 240 ONumber 1 (*4)Sender Reference Character 50 290 ONumber 2 (*5)Folio Number Character 20 310 Mandatory only whenMF indicator is M.Space otherwise.Mutual Fund Character 1 311 ‘M’ or space.IndicatorM for MF ISINSpace for other ISINsNumber of SOA Character 3 314 Mandatory only whenMF indicator is M.Space otherwiseFiller Character 36 350 O Not in use.§ *1 : First digit of the batch number should be zero.e.g. If the batch number is 9000147 then it should appear as 09000147§ *2 : First digit of the Line Number should be zero.e.g. If the Line Number is 90014 then it should appear as 090014§ *3 : Spaces should be followed after values are enterede.g. If the value in the Internal Reference Number is “Conversion ofunits” then it should be appear as “Conversion of units”§ *4 : Spaces should be followed after values are enterede.g. If the value in the Sender Reference Number 1 is “Conversion ofunits” then it should be appear as “Conversion of units”§ *5 : Spaces should be followed after values are enterede.g. If the value in the Sender Reference Number 2 is “Conversion ofunits” then it should be appear as “Conversion of units”Description Data Type Size End Status RemarksBatch Number Integer 8 8 MRecord Type Integer 2 10 M Trailer Record (99)Branch Code Character 6 16 M Default ‘000000’DEMAT/Conversion Decimal 18 34 O 15+3 withoutof Units Instructiondecimal pointTotal QtyREMAT Decimal 18 52 O 15+3 withoutdecimal pointFiller Character 15 67 O Not in UseDFP Instruction Decimal 18 85 O 15+3 withoutTotal Qtydecimal pointRFP Instruction Decimal 18 103 O 15+3 withoutTotal Qtydecimal point[ 398 ]
Delivery Out Decimal 18 121 O 15+3 withoutInstructiondecimal pointTotal QtyInter Settlement Decimal 18 139 O 15+3 withoutInstructiondecimal pointTotal QtyPledge Instruction Decimal 18 157 O 15+3 withoutTotal Qtydecimal pointHypothecation Decimal 18 175 O 15+3 withoutInstructiondecimal pointTotal QtyPledge Invocation Decimal 18 193 O 15+3 withoutInstructiondecimal pointTotal QtyPledge Closure Decimal 18 211 O 15+3 withoutInstructiondecimal pointTotal QtyIrreversible Decimal 18 229 O 15+3 withoutDelivery Outdecimal pointTotal QtyPool-Pool Decimal 18 247 O 15+3 withoutAccount Transferdecimal pointTotal QtyInter Depository Decimal 18 265 O 15+3 withoutDelivery Qtydecimal pointInter Depository Decimal 18 283 O 15+3 withoutReceipt Qtydecimal pointCM pool Delivery Decimal 18 301 O 15+3 withoutQtydecimal pointCM pool Receipt Decimal 18 319 O 15+3 withoutQtydecimal pointQty (For future Decimal 18 337 O 15+3 withoutuse)decimal pointRepurchase Decimal 18 355 O 15+3 withoutInstructiondecimal pointTotal QtyFreeze Decimal 18 373 O 15+3 withoutInstructiondecimal pointTotal QtyUnfreeze Decimal 18 391 O 15+3 withoutInstructiondecimal pointTotal QtyPledge Decimal 18 409 O 15+3 withoutConfirmationdecimal pointHypothecation Decimal 18 427 O 15+3 withoutInvocationdecimal pointConfirmationPledge Closure Decimal 18 445 O 15+3 withoutConfirmationdecimal pointFiller Character 30 475 O Not in UseGrand Total of Decimal 18 493 M 15+3 withoutQtydecimal point[ 399 ]
Transaction Statement ExportFile FormatRecord Record Record RemarksType Identifier lengthHeader ‘01’ 150 One (First) record per fileDetail ‘02’ 224 Second record onwards, multiple per file.Record FormatHeader RecordDescription Data Type Size End Status RemarksRecord Type Integer 2 2 M Header Record (01)DP Id Character 8 10 M DP’s own DP IDStatement From Date Date 8 18 M It is a BusinessDateStatement To Date Date 8 26 M It is a BusinessDateStatement Preparation Date 8 34 M System DateDateStatement Preparation Time 6 40 M System TimeTimeTotal number of Detail Integer 9 49 M Total Number ofRecordsRecords in theexported file.Maximum can be99,99,99,999recordsClient ID From Integer 8 57 O From Client ID. Ifnot provided asinput parameter, itwill be all ZerosClient ID To Integer 8 65 O To Client ID. If notprovided as inputparameter, it willbe all ZerosFiller Character 85 150 O Not in useDetail RecordDescription Data Type Size End Status RemarksRecord Type Integer 2 2 M Detail Record (02)Line Number Integer 9 11 MBranch Code Character 6 17 MBeneficiary Account Integer 8 25 MNumberBeneficiary Category Integer 2 27 M List given belowBooking Date Date 8 35 MISIN Character 12 47 MBeneficiary Account Integer 2 49 M List given belowTypeDebit/Credit Indicator Character 1 50 M C - Credit,D – Debit[ 400 ]
Positions Booked Decimal 15 65 M 12+3 Formatwithout decimalpointBooking Narration Integer 3 68 M List given belowCodeBooking Type Integer 2 70 M List given belowClearing Corporation Id Character 8 78 O Applicable forClearing Member(CM)Market Type Integer 2 80 O Applicable for CM(List given below)/Freeze/UnfreezeReason CodeSettlement Number Character 7 87 O Applicable for CMBlock/Lock Flag Character 1 88 M L-Lock, B-Block,F-Free PositionBlock/Lock Code Integer 2 90 O 00 in case of Free(List given below)Lock-in Release Date Date 8 98 OCounter DP Id/Other Character 8 106 O Mandatory CounterDepository IDDP Id for Pledge/SLB transactions;Mandatory OtherDepository Id forInter DepositorytransactionsCounter Beneficiary Id Integer 8 114 O In case of accounttransfer (DFP/RFP),the beneficiaryaccount number willbe exported for nonCM clients only.DPM Transaction Integer 9 123 MReference NumberDM Transaction Integer 9 132 O RFP referenceReference Numbernumber/Freezeorder number forUnfreeze Order(Booking NarrationCode 232)Internal Reference Character 20 152 O Freeze/UnfreezeNumber/RemarksDescription in caseof Freeze/UnfreezeOrdersTransaction Creation Character 14 166 M Transaction recordedDate & Timedate and time inYYYYMMDDhhmmssFormat[ 401 ]
Counter CM-BP Id Character 8 174 O Only in case of CM,BP Id of CM will beexported for DFP/RFPs and for cm poolto cm pool instrRejection Reason1 Integer 4 178 O For DEMAT/Conversion of Units& REMATRejection Reason2 Integer 4 182 O For DEMAT/Conversion of Units& REMATRejection Reason3 Integer 4 186 O For DEMAT/Conversion of Units& REMATRejection Reason4 Integer 4 190 O For DEMAT/Conversion of Units& REMATOther Client Code Character 16 206 M Applicable only forInter DepositoryOther Settlement Integer 13 219 M Applicable only forDetailsInter DepositoryFiller Character 9 228 OBookingNarration Code Description11 DEMAT Initial Booking12 Credit for DEMAT13 DEMAT Rejection Booking14 DEMAT Rejection Booking due to ACA21 REMAT Initial Booking22 Debit for REMAT23 REMAT Rejection Booking24 REMAT Rejection Booking due to ACA31 Debit for Delivery to Client32 Credit for Receipt from Client33 Debit for Delivery to Client34 Credit for Receipt from Client41 Inter Transfer Initial Delivery Booking42 Debit for Delivery to Client43 Inter Transfer Rejection Delivery Booking44 Credit for Receipt from Client51 Delivery Out Initial Booking52 Debit for Delivery for Settlement Number53 Delivery Out Rejection Booking54 Delivery Out Initial Booking55 Delivery Out Acknowledgement Booking56 Delivery Out Rejection Booking57 Delivery Out Cancellation Booking[ 402 ]
61 Receipt In Initial Booking62 Credit for Receipt for Settlement Number71 Inter Settlement Transfer Source72 Inter Settlement Transfer Target73 Inter Settlement Initial Booking74 Inter Settlement Acceptance Booking75 Inter Settlement Rejection Booking76 Inter Settlement Final Booking80 Credit for CA - DO81 Credit for CA - Freeze82 Credit for CA83 Debit for CA85 Credit for IPO86 Credit for CA - CM87 Dedit for CA - CM88 Credit for CA-Pledge89 Debit for CA-Pledge90 Debit for CA - DO91 Pledgor Initial92 Pledgor Reject/Closure93 Pledgor Invocation94 Pledgee Invocation95 Pledgor Reject/Closure due to ACA96 Debit for CA - Lend97 Credit for CA - Lend98 Lend Confirmation - Rejection due to ACA99 Lend Ack - Rejection due to ACA101 Release of Locked In Positions102 Release of Locked In Pledge Positions103 Release of Locked In REMAT Positions111 Pool to Pool Transfer Initial Delivery Booking112 Debit for Delivery to Client113 Pool to Pool Transfer Rejection Delivery Booking114 Credit for Receipt from Client121 <strong>NSDL</strong> Transfer Initial Delivery122 <strong>NSDL</strong> Confirmation Delivery123 <strong>NSDL</strong> Transfer Rejection Delivery124 <strong>NSDL</strong> Confirmation Receipt125 <strong>NSDL</strong> Transfer Delivery Booking131 Internal Suspense Reversal151 Lend Initial152 Lend Ack. - Acceptance153 Lend Ack. - Rejection154 Lend Confirmation - Int155 Lend Confirmation - Acceptance156 Lend Confirmation - Rejection[ 403 ]
157 Lend Initiation161 SLB Confirmation - Initial162 SLB Confirmation - Acceptance163 SLB Confirmation - Rejection164 SLB Confirmation165 Borrow Confirmation171 SLB Closure - Initial172 SLB Closure - Acceptance173 SLB Closure - Rejection174 SLB Closure175 Lend/Borrow Recall Confirmation181 Int-CM Confirmation - Initial182 Int-CM Confirmation - Acceptance183 Int-CM Confirmation - Rejection184 Int-CM Confirmation185 Borrow Confirmation191 Int-CM Closure - Initial192 Int-CM Closure - Acceptance193 Int-CM Closure - Rejection194 Int-CM Closure195 Borrow Recall Confirmation201 Inter Depository Transfer Initial Delivery Booking202 Debit for Delivery to Client203 Inter Depository Transfer Rejection Delivery Booking204 Credit for Receipt from Client211 CM Pool Transfer Initial Delivery Booking212 Debit for Delivery to Client213 CM Pool Transfer Rejection Delivery Booking214 Credit for Receipt from Client223 DDO Initial Booking224 DDO Rejection/Cancellation Booking231 Freeze Booking232 Unfreeze Booking233 Credit for Freeze due to ACA251 Conversion of units represented by SOA - Initial Booking252 Credit for Conversion of units represented by SOA253 Conversion of units represented by SOA - Rejection Booking254 Conversion of units represented by SOA - Rejection Bookingdue to ACABooking Type Description11 Free12 Block13 Lock-In14 Released Block15 Released Lock-In[ 404 ]
Changed orders for the day (COD) ExportHeader RecordDescription Data Type Size End Status RemarksRecord Type Integer 2 2 M Header Record (01)DP Id Character 8 10 MExport Type Char 1 11 M I – IncrementalF – FullStatement Business Date 8 19 M Business dateDateLast Export Date From Date 8 27 O Mandatory if ExportType is “I”Last Export Time From Time 6 33 O Mandatory if ExportType is “I”Last Export Date To Date 8 41 O Mandatory if ExportType is “I”Last Export Time To Time 6 47 O Mandatory if ExportType is “I”Statement Preparation Date 8 55 M System DateDateStatement Preparation Time 6 61 M System TimeTimeTotal number of Detail Integer 9 70 MRecordsFiller Character 59 129 O Not in useDetail Record (900 to 911; 913; 914, 915; 920 to 924; 927,930,931)Description Data Type Size End Status RemarksRecord Type Integer 2 2 M Detail Record (02)Line Number Integer 9 11 MBranch Code Character 6 17 MTransaction Type Integer 3 20 MTransaction No. Integer 9 29 M Transaction numberof DPM. For Lock-inRelease (923), it willbe lock-in releasecode. For CA (921/922), it will be DMRequest IDOrder Status from Integer 2 31 M Not Applicable for 923Order Status to Integer 2 33 MStatus change user Character 8 41 M Login id of userCancellation Status Integer 2 43 M Not Applicable forfrom 920, 921, 922,923Cancellation Status to Integer 2 45 M Not Applicable for920, 921, 922,923Status change date Date time 14 59 M System date timetime[ 405 ]
Original Order Integer 7 66 O Used for pledgeReference Numberclosure, pledgeUnique Id for 914,915invocation, closureconfirmation andinvocationconfirmation. Alsoused for SLB – Lendand BorrowClient Id Integer 8 74 MISIN Character 12 86 MQuantity Decimal 15 101 M 12+3 withoutdecimal point (formanual andautomatic DeliveryOut, quantityexecuted, i.e. sentto DM and for DFP/RFP (904/905),quantity executed.)Lock-in Reason Code Integer 2 103 O Not Applicable for920,924Lock-in Release Date Date 8 111 O Not Applicable for(YYYYMMDD)920,924 For SLBTransactions it isexecution dateMarket Type Integer 2 113 O Mandatory for 922Settlement Number Character 7 120 O Mandatory for 922Execution Date/ Date 8 128 O Execution date forClosure Dateaccount transfer/DO(YYYYMMDD)/Corporate Action/inter settlement,Closure Date forPledging andHypothecation(Pledgor, Pledgee)and SLBOther Branch code Character 6 134 O Not in UseOther DP Id/Related Character 8 142 O Applicable in case ofDP IdDFP/RFP/Pledge/SLB. Related DP Idfor <strong>NSDL</strong> transferinstructionFor SLB IntermediaryDP IDOther Client Id/No. Integer 8 150 O Applicable in case ofof certificatesDFP/RFP/Intratransfer/Pledge/DEMAT/ REMAT/For SLB IntermediaryClntId.Beneficiary Account Integer 2 152 O Mandatory for 922Category[ 406 ]
Other CM BP Id Character 8 160 O Only for DFP/RFPsubject to other a/cis of CMOther Market Type Integer 2 162 O Applicable in case ofInter SettlementtransferOther Settlement Character 7 169 O Applicable in case ofNumberInter SettlementtransferInternal Reference Character 20 189 O User Remarks.Number/RemarksAgreement No. Character 20 209 O Mandatory forpledge/SLBinstructionQuantity Ordered Integer 15 224 O Applicable only for(as stated in the DFP/RFP (904/905)order, may not beand manual/executed)automatic deliveryoutRejection Reason Integer 4 228 O Applicable Only forCode 1DEMAT / Conversionof Units / REMAT /pledge instructionsRejection Reason Integer 4 232 O Applicable Only forCode 2DEMAT / Conversionof Units / REMAT /pledge instructionsRejection Reason Integer 4 236 O Applicable Only forCode 3DEMAT / Conversionof Units / REMAT /pledge instructionsRejection Reason Integer 4 240 O Applicable Only forCode 4DEMAT / Conversionof Units / REMAT /pledge instructionsClosure Type Character 1 241 O Mandatory for 911Execution Date for Date 8 249 M (YYYYMMDD)908,909,910,911Mutual Fund Indicator Character 1 250 O ‘M’ or space.M for MF ISINSpace for otherISINs.Folio Number Character 20 270 O Mandatory only whenMF indicator is M.Space otherwise.Number of SOA Character 3 273 O Mandatory only whenMF indicator is M.Space otherwiseFiller Character 189 462 O Not In Use[ 407 ]
Annexure BRejection reason code and description: Conversion of Mutual Fund Unitsrepresented by Statement of Account into dematerialized formCode Code Description1 Signature mismatch2 Signature of the 1st/2nd/3rd holder(s) not present3 Rejected due to ACA4 Unit statement already dematted5 Incorrect Holder(s) name / Pattern6 Unit statement details mismatch7 CRF sent to incorrect registrar8 Unit Statement(s) not received within 30 days9 Court injunction pending10 Conv. of units request initiated under wrong ISIN11 Units recd not available for Conversion of units12 Mismatch between Unit qty received and CRF qty13 RTA Unit stmt recd instead of AMC Unit stmt14 Transposition Form not submitted15 Transmission Form/Death Certificate not submitted16 Investor request for rejection and a/c closure17 Units under lien/Stop Transfer18 Changes in DP ID/Client ID on CRF not authorized19 Mismatch of DP ID/ Client ID on CRF20 CRF not signed/ stamped by DP21 Miscellaneous22 Requested units are already redeemed23 Unit statement not enclosed with CRFCircular No.Sub: Release of DPM System Version 12.1 - Redemption of Mutual Fund<strong>NSDL</strong>/POLICY/units through DPM System.2010/0068 All Participants are hereby informed that Version 12.1 of the DPM System isDate: June 24, 2010 scheduled for release on Saturday, June 26, 2010 enhancing the Redemption/ Repurchase module to facilitate Participants to initiate instructions forredemption of Mutual Fund Units (security type 20) held in dematerialisedform. Participants are requested to be guided by Rule 11.3 of the <strong>NSDL</strong> BusinessRules.For back-office batch interface with the DPM System, Participants arerequested to refer to the existing file formats available at <strong>NSDL</strong> SQLASSIST.Circular No. Sub: Additional features -Release of DPM System Version 12.0<strong>NSDL</strong>/POLICY/ In continuation of our Circular No. <strong>NSDL</strong>/POLICY/2010/0032 dated March 27,2010/0036 2010, Participants are hereby informed that in addition to the featuresDate: April 8, 2010 mentioned in the aforesaid circular, the following features are also includedin the DPM System Version 12.0. :(I) Change of name in Corporate Accounts – more sub-types included:Facility to carry out change of name in corporate accounts for Clienttypes [viz., Body-Corporate, Bank, Financial Institution (FI), ForeignInstitutional Investors (FII), Mutual Fund (MF), Trust] was provided inDPM System Version 9.0 (refer Circular No. <strong>NSDL</strong>/POLICY/2008/0085dated December 16, 2008 for list of Client Types and Sub-types). Inthis regard, following additional Sub-Types have been included in thelist with respect to Client Type – Body Corporate, as given below:[ 408 ]
TypeBody CorporateSub-TypeForeign Venture CapitalDomestic-DRLimited Liability PartnershipLimited Liability Partnership-DR(2) Incorporation of agreement number in Pledge Master Report:Based on the feedback received from Participants, agreement numberhas been incorporated in the pledge master report.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inCircular No. Sub: Release of DPM System Version 12.0<strong>NSDL</strong>/POLICY/All Participants are hereby informed that DPM System Version 12.0 is scheduled2010/0032 for release on Saturday, April 3, 2010. Salient features of DPM System VersionDate: March 27, 2010 12.0 are provided in Annexure A. Compact Discs (CD) containing DPM SystemVersion 12.0 and instructions regarding upgradation will be sent to Participantsby courier separately. Participants will receive the CDs tentatively by March31, 2010.CD containing DPM System Version 12.0 should be installed in the DPM serveronly on Saturday, April 3, 2010.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inAnnexure A1. Facility to print Transaction Statement / Statement of Holding byincluding / excluding specified Clients IDs :Facility to print Transaction Statement / Statement of Holding byincluding / excluding specified Clients IDs is being provided from thefront end application of the DPM system. In this regard, Participants arerequested to follow the below given procedure:(i) Install the DPM System Version 12.0 CD in DPM server. Uponsuccessful installation, a folder named SOT/SOH would be createdin ‘C’ drive of the DPM server.(ii) Create group names and corresponding Client IDs in a notepad.The notepad containing the group names and the Client IDs shouldbe separated using tilt (~). The header details of the notepad shouldcontain the DP ID and number of records that are being uploaded.File format in this regard, is enclosed at Annexure B. Sample notepadis exhibited below for your reference:[ 409 ]
(iii) Save the notepad in the SOT/SOH folder. The name of the notepadshould be Clntlist.txt .Double click on the ‘Upload_List.bat. Upondoing so, Client details will get uploaded in the DPM server.(iv)Group details that have got successfully uploaded in the DPM servercan be viewed under the field ‘Group’ as exhibited below. At thetime of printing Transaction Statement / Statement of Holding(SOH), you will have the ability to include / exclude specified group(containing corresponding Client IDs). For this purpose, select thegroup name(s) from the field ‘Group’ and required option in ‘SelectGroup’. Further, other selection criteria’s viz., ‘Clients havingTransactions’, ‘Order by Pin Code’ etc., as exhibited below can beused while printing the Transaction Statement / SOH.(v) As subsequent records uploaded may overwrite the existing details,the existing notepad may be used to append / delete the records,in case fresh records are required to be created or existing recordsare to be deleted. Alternatively, prepare a notepad that retainsthe existing records (that you wish to retain) and add / delete therecords of your choice in the same notepad. Thereafter, follow theprocedure mentioned in point no. (1) (iii).2. Facility to navigate delivery-out instructions:Facility to navigate instructions in the delivery-out screen is beingprovided in the front end application of the DPM System. Upon making asearch on any of the available fields/radio buttons viz., status of theinstructions, execution date, CC ID, ISIN etc., the screen would displaya grid containing the output i.e., instruction details with respect to theprovided input parameters. Upon clicking a specific instruction or onclicking ‘OK’ button, a navigator would be displayed to facilitatenavigation of instructions as exhibited below:[ 410 ]
3. Display of ISINs of Mutual Fund (activated under security type code20) in the transaction statement:Post version release, the transaction statement will display thetransactions / holdings of ISINs in the following order:(i) Transactions and balances of non mutual fund based ISINs viz.,equity, commodity, debentures, certificate of deposits etc.(ii) Transactions and balances of mutual fund based ISINs (activatedunder security type code 20).(iii) Holdings of non mutual fund based ISINs (example given above)where no transactions have been executed.(iv) Holdings of mutual fund based ISINs (activated under security typecode 20) where no transactions have been executed.4. *.out and *.prn files to also display the date and time for DPMtransaction import:Currently, upon uploading the batches into DPM server through DPMtransaction import, ‘.out’ file (response file) and ‘.prn’ file [(details ofrejected records (if any)], are generated. The file names of ‘.out’ and‘.prn’ file are same as uploaded in the DPM server. Post version release,date and time will also be displayed along with the file name on ‘.out’and ‘.prn’ files for files uploaded through DPM transaction import. Thedisplay format would be ‘filename_yyyymmddhhmmss’. Example; if thebatch file (generated from the back office and uploaded in the DPMServer) is named as batch1.txt, the ‘.out’ file and ‘.prn’ file generatedwill be named as ‘batch1_20100303215320.out’ and‘batch1_20100303215320.prn’ respectively.The date and time displayed on the file will facilitate in distinguishingthe batches uploaded at various intervals and avoid overwriting of theprevious ‘.out’ and ‘.prn’ file in case the name of the batch file uploadedis identical.Impact on Back office : Yes.5. Facility to validate PAN structure of Body-Corporate and TrustAccounts:Facility to validate PAN structure for Client Types viz., Body-Corporateand Trust accounts is being provided. Following validations will be carriedout at the time of opening Body Corporate / Trust accounts or modifyingthe demographic details in these accounts: Length of PAN should be of 10 characters.First five and the tenth character of PAN should be capital letter(between ‘A’ to Z’). Fourth character should be a capital letter ‘C’ in case of Body-Corporate account and ‘T’ in case of Trust account. Sixth to Ninth characters should be numeric (between ‘0’ and ‘9’).(i) Operating DPM System through front end application :(a) At the time of opening new accounts for Client typesviz., Body-Corporate / Trust in the Client MaintenanceModule, a warning message will be displayed if PANcaptured in these accounts are having invalid PAN[ 411 ]
structure. Similar warning message will also be displayedwhile modifying PAN in the existing Body-Corporate /Trust account or modifying demographic details / anyother details in these accounts such as bank accountname, number etc., and such accounts have invalid PANstructure.(b) Warning messages will be displayed at both stages i.e.,Capture as well as Verify & Release in the Client Creationand Client Modification Screen if the account has aninvalid PAN structure.(c) Participants may either modify PAN or override thewarning and continue to capture / verify & release theinstruction.(ii) Back office Interface with the DPM Server:a) PAN structure validation will be implemented in followingBack Office interfaces :(i) Client Master Creation Import(ii) Client Modification Import(iii) PAN and PAN Flag modification Importb) In case of invalid PAN structure, a warning message willbe generated in the error file (i.e. ‘.prn’ file) for everyinvalid PAN structure in Client account. However, norecord will be rejected for this reason.c) Participant may update the invalid PAN or cancel theserecords through front end application of the DPM Systembefore releasing the instructions in the DPM System.Warning message will also be displayed while verifyingand releasing instructions from front end application ofDPM System. There will be no such warning messagegenerated for bulk Verify & Release of Client Creation /modification or PAN modification requests.6. Enhancement of Overdue Delivery Out Report :Overdue Delivery-Out (DO) Report provided in Version Release 10 (referCircular No. <strong>NSDL</strong>/POLICY/2009/0090 dated October 1, 2009) is beingfurther enhanced. Features enhanced in the report are given below:(i) The report would be generated if the Auto DO or the manual DOinstructions for specified ISIN(s), settlement number(s) and markettype(s) are in status ‘Overdue at DM’.(ii) The pending DO quantity would be displayed after consideringIrreversible DO and manual DO instructions that are in status‘Accepted by <strong>NSDL</strong>’.(iii) In addition to the existing criteria, ISIN would also be input criteriafor generating the report.(iv) Securities position lying in the pool account in other settlementnumber(s) would also be displayed in the report.[ 412 ]
Screen shot of the report is displayed below:7) Alert in respect of account where PAN flag(s) is not enabled:At the time of activating Client accounts through front end applicationof DPM System or batch upload, if the PAN flag(s) of the account holder(s)is not enabled, the DPM System would display / generate warning messagein the form of alert. Alert would be flashed in the screen in case Clientaccounts are activated from the front end application of DPM System.Further, ‘.prn’ file would be generated in case Client accounts areactivated through batch upload.Circular No. Sub: Release of DPM System Version 10.0<strong>NSDL</strong>/POLICY/All Participants are hereby informed that DPM System Version 10.0 is scheduled2009/0090 for release. Salient features of DPM System Version 10.0 are provided atDate: October 1, 2009 Annexure A. Utility named DPM System Version 10.0 will be provided in theSQLASSIST intranet site of <strong>NSDL</strong> (http://sqlassist). Utility containing DPMSystem Version 10.0 should be downloaded from the SQLASSIST intranet siteand installed in the DPM server by Saturday, October 3, 2009.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inAnnexure A1) Conversion of balances under Delivery Out account of ClearingMember upon execution of Auto Corporate Action (ACA) :The functionality of conversion of balances in Clearing Member (CM)Delivery Out (DO) account upon execution of ACA is enhanced. On theexecution date of the ACA, balances under old ISIN in the DO account ofthe CM will be debited and credited in appropriate ratio under the newISIN. DO instruction in new ISIN will also be generated. This conversionwill now be effected on the execution date of ACA. As per existingfunctionality, overdue DO and Future dated DO will be cancelled by thesystem automatically on the day of ACA execution.Details of ACA can be viewed from the front end application of the DPMSystem under “Inquiries” screen by selecting the option - ‘CorporateAction / Auto Corporate Action Allotment’. For back office interfacewith the DPM System, ACA details will be available for export at option‘Exports’ - ‘ACA Export’ under the GISMO system.File formats in this respect were provided in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2009/0083 dated September 14, 2009.[ 413 ]
2) Addition of new sub-type named “Limited Liability Partnership” and“Limited Liability Partnership-DR”:New sub-type named “Limited Liability Partnership” and “LimitedLiability Partnership-DR” has been added to the Client Type: ‘BodyCorporate’ under the Client Maintenance Module. In this regard, aseparate detailed circular is being issued with respect to procedure tobe followed and documents to be obtained at the time of opening thedepository account under the aforesaid category.Impact on back-office file formats: Yes, as given below:Field Name Type Code Sub Type Type Sub TypeCodeBeneficiary 5 29 Body Limited LiabilityType/Subtype Corporate Partnership30 Limited LiabilityPartnership-DR3) Incorporation of execution date for Standing Instruction (SI)modification :Facility to modify SI indicator on the basis of execution date is beingintroduced in the DPM System. In view of this, it will be mandatory toprovide the execution date at the time of modifying SI indicator fromthe front end application or at the back office to interface with theDPM System. Execution date for modifying the SI indicator may be thecurrent or future date.Impact on back-office file formats: Yes, as given below:File format with record type ‘06’ (enclosed at Annexure B) with respectto Client Modification Import will facilitate to carry out change of SIindicator with an execution date (current or future date) whereinParticipants will be required to mention the execution date.For carrying out change of SI indicator through the existing file formatwith record type ‘04’, execution date will not be required to be providedas execution date by default will be the current date.4) Overdue Delivery Out Report:A report named ‘Overdue Delivery Out Report’ is being provided at thefront end application of the DPM System at ‘Reports’ - ‘Settlement’which shall reflect DO instructions that are in the overdue status. Reportfor overdue DO instructions will be available till the status of the DOinstructions are ‘Overdue at DM’. Participants can view ‘Overdue DeliveryOut Report’ by providing the Client ID range of the CM, Pay-in date, CCID, Market Type and Settlement Number to ascertain the requestedquantity and the available quantity in respect of the DO instructions.To ascertain the overdue status report of single CM, the input criteriashould be CC ID / Client ID (from- to), market type and settlementnumber.Impact on back-office file formats: No.Circular No. Sub: Release of DPM System Version 10.0<strong>NSDL</strong>/POLICY/All Participants are hereby informed that DPM System Version 10.0 is scheduled2009/0083 for release in the month of October 2009. DPM System Version 10.0 will featureDate: September 14, the functionality of converting balances under the Delivery-Out account of2009 the Clearing Members Pool Account pursuant to Automatic Corporate Actions.The changes in the back-office module for Version 10.0 and the file formatsin respect of the back-office batch interface with the DPM System are enclosed.Participants are advised to make necessary changes to their back office ashighlighted in the enclosed file format by September 25, 2009.[ 414 ]
Circular No. Sub: Release of DPM System Version 9.7<strong>NSDL</strong>/POLICY/All Participants are hereby informed that DPM System Version 9.7 is scheduled2009/0081 for release on Saturday, September 12, 2009. Salient features of DPM SystemDate: September 5, Version 9.7 are provided in Annexure A. Compact Discs (CD) containing DPM2009 System Version 9.7 and instructions regarding upgradation will be sent toParticipants by courier separately. Participants will receive the CDs tentativelyby September 10, 2009.CD containing DPM System Version 9.7 should be installed in the DPM serveronly on September 12, 2009.For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at(022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inAnnexure A1) Upload facility for Corporate name change :Facility to carry out change of name in the corporate account on abatch mode basis (i.e, back office interface with the DPM System) isbeing provided. File formats and features of the facility in this respectwere provided in <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2009/0048 dated June17, 2009.2) Statement of Holding (SOH) Export from archival database :SOH export can be extracted from the archival database by specifyingthe Client ID range and date. Only ‘Full Export’ of the SOH can beextracted from the archival database.3) PAN structure validation for HUF accounts :Facility to validate PAN structure of the HUF is being provided. Followingvalidations will be carried out at the time of opening HUF accounts ormodifying the demographic details in the HUF accounts:Ø Length of PAN should be of 10 characters.Ø First five and the tenth character of PAN should be capital letter(between ‘A’ to Z’).Ø Fourth character should be a capital letter ‘H’.Ø Sixth to ninth characters should be numeric (between ‘0’ and‘9’).a) Operating DPM System through front end application :i) While opening an HUF account through the ClientMaintenance Module, a warning message will be displayedif captured PAN of HUF is having invalid PAN structure. Similarwarning message will also be displayed while modifying PANin an existing HUF account or modifying demographic details/ any other details in an HUF account such as bank accountname, number etc., and such an account has an invalid PANstructure.ii) Warning messages will be displayed at both stages i.e.,Capture as well as Verify & Release in the Client Creationand Client Modification Screen if the account has an invalidPAN structure.b) Back office Interface with the DPM System(i) PAN structure validation will be implemented for HUFaccounts also in following Back Office interfaces:a) Client Master Creation Importb) Client Modification Importc) PAN and PAN Flag modification Import(ii) In case of invalid PAN structure, a warning message will begenerated in the error file (i.e. PRN file) for every invalid[ 415 ]
PAN structure in Client account. However, no record will berejected for this reason.(iii) Participant may update the invalid PAN or cancel theserecords through front end application of the DPM Systembefore releasing the instructions in the DPM System. Warningwill also be displayed while verifying and releasinginstructions from front end application of DPM System. Therewill be no such warning for bulk verify & release of clientcreation / modification or PAN modification requests.4) Facilty to search ISIN based on security type :Facility is being provided to make search ISIN(s) on the following securitytypes in the DPM System modules viz., Demat, Remat, Settlement andPledge:a) Equity (will be default option)b) Commodityc) Others - Commercial Paper, Certificate of Deposit, Debenturesetc. (other than equity and commodity ISINs)d) All (will display all type of ISINs)5) Report on Past dated Statement of Holding (SOH)A facility to generate past dated SOH report is being provided in theDPM system for a specified past date. It will be mandatory to enter thedate for which SOH report is required to be generated. It is recommendedthat Client ID(s) may also be entered alongwith the date for generatingthe SOH report.6) Enhancement with respect to ‘No Nomination Opted’ flaga) At the time of opening Client account with certain Type and subtype(list given below), it will be mandatory to capture thenominee details (if Client has opted for the nomination facility)or enable ‘No Nomination Opted’ flag (if Client has not opted forthe nomination facility). If either of the above options are notenabled by the Participant, then an error message will be displayedas “Either provide Nominee / Guardian details or select the NoNomination Opted Flag” on the front end application of the DPMSystem (upon capturing and verify & releasing the record) or inthe ‘PRN’ file in case of batch upload.List of client Type and sub-type where it is mandatory to capturenominee details:TypeResidentNRIForeign National[ 416 ]Sub-typeOrdinaryMargin AccountPromoterNRI - RepatriableNRI NonRepatriableDRNRI-Repatriable-PromoterNRI NonRepatriable -PromoterDRFNFN-Promoter
) At the time of carrying out Client modifications, if nominationdetails are removed, it will be mandatory for Participants to select‘No Nomination Opted’ flag (after obtaining proper request fromClients) or vice versa Otherwise, the aforesaid message[mentioned in point no. 6 (a) above] will be displayed on thefront end application of the DPM System or in the ‘PRN’ file incase of batch upload. Client modification File Formats were issuedvide Circular No. <strong>NSDL</strong>/POLICY/2009/0042 dated June 1, 2009.Circular No. Sub: Release of DPM System Version release 9.7<strong>NSDL</strong>/POLICY/As all Participants are aware, a facility to carry out change of name for2009/0048 corporate accounts through front end application of the DPM System wasDate: June 17, 2009 provided in Version Release 9.0 (refer Circular No. <strong>NSDL</strong>/POLICY/2008/0085dated December 16, 2008).Further to the above, DPM System Version 9.7 will be released in July 2009incorporating an upload facility for corporate name change. File format (withrecord type ‘03’) with respect to Client Modification Import for carrying outchange of name is enclosed at Annexure A. It is recommended that the newfile format with record type ‘03’ may be used only if Participants wish tocarry out change of name in the corporate account through upload of datafrom the back office system. Modification to other Client details may becarried out using the existing file format with record type ‘02’. InterestedParticipants are requested to be ready with the new back office file formatsby June 30, 2009.No change is involved for Participants who wish to use the front end applicationof the DPM System for carrying out change of name in corporate accounts.For any information/clarifications, Participants are requested to contact<strong>NSDL</strong> Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inCircular No. Sub: Release of DPM System Version 9.5<strong>NSDL</strong>/POLICY/All Participants are hereby informed that DPM System Version 9.5 is scheduled2009/0042 for release in the second week of June 2009. Features of the DPM SystemDate: June 1, 2009 Version 9.5 are given below:(i) Signing and encryption of DPM instruction import file generated fromthe back office application of the Participant for onward upload intothe DPM System (explained at Annexure I).(ii) PAN related message in Transaction Statement (generated from the DPMSystem) only for suspended accounts (explained at Annexure II).(iii) Incorporation of 'No Nomination Opted' flag in the DPM system to identifyClient accounts who have not opted for nomination facility (explainedat Annexure III).For any information/clarifications, Participants are requested to contact <strong>NSDL</strong>Help Desk at (022) 2499 4601 to 4610 or email at helpdesk@nsdl.co.inCircular No.Sub: Release of DPM System Version 9.3 and its features<strong>NSDL</strong>/POLICY/All Participants are hereby informed that Compact Discs (CDs) containing DPM2009/0015 System Version 9.3 and instructions regarding upgradation are being sent toDate: February 27, 2009 Participants by courier. Salient features of DPM System Version 9.3 are as follows:1) Overdue Account Transfer Report:'Overdue Account Transfer Report' provided under module 'Reports' -'Settlement' will facilitate Participants to enter the Client ID range, CCID, market type and settlement number to ascertain the requestedquantity and the available quantity in the Client account in respect of[ 417 ]
an account transfer instruction. This report will reflect only those Clientto CM Pool account transfer instructions that are in overdue status. Reportfor a settlement number and market type will be available till the statusof the instructions is 'Overdue at DM'.Impact on back-office file formats: No.2) Disabling of second / third holder fields for Minor accounts:As accounts opened in the name of the minor cannot have joint holdings,a validation check disabling the second / third holder fields in case ofminor accounts where "Guardian" field is selected is provided in thisversion release. As Participants are aware, an utility was provided toextract an output of probable data entry errors made during specifiedtime period to identify minor accounts with joint holdings (Ref. : Pointno. 8 of Circular No. <strong>NSDL</strong>/POLICY/2006/0057 dated November 24, 2006).Since the above facility is now released, there will be no need to run theutility in respect of minor accounts with joint holdings. However,Participants may use this utility one-time to find out all such accountsopened till the version release.Impact on back-office file formats: No.3) Alert in respect of Companies whose Registrar and Transfer Agents (R& T Agents) have stopped providing services:At the time of capturing and verify/releasing dematerialisation requestsmanually and through back office upload, an alert message on the screenand error file (".prn") will be displayed with respect to those companieswhose R & T Agents have informed that they have stopped providingservices to these companies. A list of such companies with their ISINs inan excel format will be made available on the SQLASSIST Intranet site(https:\\sqlassist) within three days of every fortnight i.e. for the fortnight1st to 15th day of the month, the file will be made available by 18th dayof the month and for the fortnight from 16th to the end of the month,the file will be available by 3rd of the subsequent month. Further, thefile name on the excel sheet will carry the date on which the file wasmade available on the SQLASSIST site for easy identification of the latestfile. Process to be followed by Participants in this regard is as follows:a) Participants will have to download the excel file containing thelist of companies from the SQLASSIST site and copy the same intothe DPM Server.b) Utility named "ISINListImport.exe" will be available in the DPMserver in the directory "C:\ISINLst\exe". Participants need toexecute this utility by double clicking on it.c) On executing this utility, a message will appear that will promptthe User to select the Excel file (copied in the DPM server).Participants must take due care to select the file copied in theDPM server as per step 3 (b) above for the latest fortnight [and notto inadvertently select the earlier copied file(s)].d) On selecting the file, the utility will load the list of companiesprovided in the file into the DPM database.Impact on back-office file formats: No.4) Addition of new sub-type named Foreign Venture Capital:New sub-type named 'Foreign Venture Capital' has been added to theClient Type: 'Body Corporate' under the Client Maintenance Module.[ 418 ]
Impact on back-office file formats: Yes, as given below:Field Name Type Code Sub Type Code Type Sub TypeBeneficiary 5 27 Body Corporate ForeignType/SubtypeVenture Capital5) File to identify Client Accounts without Nomination:An utility will be provided to generate a file in text format containingClient accounts (Types: 'Resident', 'NRI' and 'Foreign National') withoutnomination (refer Circular Nos. <strong>NSDL</strong>/POLICY/2009/0002 & 0004 datedJanuary 3 and 9, 2009 respectively regarding declaration of nominationdetails by Clients). The User manual for loading the utility will be sentalongwith the version release CD.Impact on back-office file formats: No.6) Functionality of partial settlement of pay-in related instructionsexecuted from Client to Clearing Member Pool Account:The feature of partial settlement of pay-in related instructions executedfrom Client to Clearing Member Pool Account is incorporated in this versionand will be activated shortly. (refer <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2009/0005 dated January 12, 2009 regarding release of DPM systemVersion 9.3). As this feature will be released shortly, Participants arerequested to be ready with their back office changes compatible withthe file formats enclosed in the aforesaid circular at the earliest. Thefunctionality and the date of activation of this feature will be informedshortly.For further information / clarification, Participants are requested to contactMr. Narayan Venkat Tel : Tel : (022) 2499 4479 (email : narayanv@nsdl.co.in) /Mr. Rakesh Mehta Tel : (022) 2499 4480 (email : rakeshm@nsdl.co.in).Circular No.Sub: Release of Version 9.0 and its features<strong>NSDL</strong>/POLICY/All Participants are hereby informed that Version 9.0 of the DPM System is2008/0085 scheduled for release on December 20, 2008. Compact Discs (CDs) containingDate: December 16, Version 9.0 of the DPM System and instructions regarding upgradation will be2008 sent to Participants by courier separately.Salient features of the Version 9.0 of the DPM System are mentioned asfollows:(I) Change of name in Corporate Accounts:a) DPM System will facilitate change of name in Corporate accountsfor Client types viz., Body-Corporate, Bank, Financial Institution(FI), Foreign Institutional Investors (FII), Mutual Fund (MF), Trustand various sub-types as given in the enclosed Annexure I.b) Documents required to be collected by Participants at the timeof change of name of Corporates are given in the enclosedAnnexure II.c) The change of name for a Corporate account can be carried outin the DPM System through Client Modification Module - Primaryand Address Details Modification.d) While carrying out the modifications, the name of any existingaccount holder of an account can neither be deleted nor any newname can be added. Participants can only make changes to thename(s) of existing account holder(s) of the account.[ 419 ]
e) When the instruction is captured and verify/released, the DPMSystem will flash :(i) an alert message on the screen as to whether the Participantwishes to make changes to the PAN, email ID, mobile numberetc. of the account holder. Participants may ignore suchmessage if there are no changes to be carried out with respectto the aforesaid details.(ii) a warning message on the screen to re-capture the signaturesof the authorized signatories. Participants may ignore suchmessage if Participants have already re-captured thesignatures of the authorized signatories or there is no changeto the authorized signatories.f) An option to generate Client Name Audit Report has been addedto the existing Client Audit Report in the DPM System that willdisplay the old as well as new name of the Corporate.Note :1. In case of amalgamation / scheme of arrangement, Participants arerequested to close the existing account and open new account by thefollowing the prevailing process, as at present.2. Name change to the Corporate account can be carried out only throughthe front end application of the DPM System.3. The pledge details in the DPM system of the Participant of the pledgeewill reflect the old name of the Corporate, if the Corporate is thepledgor.4. Subsequent to name change, the Transaction Statement (SOT) reportwill reflect the new name of the Corporate for the SOT generated forthe past dates as well. The Statement of Holding (SOH) report will alsoreflect the new name of the Corporate. Hence, it is for the Corporateto decide whether it wants to open a new account or continue with theexisting account with the new name.II) Extraction of ISIN wise SOT from the archival database of the DPMSystem :A provision for giving ISIN as an input parameter for generatingTransaction Statement (SOT) from the archival database of the DPMSystem has been added in addition to the existing input criteria.III) Additional input criteria for generating Client Audit Report:An additional field viz., date range has been incorporated in the ClientAudit Report. This shall facilitate Participants to generate the reportpertaining to the modifications carried out in a demat account for thespecified date range.Annexure ISr.No. Type Sub-Type1 FI Govt. sponsored FI2 FI SFC3 FI Others4 FI Govt. sponsored FI - Promoter5 FI SFC-Promoter6 FI Others-Promoter[ 420 ]
7 FII Mauritius Based8 FII Others9 FII DR10 Body Corporate Domestic11 Body Corporate OCB-Repatriable12 Body Corporate Govt.Companies13 Body Corporate Central Government14 Body Corporate State Government15 Body Corporate Co-operative Body16 Body Corporate NBFC17 Body Corporate Non-NBFC18 Body Corporate Broker19 Body Corporate Group Company20 Body Corporate Foreign Bodies21 Body Corporate Others22 Body Corporate OCB-NonRepatriable23 Body Corporate OCB-DR24 Body Corporate Foreign Bodies - DR25 Body Corporate Margin Account26 Body Corporate Domestic-Promoter27 Body Corporate Govt.Companies - Promoter28 Body Corporate Central Government - Promoter29 Body Corporate State Government - Promoter30 Body Corporate NBFC-Promoter31 Body Corporate Non-NBFC-Promoter32 Body Corporate Group Company - Promoter33 Body Corporate Foreign Body-Promoter34 Body Corporate Others-Promoter35 Body Corporate Co-operative Body - Promoter36 Mutual Fund DR37 Mutual Fund MF38 Bank Foreign Bank39 Bank Co-operative Bank40 Bank Nationalised Bank41 Bank Others42 Bank Others-Promoter43 Bank Nationalised Bank - Promoter44 Bank Foreign Bank - Promoter45 Bank Co-operative Bank - Promoter46 Trust(i)Annexure IIIn case the entity is registered under the Companies Act, 1956, thefollowing documents should be obtained from the Client:• Letter requesting for change of name signed by the authorizedsignatories.• Certified true copy of fresh certificate of incorporation consequentupon change of name issued by the Registrar of Companies.[ 421 ]
• Certified true copy of Board Resolution for change of name.(ii) In case of other corporate entities, the following documents should beobtained from the Client:• Letter requesting for change of name signed by the authorizedsignatories.• Certified true copy of Board Resolution for change of name.• Certificate of registration issued by SEBI / relevant StatutoryAuthorities, as applicable.Further, in case of change in authorized signatories, obtain a fresh boardresolution mentioning authorised signatories who shall operate the demataccount alongwith the specimen signature & photograph and follow theprocedure given in our circular no. <strong>NSDL</strong>/POLICY/2007/0077 dated December19, 2007.Circular No.Sub : Release of Version 8.7 and its features<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that Version 8.7 of the2008/0059 DPM System is scheduled for release on September 6, 2008. Compact DiscsDate: September 1, (CDs) containing Version 8.7 of the DPM System and instructions regarding2008 upgradation will be sent to DPs by courier separately.The features of Version 8.7 are given below:1) Standing Instruction (SI) Indicator in enabled status for Client Category- Individual, Type - Resident and Sub-Type - Ordinary :SI indicator in the DPM system would be in an enabled status with respectto Client Category : Individual, Type : Resident and Sub-type : Ordinaryat the time of opening demat accounts. For those Clients who have notopted for SIs, the DP should disable the SI indicator in the DPM System.Impact on back office file formats:With respect to back office file formats, the input file structure willremain the same and DPs will continue to assign the value for SI indicatoras 'Y' or 'N'2) SMS flag indicator to be automatically enabled after the mobilenumbers of the account holders are captured / modified in the DPMSystem :The SMS flag of the account holder will automatically get enabled inthe DPM system after the DP captures the mobile number (DPs areadvised to strictly capture the ten digit mobile number with the firstdigit as "9") of the respective account holders at the time of opening ofdemat accounts or modifying mobile numbers of the existing accountholders.If the Client submits the mobile number but does not wish to opt forthe SMS Alert facility, the DP should capture the mobile number in theDPM system and disable the SMS flag from the front end of the DPMSystem or through back office file import. The SMS flag of the respectiveaccount holder(s) will automatically get enabled upon modifying themobile numbers in the DPM System. Hence, DPs are requested to take[ 422 ]
due care at the time of modifying the mobile numbers in the DPM system,particularly for Clients who have not opted for the SMS Alert facility.Impact on Back Office :With respect to back office file formats, the input file structure willremain the same and DPs will continue assigning the value for SMSindicator as 'Y' or 'N'.(3) Exception Reports :There are text reports being provided in Version 8.7, which will generatethe following information.(i) Details of Clients whose SI indicators are not enabled in the DPMSystem for Client Category : Individual, Type : Resident and Subtype: Ordinary.(ii) Details of Clients whose mobile numbers have been captured inthe DPM System but SMS flag is not enabled.The above exceptional reports are generated for Client accountswhich are in statii "Active" / "Suspended for Debit and Credit" /"Suspended for Debit" / "Registered" / "On hold by <strong>NSDL</strong>".(4) Minor Nominee attaining Majority Report :A new report will be provided in the DPM system, which will facilitateDPs to view the report of all minor nominees who have become major(18 years). The report can be extracted from the DPM System byproviding the date and Client ID range. This report will provide for thedetails of the Client, Client's nominee and the Guardian of the nominee,if applicable.(5) Execution of multiple account level freeze requests in the DPMSystem :DPM System would facilitate to process multiple account level freezerequests viz., "Suspended for Debit and Credit" and "Suspended forDebit". The request can be initiated by the below three sources:(a) Requests initiated by the DP through DPM system.(b) Request initiated by the Client on SPEED-e (However, Clientscannot initiate multiple account level freeze on SPEED-e).(c) Request initiated by <strong>NSDL</strong> from the DM system.Salient features of multiple account level freezes are as follows:(i) The highest level of freeze will be effective at a given pointof time. Example; if two freeze requests viz. "Suspendedfor Debit and Credit" and "Suspended for Debit" are initiatedby any of the above sources, then in such cases, "Suspendedfor Debit and Credit" would be in effect first and thesubsequent freeze ("Suspended for Debit") which is pendingfor execution would be effective after the former freeze("Suspended for Debit and Credit") is unfrozen.(ii)In case of freeze requests of same level, the freeze requeststhat is received first at DM System (<strong>NSDL</strong>) would be processed[ 423 ]
irrespective of the source and another freeze of same levelreceived subsequently at DM System will remain pendingfor execution. There will be no priority set if the freezerequests are of same level i.e. "Suspended for Debit" or"Suspended for Debit and Credit" received from the threeabove sources.(iii) Upon executing an unfreeze request with respect to activefreeze instruction, which is in effect (the unfreezeinstruction will be closed/settled on the execution date),the subsequent freeze request of same level, irrespectiveof the source, will become effective.(iv) DPs will be able to view all the freezes executed (includingpending for execution) in the DPM system. The status in theDPM System for effective freeze instruction includingpending for execution would be displayed as 'Frozen'.Further, the Client Master Report would display the variousmultiple account level freezes executed in the Clientaccount viz., freeze order number, freeze level and freezedescription.(v) DPs are requested to note that Clients cannot initiatemultiple account level freezes of same level from SPEED-e.However, if the Client account is already frozen in the DPMsystem, then Client can initiate freeze instruction throughSPEED-e of same level or vice versa and subsequent freezeinstruction will be remain pending for execution.Impact on Back officeThe status of all the freeze requests would be reflected as "Frozen" in"Changed Orders for the Day" export. DPs are advised to update theirback office programs to accept multiple account level requests. In caseof multiple freeze requests, subsequent freeze needs to be applied tothe account in the back office, in case the first freeze request isremoved. Back office software needs to be enhanced to handle suchcases.(6) Removal of Maturity Check for Commodity ISIN :DPs are requested to note that maturity check on ICIN (CommodityIdentifier) will be removed. DPM System will allow the followingtransactions for ICINs where maturity date has expired:(i) Capture and verify/release Remat instruction.(ii) Capture and verify/release Account Transfer Instruction (DFP andRFP) between a CM (Source) and a Client (Target).(7) Inclusion of Dormant Account Audit in Client Audit reportAs all DPs are aware any Client account having no 'Debit' transaction inthe last six months are considered as 'Dormant' account (Refer CircularNo. <strong>NSDL</strong>/POLICY/2008/0021 dated April 4, 2008). In case the Clientaccount becomes a dormant account or non-dormant, the same will bereflected in the Client Audit Report. Upon the Client account becoming[ 424 ]
'Dormant' to 'Non-Dormant' or 'Non-Dormant' to 'Dormant', the ClientAudit Report will reflect the status as "Dormant Flag".Circular No.Sub: Release of DPM System Version 8.0 and its features<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that Version 8.0 of the2008/0007 DPM System is scheduled for release in the second week of February 2008.Date: February 5, 2008 The changes in the back-office module for Version 8.0 and the File Formats inrespect of the back-office batch interface with the DPM System are enclosed.In this regard, DPs are advised to incorporate the changes in their back-officefor compatibility with Version 8.0. Compact Discs (CDs) containing Version8.0 of the DPM System and instructions regarding upgradation will be sent toDPs by courier separately.Features of Version 8.0The features of this version release are as follows:I. PAN structure validation in the Client Maintenance Module.II. PAN Verification Utility.III. Enhancement in Maker and Checker facility in DPM modules.IV. Power of Attorney (POA) Module related developments.a. Audit report for Individual POA Holder, Authorised Signatory andCorporate POA.b. Export of mapping of client account to POA.c. View Signature screen to include "Minimum no. of AuthorisedSignatories required for signing".d. View Account holderwise POA mapping details in POA SignatureDetails screen.Detailed Description of Features:I. PAN structure validation in the Client Maintenance ModuleIntroduction:As DPs are aware, PAN is mandatory in Client Maintenance Module inthe DPM system at the time of Client creation and Client detailsmodification. PAN is validated for alpha numeric composition and length(exact 10 characters) of PAN. After the version release 8.0, PAN ofaccount holders would also be subjected to structure validation. Incase structure validation fails, a warning message would be displayedto the DP user enabling the user to initiate corrective action. However,DP can override the warning and continue its operation. The warningwould not restrict DP from capturing the PAN which fails structuralvalidation. DPs may note that this feature is designed only to enableDPs to identify errors while capturing PAN. DPs will need to deviseappropriate procedures around this feature to confirm with requirementof PAN compliance.In the Version 8.0, a utility will also be provided to extract report containinglist of all existing PANs, which fail structural validation test, for active andfrozen Client accounts in DPM system.[ 425 ]
Detailed Description:General1. The structure of PAN would be validated as follows:o 1-5 characters should be Capital letterso 6-9 characters should be Numberso 10th character should be a Capital letter2. This validation would be implemented in online Client creation andClient details modification screens of DPM System. In the DPM BackOffice interfaces, this validation would be implemented in Client MasterCreation, Client details modification import and PAN /PAN flagmodification import utility (i.e. PAN import Utility).3. This validation would be applicable to all Client types exceptintermediary.Guidelines:Front End Screens of DPM System1. While creating a new Client account in Client maintenance, a warningmessage would be displayed if PAN captured for any account holder ishaving invalid PAN structure.Further, while modifying PAN in the existing Client account or modifyingany other details in the existing Client account which is having invalidPAN structure, a warning message would be displayed.2. These warning messages would be displayed at both stages i.e., captureas well as Verify & Release in Client creation and Client modificationprocess.3. This warning message would only indicate the account holder(s) forwhich PAN structure is invalid. (e.g. PAN Structure of First Holder isinvalid).4. DP may either modify PAN or override the warning and continue capturing/ modifying the Client details.Back office Interfaces1. PAN structure validation would be implemented in following Back Officeinterfacesa. Client Master Creation importb. Client details modification importc. PAN and PAN Flag modification import utility2. The aforesaid import utilities are provided for bulk capturing of Clientaccounts, modifying the Client details and updating PAN and PAN flag inexisting Client accounts respectively. DP can then release these newlycreated Client accounts and PAN modification requests either throughfront end application or using respective bulk Verify & Release utilitiesprovided in DPM System.3. If input file of aforesaid utilities contains Client account holders withinvalid PAN structure, a warning message would be generated in error[ 426 ]
file (i.e. PRN file) for every invalid PAN structure in Client account.However, no record would be rejected for this reason.4. DP would be required to update the invalid PANs or cancel these recordsthrough front end application of DPM system before releasing therespective information to <strong>NSDL</strong>.5. It may be noted that warning would be displayed while verifying andreleasing instructions from front end only. There would be no suchwarnings for bulk Verify & Release of Client creation/modification orPAN modification requests.6. There is no change in file formats of all the aforesaid utilities viz.Client creation/modification or PAN modification. The new warningcode added is given in Annexure I.Though PAN structure validations are incorporated in DPM back officeinterface also, DPs are advised to create similar PAN structure validationin their back office so as to eliminate the errors, if any, in its own backoffice system.Report Generation UtilityThe report generation utility would provide the list of all account holders inthe Client account having invalid PAN structure as of date and time ofexecution.1. The utility would extract the details in TEXT format with fields separatedusing character. The file format of this report is given inAnnexure I.2. It may be noted that only PANs with invalid structures would be reflectedin this report i.e. if there is a Client account with joint holders wherePAN of first holder has valid structure but PAN of second holder hasinvalid structure, then this report would list only second holder PAN inClient account.II. PAN Verification UtilityFeature Description:<strong>NSDL</strong>, vide its circular no. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006advised DPs to obtain PAN card of the demat account holder(s) andcompare the name appearing in the Client account with the nameappearing on the website of the Income Tax Department (ITD) i.e. http://incometaxindiaefiling.gov.in/challan/enterpanforchallan.jsp beforeactivating the Client account or modifying PAN of existing accountholders.Further, <strong>NSDL</strong> vide its circular <strong>NSDL</strong>/POLICY/2007/0048 dated August14, 2007 had informed DPs that ITD has authorized <strong>NSDL</strong> to provide aninternet based service to eligible entities for verification of PAN details.The PAN details made available through this facility are as per the ITDdatabase. Further, the internet based service of <strong>NSDL</strong> for verifying PANdetails is explained in aforesaid circular dated August 14, 2007. Thisfacility provides for a batch file upload in a prescribed format for bulkvalidation of PAN and provides a response file for the same indicating ifthe PAN is valid or not.[ 427 ]
In the Version 8.0, a utility will be provided for PAN verification whichDPs can use to generate file containing PAN details in the format that iscompliant to aforesaid batch file upload facility. This utility can beused for the newly captured Client accounts as well as for Client accountsin which PAN modification requests are captured in DPM System. DPmay release the newly created Client accounts or PAN modificationrequests to <strong>NSDL</strong>, based on the PAN flag value in response file, Further,it may be mentioned that, PAN details will be extracted only when thePAN is modified in the DPM System.Detailed Description:1. This utility would generate four different files as follows:Sr. No File Name File Contents1. PANR[n].txt This file would contain PAN details in the format(for information compliant to aforesaid facility.on 'n' please refer It would contain PAN ofpoint 6 in notes a. Account holders in Client accounts which arebelow)in "Registered" status.b. Account holder for which PAN modificationrequest is in "Captured" status.2. PANDTLR [n].txt This file would contain other details of Client(for information for which PAN is extracted in PANR[n].txt file,on 'n' please refer such as Client ID, holder indicator, holder namepoint 6 in notes PAN, creation/ modification flag and currentbelow)status of Client account.This file should be used to map the responsereceived from aforesaid verification facility asper circular <strong>NSDL</strong>/POLICY/2007/0048 datedAugust 14, 2007 with account details in the file,in order to identify the Client account and itsholders for which PAN is invalid.3. PANM[n].txt This file would contain PAN details in the format(for information compliant to aforesaid facility. It would containon 'n' please refer PAN ofpoint 6 in notes a. Client Accounts in "Active / Suspended forbelow)Debit / Suspended for Debit & Credit / Onhold By <strong>NSDL</strong>" status.b. Account holder for which PAN modificationrequest is in "Closed/Settled" status.4. PANDTLM [n].txt This file would contain other details of Client(for information on for which PAN is extracted in PANM[n].txt file,'n' please refer such as Client ID, holder indicator, holder namepoint 6 in notes PAN, creation/ modification flag and currentbelow)status of Client account.This file should be used to map the responsereceived from aforesaid verification facility asper circular <strong>NSDL</strong>/POLICY/2007/0048 datedAugust 14, 2007 with account details in the file,in order to identify the Client account and itsholders for which PAN is invalid.[ 428 ]
2. PAN verification utility would extract details of only those accountholders which were registered or modified after last export date andtime. i.e.a. PANR[n].txt and PANDTLR[n].txt files would show PAN details ofonly those Client accounts that are registered or for which PANmodification request is captured in DPM System after last exportdate and time.b. PANM[n].txt and PANDTLM[n].txt files would show PAN details ofonly those Client accounts that are activated or frozen or forwhich PAN modification request is successfully processed in DPMSystem (i.e. closed/settled) after last export date and time.c. These aforesaid two files would show the PAN only if PAN ismodified.3. DP can upload PANR[n].txt and PANM[n].txt files individually to <strong>NSDL</strong>'sTax Information Network (TIN) site for bulk verification of PAN as perthe procedure mentioned in the circular <strong>NSDL</strong>/POLICY/2007/0048 datedAugust 14, 2007 provided the DPs have subscribed for this facility asper the aforesaid circular. DP would be provided a response file from<strong>NSDL</strong> TIN site for each uploaded file.4. DP can then merge the response files of PANR[n].txt and PANM[n].txtfiles received from <strong>NSDL</strong> TIN site and the respective Client detail files(i.e. PANDTLR[n].txt and PANDTLM[n].txt) and compare them to identifyClients accounts with valid and invalid PAN.5. If PAN is available in ITD database, DP can activate the Client accountor release the PAN modification request to <strong>NSDL</strong> provided the nameappearing in the Client account matches with the name appearing onthe ITD website6. The aforesaid batch file upload on ITD website for PAN verificationfacility accepts maximum 200 PAN detail records in single batch file.Thus, if the number of PAN records to be extracted post last exportdate and time are more than 200 then the multiple files would begenerated containing 200 records in each file. A running sequencenumber would be given starting from "1" for every batch file generatedby this utility at that point in time.7. If there are no PAN details captured or modified after last export dateand time, then the files to be uploaded on <strong>NSDL</strong> site i.e. PANR[n].txtand PANM[n].txt would be generated containing only trailer record with"Number of Detail Records" as "0"and the other Client detail files i.e.PANDTLR[nn].txt and PANDTLM[nn].txt would be generated containingonly header information.8. It may be noted that at first execution of this utility, the PAN detailswould be extracted from the date and time at which this utility wasinstalled on DPM server.9. The file format of these files is given in Annexure II.III. Enhancement in Maker Checker Facility in various DPM modulesIntroduction:<strong>NSDL</strong> has issued guidelines to DPs for segregation of duty viz. Maker-Checker while executing instructions i.e. the person who captures the[ 429 ]
instruction (Maker) and the one who releases instruction to <strong>NSDL</strong>(Checker) should be two different persons. This is required with theintention that person releasing the instruction to <strong>NSDL</strong> can re-verifythe data entered by Maker against the instruction slip and rectifies themistakes, if any. In case of mismatch, Checker can correct the details,save the instruction and then release to <strong>NSDL</strong>. Maker Checker conceptis applicable for Client Maintenance Module also.In the current DPM system, DP is required to implement the controls ofMaker and Checker administratively by ensuring both rights are notallocated to the same user.In the Version 8.0, Maker Checker policy would be enforced in DPMSystem by the system itself. After Version 8.0, the application wouldrestrict the administrator to allocate both Maker and Checker rights tothe same function in same group i.e. a group cannot be created havingboth "Capture and Save" and "Verify & Release" rights allocated to samefunction in same group.A report generation utility will also be provided to extract list of allUser IDs having both Maker and Checker rights.Salient Features of Maker-Checker:1. The restriction of allocating Maker and Checker rights to same userwould be built at group level i.e. a group can be defined to have aMaker rights for one-function and Checker rights for another. However,both Maker and Checker right for same function would not be allowedin same group. The same has been illustrated by an example.e.g. Group "A" can be created with "Capture and Save" rights for "AccountTransfer" instruction and "Verify & Release" rights for "Inter DepositoryTransfer" instruction. But, a group can not be created having both therights (i.e. "Capture and Save" and "Verify & Release") allocated to"Account Transfer" or "Inter Depository Transfer" instruction in samegroup.2. Checker user would be given both modify as well as Verify & Releaserights i.e. user would be allowed to Verify & Release and modify theinstruction details though Checker user is not allowed to create newinstruction.3. However, Back Office interface will continue to function as in the existingsystem.4. While creating new User ID, the main group ID and the alternate groupID should be selected such that Maker Checker policy is not violated. Ifit is done, then an error message would be given. Application would notallow creating such User IDs. The same has been illustrated by example.e.g. Group "A" is created with "Capture and Save" right for "AccountTransfer instruction" and Group "B" is created with "Verify & Release"rights for same instruction. If DP allocates these groups as main andalternate groups while creating new User ID or modifying group detailsof existing User ID, then the application would reject the request givingan error message.5. Similarly, if both main and alternate groups are allocated to the User IDand subsequently administrator allocates rights in any of this groupssuch that it violates the Maker-Checker policy, then the functional rights[ 430 ]
given in alternate group would be overridden by the rights given inmain group. Same is illustrated by example below.Case 1: If User ID "Test1" is created with main group id as "Group A" andalternate group id as "Group B" such that both groups are created forMaker activity and subsequently if administrator changes the functionalrights of Group B to checker activities, then User ID "Test1" would toallowed to carry out only Maker activities.Case 2: If User ID "Test2" is created with main group id as "Group A" andalternate group id as "Group B" such that both groups created for Checkeractivity and subsequently if administrator changes the functional rightsof Group A to Maker activities, then User ID "Test2" would be allowed tocarry out only Maker activities after the allocation of these newfunctional rights.Feature Description:Detailed Description:Functional rights defined in DPM System for each function are as follows:Query : DPM user can query on the specified functionCapture and Save : DPM user can capture and save details of specifiedfunctionStatus Change : DPM user can change status of the specified functionVerify & Release : DPM user can Verify & Release the specified functionCancellation : DPM user can cancel the specified functionExecute : DPM user can execute the specified functionIn the new system, the above rights would be segregated as follows:Sr. No Function Right Maker Checker1 Query √ √2 Capture and Save √3 Status Change √4 Verify & Release √5 Cancellation √ √6 Execute √ √Following restrictions would be applicable while creating new user group:1. Query rights will be available to both Maker and Checker users.2. "Capture and Save" Rights (Creation Rights) would be available only toMaker user i.e. if DP chooses "Capture and Save" rights for any of thefunction, "Verify & Release" right for same function will not be allowed.3. "Status Change" rights would be given only to maker user and "Verify &Release" of this function would be given to Checker user i.e. if DP chooses"Status Change" rights for any of the function, "Verify & Release" rightfor the same function would not be allowed.4. "Verify & Release" rights would be given only to Checker user i.e. if DPchooses this right for any of the function, "Capture and Save" and "StatusChange" rights for same function would not be allowed. "Update" rightswould be included in this right by default.[ 431 ]
5. "Cancellation" rights would be available to both Maker and Checkerusers i.e. DP would be allowed to allocate this right along with both"Capture and Save"/ "Status Change" and "Verify & Release" rights.6. Similarly, "Execute" rights would be available to both Maker and Checkerusers i.e. DP would be allowed to allocate this right along with both"Capture and Save"/ "Status Change" and "Verify & Release" rights.Report Generation UtilityThe Report Generation Utility would provide the list of all User IDs havingboth Maker and Checker rights.The utility would extract the details in TEXT format with fields separatedusing character. The file format of this report is given in Annexure III.Impact on Existing Groups and Users:1. The function rights of existing groups would remain unchanged. However,where both Maker-Checker rights have been given, on removing anyone right from a function, Administrator would not be allowed to givethe removed rights again. An alert message would be displayed to theAdministrator while removing such functional right.2. For existing user where both Maker as well as Checker rights have beenallocated, a warning message would be given for every login to DPMSystem. Administrator would be required to re-allocate proper groupsto this User ID. Report containing the list of such User IDs would beprovided to the administratorIt may be noted that from May 01, 2008 onwards, all the User IDs whichare not compliant to User ID policy & having both Maker & Checkerrights would be revoked and disallowed to login to DPMAS & GISMOapplication.IV. Power of Attorney module related developmentsa. Audit report for Individual POA Holder, Authorised Signatoryand Corporate POAThese reports would provide the audit trail of all the modificationsdone for Individual POA Holder, Authorised Signatory and CorporatePOA. This report would provide the name of field which is modified,its old and newly modified value, User ID that has carried out thechanges and date and time at which the modification was carriedout. Both reports can be generated based on POA ID range suchthat all the modifications done till date for the specified POA IDswould be reflected in the report.1. The audit report of Individual POA Holder and AuthorisedSignatory would provide the details of modification done inshort name, signature type, certificate details and status.2. The audit report of Corporate POA would provide the detailsof modification done in short name, no of AuthorisedSignatories required for signing and addition deletion ofAuthorised Signatories.It may be noted that both of these reports would beaccessible to existing as well as new users by default.[ 432 ]
. Export of mapping of client account to POADetailed Description:Participants were informed vide Circular No. <strong>NSDL</strong>/POLICY/2007/0054 dated September 22, 2007 about export utility for mappinginformation of account holder to Individual POA Holder / CorporatePOA / POA group. This export utility is provided in this versionrelease.c. View Signature screen to include "Minimum no. of AuthorisedSignatories required for signing"In Version no 7.0, a new screen was added for viewing the signaturedetails of Client and POA associated to each account holder. Thisscreen has been enhanced in Version 8.0 to show the "Minimumno of Authorised Signatories required for Signing" in case ofCorporate POA attached to the account holder.d. View holderwise POA mapping details in POA Signature DetailsscreenThe current signature screen shows the POA details for singleholder at a time. However, in case search is made for a Client IDhaving POA attached to account holders other than first holder,the screen shows pop up message as "Mapping does not exists" asthe first holder is selected by default in this screen. Since thismessage can mislead the user, this screen has been modified toshow POA mapping flags in separate table so that DP can checkPOA details of other holders in case such pop-up is received.In case of any clarifications, DPs may Contact Mr. Yogesh Parve /Mr. Harsh Kotak, Tel: 022-24994490/4487, Email:yogeshp@nsdl.co.in / harshk@nsdl.co.in for operational issues andHelpdesk for back office file formats or systems related issues.Annexure I1. Warning code added in Client Master Creation and PAN import utilitiesSr. No Error Code Description1 WAR00001 PAN Structure is Invalid2. File Format of Report Generation Utilitya. File Name: The nomenclature of file generated by this utility isas follows:InvalidPAN_MonDDYYYYHH.MM[AM/PM].txtWhereMonDDYYYYHH.MMAM is date and time at which this report wasgenerated.This file would be generated in the same directory from wherethe report generation utility is executed.b. Report File Format:Report file would be generated in TEXT format containing headerinformation and the detail records.File header would give total no of records extracted in the reportfile and the file generated date and time. Sample Record:[ 433 ]
File Generation Date and Time : File generation date and time [dd/Mon/YYYY hh:mm:ss]Total no of records: [total no of detail records extracted in file]Detail records would include following fields separated using character.Sr. Field Name Data Type Max DescriptionNoSize1. DP_ID Character 8 DP Id of DP executing the utility2. ClientId Integer 8 Client id having invalid PAN3. 1st_Hldr_PAN Character 30 First Holder's PAN4. 2nd_Hldr_PAN Character 30 Second Holder's PAN5. 3rd_Hldr_PAN Character 30 Third Holder's PAN6. Status Character 30 Current status of client accountSample Record:DP_ID ClientId 1st_Hldr_PAN 2nd_Hldr_PAN 3rd_Hldr_PAN Status----------- ---------- --------------- ----------------- ----------------- --------IN399992 10000004 12CDEFGHIJ ABCDEFGHIJ ActiveAnnexure IIFile Format of PAN Verification Utility:1. File Name: The nomenclature of file generated by this utility is asfollows:PAN[flag1][flag2][n].txtWhereflag1 is "DTL" in case of file generated for giving client detailsand blank if file is generated for <strong>NSDL</strong> site.flag2 is "R" in case of file generated for "Registered" client accountsand "M" in case of file generated for client accounts in other statii.n : running serial no in case multiple files are generatedFollowing folders would be created in the same directory from wherethe PAN verification utility is executed.a. "Results_Register_YYYYDDMMHHMMSS": This folder would containthe files generated for "Registered" client accounts and clientmodification requests Captured in DPMAS i.e. File names given inpoint no 1 and 2 in table 1.0.b. "Results_YYYYDDMMHHMMSS": This folder would contain the filesgenerated for client accounts in other statii i.e. File names givenin point no 3 and 4 in table 1.0.[ 434 ]
2. File Format of Enquiry file at <strong>NSDL</strong> Website (i.e. PANR1.txt /PANM1.txt):a. Input File Format forFILE DETAILSSr. Fields Data Size Mandatory Remarkno. Type (M/O)1 Line Sequence Number 6 M Running serial numberNumberfor each line in the file2 File Section Type Char 2 M "FD" by default3 PAN Char 10 MFILE TRAILERSr. Fields Data Size Mandatory Remarkno. Type (M/O)1 Line Sequence Number 6 M Running serial numberNumberfor each line in the file2 File Section Type Char 2 M "FT" by default3 File Type Char 5 M "EXTIN" by default4 Number of Detail Number 6 MRecordsb. Response File Format of Enquiry file at <strong>NSDL</strong> WebsiteParticipants are requested to refer Circular No. <strong>NSDL</strong>/POLICY/2007/0048 dated August 14, 2007.3. File Format of Client Details file (i.e. PANDTLR1.txt / PANDTLM1.txt):Report file would be generated in TEXT format containing headerinformation and the detail records.File header would give total no of records extracted in the report file,last export date & time and file generated date & time. Sample Record:File Generation Date and Time : File generation date and time[dd/Mon/YYYY hh:mm:ss]Total no of RecordsPAN Details extracted from: [total no of detail records extracted in file]: Last Export Date and Time [dd/Mon/YYYYhh:mm:ss]Detail records would include following fields separated using character.Sr. Field Name Data Type Max DescriptionNoSize1. ClientId Integer 8 Client id2. Holder_Type Character 15 Holder Indicator for which PAN isextracted. Valid Values are"First Holder", "Second Holder","Third Holder"3. Holder Name Character 135 Name of corresponding holder4. PAN Character 30 PAN of corresponding holder[ 435 ]
5. Creation(N)/ Character 30 "N" : If PAN is registered for firstModification(M)timeflag"M" : If PAN is modified(It may be noted that this flag canbe reflected as "M" even in file of"Registered" client accounts if it ismodified in Registered clientstatus.)6. Status Character 30 Current status of client accountSample Record:ClientId Holder_Type Holder_Name IT_PAN Creation(N)/ StatusModification(M)---------- -------------- ----------------- ------------ ------------------ --------10000004 First Holder Harshada ABCDE1219J N ActiveChavanAnnexure IIIFile Format of Report File generated for User ids violating Maker-CheckerPolicy.Report file would be generated in TEXT format containing the detail records.Detail records would include following fields separated using character.Sr. Field Name Data Type Max DescriptionNoSize1. User id Character 82. User Name Character 50 Name of User3. User Designation Character 154. User Department Character 105. Access Rights Character 1 Default ValuesL- Local & G- Global6. Group Name Character 507. Alternate Group Name Character 508. Alternate Group Date and 23 FormatEffective From Date time YYYY-MM-DDhh:mm:ss.0009. Alternate Group Date and 23 FormatEffective To Date time YYYY-MM-DDhh:mm:ss.00010. Authorization level Integer 211. User Status Character 1212. Last Login Date Datetime 23 Formatand TimeYYYY-MM-DDhh:mm:ss.00013. User Creation Date Datetime 23 Formatand TimeYYYY-MM-DDhh:mm:ss.000[ 436 ]
Circular No.Sub: Release of Version 7.0 and its features<strong>NSDL</strong>/POLICY/All Depository Participants (DPs) are hereby informed that Version 7.0 of the2007/0061 DPM Application Software (DPMAS) will be released on October 5, 2007. TheDate: October 5, 2007 Power of Attorney (POA) module informed to DPs vide Circular No. <strong>NSDL</strong>/POLICY/2007/0054 dated September 22, 2007 will be released in version 7.0of DPMAS. The software would be released in phases to all DPs. Softwarerelease schedule would be communicated to the DPs by PMC.Additional features of Version 7.0The features of this version release are as follows:A. POA RegistrationB. System Security EnhancementsC. Transaction Statement (SOT) for closed accountsThe details about these versions are given below:A. POA Registration:POA features, informed to the DPs vide our aforesaid circular, wouldalso include the following1. POA Holder(s)/Authorized Signatory (ies) Master list report andCorporate POA reports are provided under Master List reports.These reports provide the list of POA holder/authorized signatoryas well as the list of corporate POAs registered in the system.2. Additions / Modification through Interactive screens on DPMASa. Interactive Screens have been provided in ClientMaintenance Module to capture and modify;i. POA Holder / Authorized Signatoryii. Corporate POAiii. Mapping POA to beneficiary account at a holder levelb. The screens for client creation in client maintenance modulehave been modified to enable attaching the POA details tothe client account.c. Additional functional rights have been added in systemsecurity module. DPs are advised to give the functional rightsto the users for conducting different operations of the POAmodule.d. Additional menu button to view signatures of POA has beenadded, in the common menu buttons, to view signature ofthe authorized signatory/POA Holder, on various screens ofDPMAS where a DP executes a transaction. This screen willalso show account holders signatures.3. Exception reports are also provided as follows :a. Authorized signatories not associated with any POA ID:This report enables DP to monitor whether there is any[ 437 ]
authorised signatory, which has been created in DPMAS butnot associated with any POA ID.b. POA ID not associated with any clients:This report enables DP to monitor whether there is any POAID, which has been created in DPMAS but not associatedwith any client account.c. POA IDs without authorised signatories:This report enables DP to monitor any corporate POA IDs,which does not have any active authorized signatoryassociated with the POA ID i.e., when all the authorisedsignatories, which are associated with the POA ID, are eitherin closed status or detached from POA ID.d. Expiry details of digital signature certificate:This report provides the expiry details of the digital signaturecertificates used by the POA ID.e. Client account holders to which blank POAs are attached:This report provides the details of the account holders, whichare mapped, to POAs whose POA IDs does not have any activeassociated authorized signatory or POA ID is deactivated orPOA Holder is deactivated.Operating Instructionsa. As provided with all other instruction submission features, facility ofmaker & checker is provided for POA registration also. Though a usercan be assigned functional rights for both maker (capture) as well aschecker (Verify Release), as a matter of good practice DPs are advisedto allocate maker and checker rights to different users.b. DP has to ensure that the minimum number of authorized signatoriesrequired for authorizing an instruction should be less than or equal tothe number of authorized signatories registered for that POA.c. DP should monitor the status of POA or the authorized signatory toensure that POA IDs are active in the system while executing transactionin DPMAS from the facility to view the POA signatures provided on variousscreens of DPMAS.d. DPs are advised to maintain POAs by detaching all deactivated POA IDsand POA Holders from client accounts as well as detaching closedauthorised signatory from POA IDs.For any clarification with respect to POA Registration, DPs arerequested to get in touch with Mr. Harsh Kotak / Mr. Yogesh Parve on022-24994487/24994490 or email id-harshk@nsdl.co.in /yogeshp@nsdl.co.inB. System Security Enhancements:The current DPMAS provides facility for User ID creation andmaintainence, change of password (voluntary) and access control todifferent functions defined in DPMAS. The system is now being enhanced[ 438 ]
to enable DPs to define policies for userid and password. Facility is alsoincluded to define multiple administrators.This version features system enforced policies for User ID and passwordcomplexity, expiry, history etc. to help DP to implement good practicesconcerning user authentication. In order to achieve this, DPs are advisedto design and implement adequate procedures in line with the enhancedsystem security module of DPMAS.The system is also enhanced to maintain the session information forevery user logged on to DPMAS. It would allow DP to configure multipleadministrator ids in DPMAS. The Module would also provide new reportsgiving master information of User IDs, User Groups, changes to thesame and user session information.The enhanced secuirty policy for User ID and password would be installedwith default parameters which can be modified by DPs to best suittheir organisational security requirements.The following logical access controls would be enforced on all User IDscreated by administrators in DPMAS.1. User ID Policy:Rules for creating User ID :.a. The length of User ID should be within the range of minimum andmaximum values defined in security configuration details.b. User ID can comprise only alphabets (A-Z) (case insensitive), onlynumerals(0-9) or combination of both. Special characters, ie anycharacters other than those mentioned above, would not beallowed.c. The existing User IDs which are not compliant to aforesaid criteriawould remain active in the system even after the new softwareversion is applied on DPMAS. However, an alert message “Youruser id is not adhering to the standards. Please contact youradministrator to revoke this id and assign new one” would bedisplayed to these users after every login in DPMAS. Systemadministrator of DPs are advised to revoke such ids and allot newids to these users at the earliest. An exception report in text fileformat would be provided as a part of this version release toidentify such invalid ids. Upon executing ExceptionReport.bat filein “C:\Exeception_Report_Invalid_Userid” directory on C drive,the report would be generated in the same folder. Complianceofficer will monitor this exception reportd. Inactive users which are not logged on to either DPMAS or GISMOapplications since specific number of days (as per the configurationparameter given below) would be automatically blocked in DPMASat next Beginning Of Day (BOD). Only administrator can thenactivate such User-Ids.Configurable Parameters :The table given below lists various configuration parameters applicableto User IDs. These parameters can be set by DP to suit its organizationalneeds. However, the parameter would be bound by the minimum fixedthreshold values supplied along with installation of the software. Forexample, fixed threshold value for ‘Minimum length’ of User ID would[ 439 ]
e set to 3. Whereas DP would be able to define their own minumumlength for User IDs, it cannot be less than 3 characters.Sr Parameter Description Measured Threshold Rules forNo Name in terms of Value setting newvalue by DP1 Minimum Minimum Number of 3 New valueLength Length of Characters should beUser IDgreater thanor equal toThresholdValue2 Maximum Maximum Number of 8 New valueLength Length of Characters should beUser IDless than orequal toThresholdValue2. Password PolicyRules for defining Passwords :a. The length of the password should be within the range of minimumand maximum values defined in the security configuration details.b. The password should mandatorily contain any of the followingtwo character sets.i. Alphabets [A-Z] (case insensitive)ii. Numerals [0-9]iii. Special Charactersc. The password should contain the minimum ‘X’ number ofcharacters from a character set where ‘X’ is defined as minimumnumber of characters for the respective character set in SecurityConfiguration Details. For example, if 2 alphabets have beenconfigured as ‘minimum characters’ for the character set‘Alphabets’ then the password should contain alteast 2 alphabets.d. DPMAS would allow only specific special characters in password.Special characters for this purpose would be configurable inSecurity Configuration Details against the parameter - ‘SpecialChar Allowed’ .e. The password would expire after specific number of days of lastpassword change date. Upon expiry, user would be forced tochange the password. The number of days for password expirywould be configurable in Security Configuration Details againstthe parameter ‘Lifetime of Password’ .f. Warning messages for password expiry will be displayed beforespecific number of days from the date of password expiry. Thesewarnings would be displayed every time the user logs in usingthat User ID. The number of days can be configured againstparameter ‘Reminder Time Period’.g. The User ID would be locked on specific number of consecutive[ 440 ]
unsuccessful login attempts. The number of unsuccesful attemptsallowed would be defined in Security Configuration Details againstparameter ‘No. of unsuccessful attempts’. Only administratorwould be allowed to unlock the User ID.h. The history of previous passwords of each User ID would bemaintained in DPMAS. The number of passwords which would berecorded in DPMAS would be configurable in Security ConfigurationDetails against parameter ‘Password Change History’. Neither theuser, nor the administrator can use these passwords as the newpassword.i. The user would not be allowed to change the password twice inthe same day. However administrators can reset the password toenable uninterrupted functioning of UserID.j. The system would force the user to change the password at firsttime log-in under following scenariosi. When a new User ID is created, the default password wouldbe set same as ‘User ID’. User would be forced to changethe password on first log in.ii On activation of a suspended, blocked as well as lockedUser-id by administrator, system would force the user tochange password on first login after reactivation. User mayuse the old password to identify himself/herself beforechanging the password.iii Administrator overrides the password of the user-id.DPs are advised to ensure that owner of the User ID changes the passwordimmediately under all the aforesaid scenarios.Default Values of Configurable Parameters and allowable valuesThe table given below lists various configuration parameters applicableto password. These parameters can be set by DPs to suit theirorganizational needs. However, the parameter would be bound by thefixed threshold values supplied along with installation of the software.For example, fixed threshold value for ‘Minimum length’ of passwordwould be set to 8. Where as DP would be able to define minumumlength for password, it cannot be less than 8.Sr Parameter Description Measured Threshold Rules forNo Name in terms of Value set setting newby <strong>NSDL</strong> value by DP1 Minimum Minimum Number of 8 New valueLength length of characters should bepasswordgreater thanor equal toThresholdValue2 Maximum Maximum Number of 16 New valueLength length of Characters should bepasswordless than orequal toThresholdValue[ 441 ]
3 No. of Minimum Number of 2 New valueAlphabets number of alphabets should bealphabetsgreater thanrequired inor equal topasswordThresholdvalue.Applicable ifalphabets arechosen forthe password.4 No of Minimum Number of 1 New valueNumerals number of Numerals should benumeralsgreater thanrequired inor equal topasswordThresholdvalue.Applicable ifnumerals arechosen forthe password.5 No of Minimum Number of 1 New valueSpecial number of Characters should beChars special greater thancharactersor equal torequiredThresholdin passwordvalue.Applicable ifspecialcharactersare chosenfor thepassword.6 No of un- Number of Number of 5 New valuesuccessful unsuccess- attempts should beattempts ful login less than orattemptsequal towith wrongThresholdpasswordvalueafter whichthe User IDis blocked.7 Life Time Number of Number of 60 days New valueof days from days should bePassword last login, less than orafter whichequal totheThresholdpasswordvaluewould bemarkedexpired[ 442 ]
8 Reminder Number of Number of 10 New valueTime days before days should bePeriod password greater thanexpiry, fromor equal towhen theThresholdwarningvaluemessage isdisplayed9 Block If User ID is Number of 60 days New valuePeriod not used for days should benumber ofless than ordaysequal tomentionedThresholdas blockValueperiod, theUser IDswould beblockedin DPMAS10 Password Number of Number of 5 New valueChange passwords passwords should beHistory remembered greater thanby systemor equal tosuch thatThresholdnewvaluepasswordcannot beone of thesepasswords11 Special List of List of !@#$%^&* New valueChar special special ()_-+ = | \ should be anyAllowed characters characters { } [ ] : characterwhich ;,.?/” within thewould becharacter setallowed indefined inpasswordthresholdvalue3. Multiple Administrator ids.After this version release DPMAS would permit DP to define multipleadministrator User IDs.a. The existing “Admin” User ID would remain as is and would act asSuper administrator id. The functional rights of this User ID wouldbe retained as it is. In addition, more administrator User IDs canbe created by ‘Admin’ User ID.b. The following table lists major differences in functional rights of‘Admin’ user and new administrator User Ids[ 443 ]
Functional Rights Admin UserGISMO FunctionsMessage Control Allowed AllowedPanelNew AdministratorCommunication Allowed AllowedBack-Office Transaction Import All import andand Bulk Verify/ export functionsRelease not allowed. would be DisallowedRest of import andexports would beallowed.Shut Down Allowed AllowedSystem Security Registration and Registration andMaintainence of both maintainence ofAdministrator and only functionalFunctional User IDs users ids would bewould be allowed allowedAdministrative Allowed AllowedToolsInquiries Allowed AllowedInstruction Disallowed DisallowedCapturing andVerify/ReleaseReports Only System Security Only Systemrelated reports would Security relatedbe availablereports would beavailableSetting User-id/ Yes YesPassword policyc. The password polices would be applicable to both ‘Admin’ useras well as new administrator ids. However following rules for‘Admin’ user would differ from other User IDs,i. Admin User ID would not be locked on unsuccessful loginattempts due to incorrect passwordsii. There would not be any restriction on number of times thepassword can be changed for Admin User ID in a day.iii. Password change of Admin User ID would not be enforcedafter version release.d. User ID policies would be applicable to only new administrator.Super Administrator would be exempted from this policy.4. Session Information:After this version release, Session information such as login-id used,log-on timestamp, log-off timestamp and the terminal name would berecorded in DPMAS. DPMAS would record the logoff timestamp only ifuser logs off gracefully from the session. The system would also maintainthe information regarding the unsuccessful login attempts such as log-[ 444 ]
in id, log-in timestamp and terminal name. The information of bothsuccessful and unsuccesful log-in attempts would be provided toAdministrators in the form of report.5. Reports:The application would provide the following reports to theadministrators. These reports would not be available to functional users.1. User Profile Report: This report would provide the details of allUser IDs registered in DPMAS along with their activation,suspension, deactivation dates and its current status. Report canbe generated based ona. User ID rangeb. Status of User IDc. Date range of user creationd. Combination of any of above parameters.2. Group Access Rights Report : This report would provide the detailsof groups registered in DPMAS along with the access rights and itscurrent status. Report can be generated based on the group idrange.3. Audit Report : This report would provide three options to generatethe report giving audit details of changes in user profile and usergroupa. Audit Report of User Profile: This report would provide thedetails of changes in group, alternate group allocation-deallocationand status of User ID. DP can generate the reportbased oni. User ID rangeii. Date range of modificationiii. Combination of both.b. Audit Report of User Group: This report would provide thedetails of changes in name and status of user groupregistered in DPMAS. DP can generate the report based oni. Group Id rangeii. Date range of modificationiii. Combination of both.c. Audit Report of Functional Rights: This report would providethe details of changes in Functional rights of user groupregistered in DPMAS. DP can generate the report based oni. Group Id rangeii. Date range of modificationiii. Combination of both.4. Session information report: This report would provide the logindetails of various User IDs. DP can generate this report based ona. User ID rangeb. Application Name (<strong>NSDL</strong>-DPM and GISMO)c. Login date ranged. Combination of all above.It would also provide an option to generate report for failed loginattempts only.[ 445 ]
Important Note:Depository Participants are requested to note the following points:1. After version release, all User IDs would be forced to change thepassword. It is therefore suggested that the user involved ininstruction capturing and verify/releasing logs-in immediately afterthis release is applied on server.2. The last log-on timestamp of all the existing User IDs would be set tocurrent date and time during this version release. This logon timestampwould be reflected in “User Profile Report” as “User Last Login Date”.For any clarification with respect to system security module, DPs arerequested to get in touch with helpdesk.C. Transaction Statement (SOT) for closed accounts<strong>NSDL</strong> has vide circular <strong>NSDL</strong>/POLICY/2006/0014 dated May 11, 2006 hasadvised DPs to provide the Statement of Transaction (SOT) to client,which has requested for closure of the account, for the period from thebeginning of the quarter in which the account is closed till the date ofclosure. In this regard, in the version 7.0 of DPMAS, a new check boxhas been provided with respect to SOT in the input screen of the reportto extract SOT of only closed client accounts. DPs are advised to providethe date range to extract the SOTs for the closed accounts.For any clarification with respect to SOT for closed accounts, DPs arerequested to get in touch with Mr. Harsh Kotak on 022-24994487 oremail id - harshk@nsdl.co.in.PAN Import Utility to upload PAN detailsCircular No.Sub : PAN Import Utility on DPM System to upload PAN details of the<strong>NSDL</strong>/POLICY/Beneficial Owner(s)2006/0029 Attention of Participants is invited to our circular no. <strong>NSDL</strong>/POLICY/2006/Date: July 21, 2006 0007 dated March 3, 2006 wherein Participants were informed about the SEBIdirective on Permanent Account Number (PAN) and subsequent circular no.<strong>NSDL</strong>/POLICY/2006/0018 dated June 9, 2006 regarding utility to extract detailsfrom DPM Application Software (DPMAS) server in respect of PAN details ofBeneficial Owners.<strong>NSDL</strong> will be providing a PAN import utility that would enable the Participantsto update PAN and PAN Flag pertaining to Clients [Beneficial Owner(s)] in theDPMAS, in bulk. Present bulk verify release facility for Client modificationwould be used to Verify Release such records.The file format for PAN import utility is enclosed (Annexure I). Upon importingthe file using the utility, one/two/three output file(s) may be generated.The details of the utility are described hereunder.(I) Features of the PAN import UtilityPAN import utility would enable the Participants to update 'PAN and/orPAN flag' for the account holder(s) of a beneficiary account.Salient features of the utility :1) Holder indicator is mandatory. Permitted values are indicated inthe file format.2) PAN and/or PAN flag can be updated for one or more holders of anaccount in a single record. Fields of PAN / PAN flag for a holdershould be kept blank if data for that holder is not required to beupdated. For such fields, existing values in DPMAS would beretained as is.[ 446 ]
(II)(III)3) Account holders whose PAN is to be updated must have PAN flagas 'Y', which implies that only valid PAN, after due verification,are being imported through the utility.4) The input file should not contain records in respect of those Clientswhose Client modification is/are pending in DPMAS.5) In case of modification through the utility whose PAN flag is already'Y' in DPMAS, entire record will be rejected. Such modificationscan be carried out manually directly through DPMAS.6) Each file can have a maximum of 5000 records and Participantsshould not upload more than three files in a day. However, inorder to expedite the process, Participants would be allowed toupload more than three files on Saturdays and bank holidays. Forthis purpose, Participants are advised to get in touch with <strong>NSDL</strong>helpdesk. Participants should ensure that time critical instructionsare executed well before starting the upload of PAN details.7) The functional user availing the rights for Client Modificationimport, shall by default get the rights to import PAN details throughPAN import utility.8) Participants who do not have back-office may prepare requireddata in excel format as per the prescribed template (formatenclosed as Annexure II). <strong>NSDL</strong> will provide a utility to convertthis excel worksheet into an importable file which can then beimported using PAN import utility. Detailed procedure to use thisutility would be provided along with the release.Features of OUTPUT filesUpon successfully importing of a file through PAN import utility, thefollowing output files may be generated:(1) Report File : On successful upload of PAN details, report filegiving the Client details of those clients whose PAN details havebeen successfully captured shall be generated (format providedin Annexure III).(2) Error File : Records rejected for the reason of not fulfilling thepre-requisites listed above shall be reported in this file (formatprovided in Annexure IV).(3) Response File : This file will contain the Client informationrequired for bulk, verify and release. Response file should beused as input to the bulk verify release executable for clientmodification of DPMAS (format provided in Annexure V)Participants who are availing the facility of bulk verify & releasefor Client Modifications by default shall get the rights to carryout bulk verify and release for modifications imported throughPAN import utility. However, Participants who do not currentlyhave the facility of bulk verify and release but wish to avail thefacility, may request <strong>NSDL</strong> to enable this facility for this limitedfunction through their Compliance Officer with a declaration thatadequate maker/checker control has been exercised for updationof PAN & PAN flag.ProcessParticipants are expected to follow the process as given below[ 447 ]
1. Import PAN and PAN flag in the required format, through PANimport utility2. Check the error file for rejections. Participants may update suchrejected PAN and PAN flags, if required, through a separate file.3. Confirm details provided in report file with those submitted inimport file.4. If verification is successful, i.e. all the imported values matchthe intended modification values, use response file to carry outbulk verify and release of modifications imported through PANimport utility. Further, Participants are requested to verify theupdated PAN details via Client Master Report or incremental ClientMaster Export.(IV) Scheduled date for Release of PAN utility :The utility is scheduled to be released to Participants in the secondweek of August 2006. The scheduled date for release will be sent to theParticipants by <strong>NSDL</strong> Help Desk (PMC Department).Participants are advised to strictly follow the guidelines issued by <strong>NSDL</strong>vide various circular on PAN and ensure that the PAN details are capturedin the DPMAS only after they are duly verified with the Income TaxDepartment website.Software utilities for making queries in DPM systemCircular No.Sub : Software utilities for making queries in DPM system<strong>NSDL</strong>/POLICY/This is in continuation with <strong>NSDL</strong> circular no. <strong>NSDL</strong>/POLICY/2006/0042 dated2006/0057 September 23, 2006 and circular no. <strong>NSDL</strong>/POLICY/2006/0047 dated OctoberDate: November 24, 16, 2006 wherein utilities (consisting of various queries) were provided to2006 Depository Participants (DPs). The circular further stated that the incrementalutility would be released to the DPs later. This remaining utility (consisting ofincremental queries) is being issued on November 24, 2006 by <strong>NSDL</strong> Helpdesk(PMC Department) along with the operating procedure for running the utility.This utility will give an output of probable data entry errors made duringspecified time period.DPs are advised to run the 'incremental' utility at periodic intervals but notlater than a monthly basis. The output of the queries will be only for thespecified time period provided by DPs at the time of running the utility. Theoutput generated will have the list of clients which are in the status 'Active','Suspended for debit' or 'Suspended for debit and credit'. DPs are advised topreserve the printout of the output of the queries and necessary remarkswith respect to action taken by them. DPs are also advised to make suitableremarks with respect to the date on which change was made in the systemand the name and initials of the person who has made such changes.Internal Auditors of the DPs are advised to verify the action initiated by theDPs and make suitable comments in the quarterly internal audit reportssubmitted by them including the periodicity of running the utility. Internalauditors may also request DPs to run the query while conducting the auditand satisfy themselves with respect to the output as well as the action takenby the DPs.'The logic for the queries in the utilities will remain the same as stated in theabove mentioned circulars .The list of queries (incremental) and the ouputthereof is given below :[ 448 ]
1. Incorrect Pin codes in Client Address details:The output will provide the list of client accounts opened during thespecified time period where incorrect pincode in client address wasentered. In addition, the output will also provide all such client accountswhere incorrect pincode was entered in client address while makingchanges in the client master details during the specified time period.2. Incorrect Pin codes in bank address details:The output will provide the list of client accounts opened during thespecified time period where incorrect pincode in bank address wasentered. In addition, the output will also provide all such client accountswhere incorrect pincode was entered in bank address while makingchanges in the client master details during the specified time period.3. Client accounts with standing instruction (SI) disabled :The output provides list of all such client accounts opened during thespecified time period where SI is disabled (not ticked in DPM). In additionthe output will also provide all such client accounts where SI has beendisabled while making changes in the client master details during thespecified time period. Further, the outputs have been bifurcated asunder:a) Client accounts opened in 'resident' category with standinginstruction disabled.b) Client accounts opened in 'non-resident' category with standinginstruction disabled.4. List of Client accounts which are opened in the name of "And Sons":The output will provide the list of client accounts opened during thespecified time period where the client account have been opened inthe name of "And Sons".5. List of Client accounts opened for more than three Holders :The output will provide the list of client accounts opened for morethan three Holders during the specified time period.6. List of Client accounts opened for more than three Holders and SIenabled:The output will provide the list of client accounts opened for morethan three Holders with SI enabled during the specified time period. Inaddition, the output will also provide all such client accounts where SIwas enabled while making changes in the client master details duringthe specified time period.7. Bank address details not entered as per <strong>NSDL</strong> requirements:The output will provide the list of client accounts opened during thespecified time period for which fourth row in bank address line was leftblank. In addition, the output will also provide all such client accountswhere fourth row in bank address line was left blank while makingchanges in the client master details during the specified time period.8. List of client accounts where the first holder is a Minor and theaccount is opened with a Joint holder :The output will provide the list of client accounts opened during thespecified time period where the first holder is a Minor and the accountis opened with a Joint holder. In addition, the output will also provideall such client accounts with joint holding where the option 'guardian'[ 449 ]
instaed of nominee has been chosen while making changes in the clientmaster details during the specified time period.9. List of 'HUF' accounts opened under a different type-subtype:The output will provide the list of client accounts opened during thespecified time period with suffix 'HUF' in the name of the account holder,but the account has been opened in any sub-type other than 'HUF' inDPM.10. List of demat accounts opened in the 'corporate' category in jointholder:The output will provide the list of client accounts opened in corporatecategory in joint holder during the specified time period.11. List of corporate Accounts opened which are probably not corporateaccounts:The output will provide the list of client accounts opened during thespecified time period where the word 'limited' or its variants are notfound in the First Holder Name.Circular No.Sub : Software utilities for making queries in DPM system<strong>NSDL</strong>/POLICY/This is in continuation with <strong>NSDL</strong> circular no. <strong>NSDL</strong>/POLICY/2006/0042 dated2006/0047 September 23, 2006 wherein three utilities were provided to DepositoryDate: October 16, Participants (DPs). The circular further stated that other utilities will be2006 released to the DPs later. These remaining nine utilities are being issued onOctober 17, 2006 by <strong>NSDL</strong> Helpdesk (PMC Department). These utilities(consisting of queries) will give an output of probable data entry errors madein the past. The utilities to run the queries and generate the output onincremental basis will be released to DPs later.DPs are advised to run 'full' utility for the first time and then run the'incremental' utility at periodic intervals, say each month. The operatingprocedure for running the utility will be sent by <strong>NSDL</strong> Helpdesk (PMCDepartment). The output generated will have the list of Clients which are inthe status 'Active', 'Suspended for debit' or 'Suspended for debit and credit'.DPs are advised to preserve the printout of the output of the queries andnecessary remarks with respect to action taken by them. DPs are also advisedto make suitable remarks with respect to the date on which change wasmade in the system and the name and initials of the person who has madesuch changes.Internal Auditors of the DPs are advised to verify the action initiated by theDPs and make suitable comments in the quarterly internal audit reportssubmitted by them. Internal auditors may also request DPs to run the querywhile conducting the audit and satisfy themselves with respect to the outputas well as the action taken by the DPs.A list of utilities, their usefulness and the manner in which these utilitiesshould be used is given below:1. Client accounts with standing instruction (SI) disabled :Standing instruction is a facility which ensures the credit of securitiesthrough account transfer instructions (including inter depository transferinstructions) in the Client's accounts without specifically giving a receiptinstruction to the DP. It is found that in some cases, the SI is found to bedisabled. This query will give a list of all such accounts where SI isdisabled (not ticked in DPM). Further, the query has been bifurcatedinto two sub-queries for ease of the DPs. The details are given below.[ 450 ]
a) Client accounts opened in 'resident' category with standinginstruction disabled :Generally, it is found that the SI is enabled in DPM. The output ofthe query will give the list of all such Clients which have beenopened in 'resident' category where SI is disabled. After gettingthe output, DPs should verify the same from account openingforms/Clients and make necessary corrections in the DPM system,if necessary, after requisite documentation.b) Client accounts opened in 'non-resident' category with standinginstruction disabled:It has been observed that in some cases, DPs disable SI indicatorfor NRI Client accounts. The output of the query will give the listof all such Clients which have been opened in 'non-resident'category where SI is disabled. After getting the output, DPs shouldverify the same from account opening forms/Clients and makenecessary corrections in the DPM system, if necessary, afterrequisite documentation.2. List of Client accounts which are opened in the name of "And Sons":As all DPs are aware, a demat account cannot be opened in the name ofproprietorship firm / partnership firms. E.g. a demat account cannotbe opened in the name of XYZ & Sons. The output of the query will givethe list of all Client accounts, other than Clearing Member accounts,where the word "SONS" appears in the First Holder's Name. However,this list will also give the names of Clients like 'Mother'sons' Sumi Ltd'where word 'sons' appear. Further, a demat account holding 'commodities'is permitted to be opened in the names of proprietorship firm /partnership firms. The names of such Clients would also appear in theoutput. Therefore, after getting the output, DPs should verify the samefrom account opening forms and initiate necessary action with respectto closure of account, wherever applicable.3. List of Client accounts opened for more than three Holders :<strong>NSDL</strong>, vide its circular no. <strong>NSDL</strong>/PI/99/231 dated April 08, 1999 issuedclarification with respect to the manner in which the demat accountfor more than three holders need to be opened. The output of thisquery will give list of all such demat accounts where the account hasbeen opened for more than three holders. DPs should verify the samefrom account opening forms and ascertain whether the account openedis indeed for more than three holders.4. List of Client accounts opened for more than three Holders and SIenabled:<strong>NSDL</strong>, vide its circular no. <strong>NSDL</strong>/PI/99/231 dated April 08, 1999 advisedDPs that in case of such accounts, SI should not be enabled. The outputof this query will give list of all such demat accounts where the accounthas been opened for more than three holders with SI enabled. DPsshould verify the same from account opening forms in order to verifywhether the account opened is indeed for more than three holders andinitiate necessary action with respect to disabling the SI.5. Bank address details not entered as per <strong>NSDL</strong> requirements :<strong>NSDL</strong>, vide, its circular no. <strong>NSDL</strong>/PI/2000/2295 dated December 20,2000 advised DPs to enter the bank details in the manner specified inthe circular. The circular stated that the city name should be entered[ 451 ]
in the row 4 of the bank address details. However, it is observed that inmany cases DPs do not capture the city name in fourth row and leavethe same blank. The query will list all such Client accounts for whichfourth row in bank address line is left blank. DPs should ensure that thecity name is captured in the fourth row by deleting the same if it hasbeen entered in any other row.6. List of Client accounts where the first Holder is a Minor and the accountis opened with a Joint Holder :As all DPs are aware, a demat account for a minor needs to be openedas a single holder and to be operated by guardian. However, manyinstances are observed where an account of minor is opened alongwiththe joint holder. While generating the output, a query will run whereDP has selected an option of 'guardian' and is a joint holder account.However, is some cases, it is observed that if the nominee is minor, DPsselect 'guardian' and enter minor's date of birth in the relevant columngiving the wrong picture that it is a minor with joint holding account.Therefore, DPs should verify the account opening forms before takingan action.7. List of 'HUF' accounts opened under a different type-subtype :The output of this query will give all such accounts with suffix 'HUF' inthe name of the account holder, but the account has been opened inany sub-type other than 'HUF' in DPM. The list will also give the namesof Clients like 'HUFfrish Cyril Pinto' where word 'HUF' appears. In suchcases, based on the output and after verification of account openingforms, DPs should initiate to close the accounts and open the accountsunder correct sub-type without any suffix after the name of the Karta.8. List of demat accounts opened in the 'corporate' category in joint holder:Generally, a account in the category of 'corporate' is found to be openedas a single holder though demat accounts are permitted to be openedin joint holder capacity. The output of this query will give the list of allsuch Clients where accounts which are opened in corporate category injoint holder. DPs are advised to verify the same from account openingforms as it has been observed that sometimes, the corporate accountsare opened where the names of authorized signatories are erroneouslyentered as the joint holders instead of entering the names in 'signatories'panel in DPM. In such cases, based on the output and after verificationof account opening forms, DPs should initiate the closure of suchaccounts where the names of 'authorized signatories' have been enteredas joint holders and open the accounts in name of the Corporate.9. List of corporate Accounts opened which are probably not corporateaccounts :It is observed that in most of the cases, an account opened in 'corporate'category will have a word 'Limited' (and its various variants like 'Ltd.','L. T. D.' etc.) in the name. However, sometimes, it is observed that anaccount opened in the corporate category are opened without having aword 'limited' or its variants. The output of this query will give list of allsuch 'corporate' Client accounts where the word 'limited' or its variantsare not found in the First Holder Name. Therefore, the output generatedneeds to be verified with the account opening forms and necessaryaction, if any to be initiated with respect to closure of this account andopening the account in correct category.[ 452 ]
Circular No.Sub : Software utilities for making queries in DPM system<strong>NSDL</strong>/POLICY/2006/ As all Depository Participants (DPs) are aware, <strong>NSDL</strong> officials visit DPs' offices0042 twice a year. During these visits, <strong>NSDL</strong> officers provide to the DP a list of dataDate: September 23, entry errors which can be rectified by DPs.2006 As these visits are conducted twice a year, it is felt that DPs should be enabledto monitor such errors through relevant software utility (consisting of variousqueries) and rectify the same, wherever necessary. For this purpose, basedon experience gained during visits at DPs' offices, <strong>NSDL</strong> has compiled a list ofsuch utilities.One such utility (consisting of three queries) will be released to the DPs forusage on September 23, 2006 by <strong>NSDL</strong> Helpdesk (PMC Department). Otherutilities (consisting of some more queries) will be released to the DPs later.The utility being released alongwith this circular will give an output of probabledata entry errors of the past. It is also proposed to provide utilities to runqueries and generate output on incremental basis.DPs are advised to run 'full' utility for the first time and then run the'incremental' utility at periodic intervals, say each month. The operatingprocedure for running the utility is enclosed as Annexure I. The outputgenerated will have the list of Clients which are in the status 'Active','Suspended for debit' or 'Suspended for debit and credit'. DPs are advised topreserve the printout of the output of the queries and necessary remarkswith respect to action taken by them. DPs are also advised to make suitableremarks with respect to the date on which change was made in the systemand the name and initials of the person who made such changes.Internal Auditors of the DPs are advised to verify the action initiated by theDPs and make suitable comments in the quarterly internal audit reportssubmitted by them. Internal auditors may also request DPs to run the querywhile conducting the audit and satisfy themselves with respect to the outputas well as the action taken by the DPs.A list of utilities being provided with this circular, their usefulness and themanner in which these utilities should be used is given below:1. Hindu Undivided Family (HUF) demat accounts with joint holdings:As DPs are aware, a demat account for holding shares of HUF can beopened only in the name of Karta and it cannot be a joint account.(Circular no. <strong>NSDL</strong>/PI/2002/1346 dated August 12, 2002). Accordingly,DPM system restricts entry of joint holder names in HUF category ofaccounts from October 13, 2001. However, it has been observed that inthe demat accounts opened prior to that date, a few HUF accountswere opened in joint names. These accounts are still in active status.This query will give a list of all such HUF accounts opened with jointholdings. DPs are advised to close these accounts and open new accountsas stated in the above-mentioned circular. This utility needs to be runonly once and based on such report, action should be taken by DPs.2. Incorrect Pin codes in Client Address details:The output of this query will identify incorrect pin codes. For thispurpose, all pin codes which are less than 100000 and/or greater than880000 will be listed. Further, the output will not generate the namesof Clients where category is 'Non Resident Indian (NRI)/Foreign National'.After getting the output, DPs should verify correct pincodes from accountopening forms/Clients and make necessary corrections in the DPMsystem.[ 453 ]
3. Incorrect Pin codes in bank address details:The output of this query will identify incorrect pin codes in bank details.For this purpose, all the pin codes which are less than 100000 and/orgreater than 880000 will be listed. Further, the output will not generatethe names of Clients where category is 'NRI/Foreign National'. Aftergetting the output, DPs should verify correct pincodes from accountopening forms/Clients and make necessary corrections in the DPMsystem.Annexure IOperating Procedure for running the utilityPlease follow the procedure given below to install the utility on the DPMserver.1. Zipped File "DP_Reports_For_DPs" is to be placed on the C drive of theserver2. Unzip the file3. On Unzipping the file DP_Reports folder will be created in C drive ofthe server4. Inside DP_Reports folder two folders will be presentBatch_FilesReports5. To create the above mentioned reports at any time, Double_Click.batfile should be double clicked.6. Both the above reports would appear in the Reports folder7. The naming convention of the files are as given below:"query_name(fixed)_date(variable).txte.g: Bank_Addr_Invld_Pincode_Aug1020062.19PM.txtClnt_Addr_Invld_Pincode_Aug1020062.19PM.txtHUF_Acct_with_sec_thrd_hldr_Aug1020062.19PM.txt .Caution to be exercised while executing freeze in Client accounts using Freeze UtilitiesCircular No.Sub : Caution to be exercised by DPs at the time of executing freeze in<strong>NSDL</strong>/POLICY/Client accounts using Freeze Utilities2006/0062 As all Depository Participants (DPs) are aware, “in case the demat accountDate: December 20, holder(s) fail(s) to submit the PAN details to the DPs by December 31,2006 2006 or there are discrepancies in the PAN details that are not resolvedby December 31, 2006 such accounts should be ‘Suspended for Debit’until PAN details are verified and updated at the DPM Application Software(DPMAS)”. DPs are requested to refer <strong>NSDL</strong> Circular No.<strong>NSDL</strong>/POLICY/2006/0043 dated September 27, 2006 and various other circulars issued, in thisregard.Attention of DPs is also invited to Circular No. <strong>NSDL</strong>/POLICY/2006/0051 datedOctober 19, 2006 wherein general features to operate the freeze utilitieswere informed to the DPs. <strong>NSDL</strong> Help Desk (PMC Department) will shortlyrelease the freeze utilities as well the operational manual containinginstructions to operate the freeze utilities.Details of Freeze generated by the two Utilities - Bulk Account Freeze andFile Converter:(a) Freeze level will be for “Suspended for Debit”[ 454 ]
(b) Freeze reason will be “Request by Statutory Authority”(c) Freeze description will be “PAN Pending-SEBI Cir”(d) User remark field will be “Through Freeze Import”(e) Execution date of the freeze will be “January 1, 2007”.The guidelines for executing freeze instructions is broadly divided into threeparts viz. system, operational and general guidelines & obligations. DPs areadvised to strictly follow the guidelines as given below :(I) System Guidelines :1) The response file generated by the two utilities i.e. Bulk Freeze andFile Converter will carry the batch id in sequence to the last batch iduploaded in respect to the instructions/client modification/ clientclosure etc, in the DPMAS. In view of this, DPs should ensure that thebatches generated from the back-office are uploaded in the DPMASbefore using these utilities otherwise the batch file(s) generated out ofthe utilities will be rejected by the DPMAS transaction import utility onaccount of “Duplicate Batch Id”. Further, DPs should also update thebatch id utilized by these utilities in the back-office so as to generatethe batch ids in sequence thereafter.2) Upon DPs giving confirmation to generate freeze for Bulk Account Freezeand File Converter utilities, multiple files will be generated with amaximum of 50,000 Client accounts (if the freeze executable accountsare equal or more than 50,000 Client accounts) in each file. Thesemultiple files are the response files in case of Bulk Account Freeze forthe purpose of bulk verify & release and batch files in case of FileConverter to import into transaction import utility. Criteria foridentifying freeze executable accounts is given in our earlier Circularno. <strong>NSDL</strong>/POLICY/2006/0051 dated October 19, 2006. DPs are advisedto keep track of these files that are generated and ensure that thegenerated files are uploaded in the DPMAS.3) DPs should stop the Receive Service of the DPMAS at the time ofexecuting freeze instructions.4) Ensure that minimum free disk space of 500 MB on ‘c’ drive as well as500 MB or 10% of database size on database drive whichever is higheris available on the DPMAS server before generating the freeze request.5) DPs should ensure that they stay connected on December 30, 2006(Saturday) and January 1, 2007 (Monday) failing which, DPs mayreceive a delayed BOD as of January 2, 2007 on their DPMAS and anyfailure in pay-in will be the responsibility of the DPs. The status in theSystems Operations profile should show “Business Ended” as onDecember 30, 2006 and “Regular Operations” as on January 1, 2007. Itis once again advised that, DPs have to be connected to <strong>NSDL</strong> fortwo days as mentioned.6) During the process of executing freeze instructions, DPs should ensurethat no other process such as execution of settlement instructions,creation, modification, closure of Client accounts and other DPM relatedactivities etc are executed in the DPMAS.(II) Operational Guidlelines :1) Client accounts in statii “On Hold”, “Intransit” and “Closed” will notbe frozen by the freeze utilities. DPs should execute freeze instructions[ 455 ]
for Clients accounts with statii “On Hold”, “Intransit” as and whenthey are activated in the DPMAS and do not comply with Circular No.<strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006.2) If the Client account is already frozen (“Suspended for Debit”) throughDPMAS or SPEED-e, the utilities will still allow the DP to initiate thefreeze instructions for such accounts but such instructions will fail inthe BOD of January 1, 2007.3) If DPs wish to freeze Client accounts for a large number say 10,000 ormore, DPs are advised to :(a) Ensure that all the time critical instructions with the sameexecution date and future execution date (next day) are executedin the DPMAS on the same day well before 7.30 p.m.;(b) Inform Help Desk before releasing the freeze instructions and oncompletion as well.(c) Execute freeze instructions after regular operations end i.e. after7.30 pm.4) On receipt of the freeze utilities from the helpdesk, DPs should startidentifying the Client accounts that are not in compliance with PANrequirements and start releasing the future dated freeze instructionsfor such accounts well before the stipulated deadline, (December 30,2006), in order to avoid last moment message congestions in the DPMAS.5) Client accounts that are already frozen (“Suspended for Debit”)through DPMAS or SPEED-e) as on December 31, 2006, DPs should ensurethat such frozen accounts are in compliance with Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006. If such Client accounts getsunfreezed and do not comply with PAN requirements, DPs are advisedto freeze the accounts until the Client submits the PAN card and the DPduly verifies the same as mentioned in various <strong>NSDL</strong> circulars on PAN.6) DPs having back office are also advised to ensure readiness in its backoffice to process large COD exports / incremental client master exportfiles arising out of these exercise. Two set of large COD export file maybe expected :(i) due to future dated freeze order (before December 31, 2006);(ii) due to actual account freeze (on January 1, 2007).(III) General Guidelines and Obligations:1) DPs should note that in case of joint holdings, an account will befrozen, if the PAN details are missing for one or more holders ofan account.2) Client accounts that do not comply with Circular No. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006 and not frozen by DPs as on January1, 2007, will be treated as violation to SEBI directive.3) While the utilities will enable the DPs to identify Client accountswithout the PAN flag ‘Y’ and accounts having no PANs at all, DPsshould note that failure to set an appropriate flag or failure toupdate the Client account with appropriate details will renderDPs liable to claims by Clients.4) DPs are advised to only unfreeze the Client accounts, upon theClient(s) submitting the PAN card details and DPs verifying the[ 456 ]
PAN details as per the laid down procedure in circular no. <strong>NSDL</strong>/POLICY/2006/0007 dated March 3, 2006. In this regard, oncompliance with PAN requirements, it may be possible that Clientsmay submit settlement related instruction alongwith unfreezeinstruction. In such a situation, DPs should first unfreeze the Clientaccount and ensure that the status of the unfreeze instruction is‘Closed,Settled’ prior to executing the settlement relatedinstructions for such Client account.5) DP can cancel future dated freeze instructions executed beforeDecember 31, 2006 for those clients who complete PANrequirement as before that date (December 31, 2006). Utilitiesfor cancellation will also be provided along with freeze utilities.6) A special schedule will be drawn up to facilitate setting upfreeze in a staggered manner for DPs requiring to freeze morethan 50,000 accounts and the same will be communicated toDPs by PMC department.DPM Software - Modification only with prior permission of <strong>NSDL</strong>Circular No.It has come to our notice that a few Business Partners have attempted changes<strong>NSDL</strong>/PI/187on their DPM systems without intimation and/or prior permission of <strong>NSDL</strong>. InDate : September 13, course of doing so, on several occasions, DPM system became in-operational1997 and they had to obtain necessary help from <strong>NSDL</strong> help-desk. <strong>NSDL</strong> help-desksolved the problem either by remote log-in or by visiting their site.In view of the same, it is advised that the Participant should consult <strong>NSDL</strong>help-desk prior to undertaking any change on DPM system, as mentionedbelow. Explicit permission must be obtained from <strong>NSDL</strong> help-desk.Subsequently, a revised Form B should be submitted indicating the changeimplemented.The circular will apply to all the changes listed below :1) DPM Hardware replacement/upgrade/change/removal2) Re-installation of WINDOWS NT system software on server, Windows-95system software on client, SQL Server RDBMS, DPM database, <strong>NSDL</strong>'sapplication software on server/client and Anti Virus software.3) Upgrade/replacement of <strong>NSDL</strong> permitted version of WINDOWS NT systemsoftware, SQL Server RDBMS and Anti Virus Software. (including theupgrades suggested by <strong>NSDL</strong> for which software and procedure forupgrade are provided by <strong>NSDL</strong>)4) Change in settings of Windows-NT OS and SQL Server RDBMS (includingsettings for security, database mirroring/replication, table sizes etc.)5) Installing any additional software and utilities on client/server (e.g.Microsoft office/Exchange, Lotus Notes etc.).6) Creating shortcuts or relocating/duplicating <strong>NSDL</strong> supplied software filesin other directories/path (e.g. Copying EXE into Briefcase).7) Inter-connection of DPM system to internal LAN, or additional node/server or any other hardware device not specified by <strong>NSDL</strong>(Please note that inter-connection of DPM system to any other WAN isprohibited by DOT).[ 457 ]
In regard to point nos. 4,5,6 and 7, <strong>NSDL</strong> reserves right to deny permission ifthe request is in violation of general guideline issued by <strong>NSDL</strong>, softwarelicensing or any other statutory policy/guideline or the proposed change islikely to create performance problem in the opinion of <strong>NSDL</strong>.Any change being carried out, after obtaining the permission from <strong>NSDL</strong> helpdeskshould be done in accordance with procedure stipulated by <strong>NSDL</strong>.The first time upgrade/replacement of DPM application software with newrelease may be carried out in accordance with the prescribed procedure asper the current practice without additional permission from <strong>NSDL</strong>.If changes undertaken at your end are in violation of this circular and resultsin a problem, then the Participant may be charged as follows :a) Rs.1000/- per man hour of <strong>NSDL</strong> time used on rectifying the problem,subject to a minimum of Rs.2000/-b) Travel charges, if any, at actuals.c) Lodging and Boarding charges, if any, at actuals.The charges will be without prejudice to any other action, <strong>NSDL</strong> may initiateconsidering the seriousness of the violation.As <strong>NSDL</strong> has supplied SQL Server and application software, <strong>NSDL</strong> help-deskwill be responsible for support of SQL Server and application software. Howeverin respect of problems related to Windows NT/Windows 95, additional supportfrom your hardware vendor may be required.Additional Software permitted on DPM SystemCircular No.As Participants are aware, <strong>NSDL</strong> is sending circulars/price files via e-mail in a<strong>NSDL</strong>/PI/2002/1519 compressed form. <strong>NSDL</strong> has provided two licenses of CEDS 10 utility to theDate : September 7, Participants for their use on the DPM Server and on the Client machine, for2002 the purpose of reading the circulars/price files sent by <strong>NSDL</strong>.In this regard, some Participants have requested <strong>NSDL</strong> for an additional licenseof CEDS 10 utility for the purpose of reading circulars/price files received bythem on their internet e-mail Ids. In this context, Participants may note thatthey may use one additional license of CEDS 10 utility, only for the purpose ofreading the circulars/price files received from <strong>NSDL</strong> on their internet e-mailIds.Any use of the CEDS 10 utility for purposes other than what is stated abovewill amount to violation of the terms of license and may invite action.Circular No.A list of additional software permitted to be installed on the DPM System is<strong>NSDL</strong>/PI/2002/0405 enclosed. Participants must ensure that no other additional software isDate : March 8, installed on the DPM System.2002 List of additional software permitted to be installed on the DPM System1. 3 Com NIC diagnostic Direct X Drivers2. Acrob Reader V 2.13. Adaptec UDF Reader4. Adobe acrobat reader5. Adobe Page Maker6. Adobe Pagemill 3.07. Adobe Photo Deluxe 2.08. Adobe Photo Deluxe Business Edition 1.1[ 458 ]
9. Adobe Type Manager10. ATI Match 64 Display Driver11. Caere Scan Manager12. Compaq Diagnostic for Windows13. Compaq Insight Management Agents14. Compaq Integration Maintenance Utility15. Compaq Net Agents16. Compaq Server Utility17. DCOM for Windows 95 (allowed with Operating System - Windows 95)18. Direct Drivers19. Direct X Drivers20. HP Laserjet Pro Uni Installer21. HP Library & Tape Tools Version 2.722. IBM Registration23. Logitech ScanMan Color 200024. Matrax Powerdesk 4.10.0070 System Policy Editor25. Matrox Power Desk 4.18.02626. Microsoft Internet Information Server27. Microsoft Outlook Express28. MS Active Server Pages (only on server)29. MS Windows 95 starts here update edition (allowed with OperatingSystem -Windows 95)30. PC Care V 1.0131. PC Doctors for Windows32. Photo Finish33. RPADLL Photofinish34. S3 Refresh35. S3 Video Colour Control36. Umax Vistascan Shuttle37. USB Supplement OSR238. USB Update to OSR2DPM System - General operating instructionsCircular No.All the Participants are hereby informed that for the purpose of depository<strong>NSDL</strong>/PI/003operations, they should strictly adhere to the schedules and the generalDate: December 28, operating instructions as laid down in Annexure 'A'. In case of any clarification1997 or further information, the Participant may contact our 'Help Desk' at <strong>NSDL</strong>on 4976341, 4976348, 4975243, 4945177, 4937026, 4937031, 4972970 Extn4630 - 4636.Annexure 'A'General Operating Instructions for all Business Partners*Backup• BPs should ensure that adequate number of DATs (atleast 10 per week)are available for taking Backups.[ 459 ]
• The systems person must take backup daily, 30 minutes after confirmingthe `Business Ended' message in system operation profile.• BPs should maintain a Remote Backup.• BPs should send in Backup DATs when asked by <strong>NSDL</strong>. This will help<strong>NSDL</strong> to confirm the correctness of Backup procedure carried out bythe Participants and also check integrity of the data backed up.• Backup should be taken every day, even if there are no businesstransactions.• In case of BPs working on Saturdays & Sundays, backup should be takenon separate DATs reserved for Saturdays & Sundays.• Do not recycle the tapes in the same week.• Do not select the Replace option while taking hourly Transaction Logbackup (except when the tape is used for the first time or when it isrecycled)Windows NT·• Ensure that you should have Windows NT Setup Boot Diskettes.• Prepare the Emergency Repair disk after Windows NT installation.• Ensure that you should have \Windows NT35 Directory Backup withRegistry.Router• Keep the Router on until 30 minutes past receipt of 'Business EndedMessage'. The router can be switched off then, just before taking backup.• Do not change any of the Router configuration unless specificallyinstructed by the <strong>NSDL</strong> Networking Group.Modem/IDU• Keep the IDU/MODEM on until 30 minutes past receipt of 'Business EndedMessage' . The router can be switched off then, just before takingbackup.UPS Protection• Should have UPS to protect Server + Router + Modem + IDU. The UPSshould have atleast 30 Minutes backup.• In case of power failure, ensure that system is gracefully shutdown(through File/Shutdown" option of Windows NT menu) before UPS trips.Before starting operations please ensure that the UPS battery is fullycharged.Training / Staffing• Train adequate staff for operating the DPM software and administeringthe system for minimum 2 shift operations.• BPs should ensure that the system administrator is trained by <strong>NSDL</strong> onuse of Application Software as well as other application related systemadministration procedures, like taking backup, starting and shuttingcommunication and interface process etc.• BPs shall ensure that trained WIN NT and MS SQL staff is available foradministrating the DPM system. This is applicable for DBA functionsalso.[ 460 ]
• The system administrator should posses skills on Windows NT and SQLServer. Required skills on Windows NT and SQL Server are listed below• Familiarity with Windows NT and Windows 95 environment• Basic concept of domains and IP addressing• Creating user accounts• Implementing security on files and resources• Interpreting event log and taking backup of event log• Preventive measures against system breakdown• Backup and restoring data• Basic RDBMS concepts• Familiarity with SQL server tools like SQL enterprise manager, isql/w• Monitoring SQL activity using performance monitor• Backup and Restore of SSQL databases using enterprise manager• Interpreting SQL server error logKindly note that the BPs can avail the training facilities provided by AuthorizedTraining Centers of Microsoft.• It is mandatory for the BPs to arrange for systems administrator toremain available➢ during the crucial time of Business Operation on productionenvironment➢ during power on and power off of system➢ on call (round the clock) while not present at the BP sitePower On / Off• While powering down the server ensure that on all client terminalshave quit out of the DPM application .Then on the server select 'File/Shutdown' and select option 'Shutdown'. Only when the message isdisplayed "It is now safe to turn of the computer", server should bepowered Off.• Do not allow the operations staff to start operating the DPM softwareunless the systems Administrator ensures that all the communicationprocesses are started.Help Desk Calls• All Help Desk calls should be directed on Number- 4945177, in case thisnumber is busy you should call up on 4972950- 59 Ext. 407/408.Operational Schedule• The BPs should ensure that the communication process be shut off at9.30 a.m. every day from Monday to Friday. If there are any changes,they will be communicated separately.• Participants and Registrars should start the communication process onlyafter 3.30 p.m. daily. (6:00 p.m. on settlement day, which is generallyWednesday)[ 461 ]
• Thus communication process should be compulsorily shut off between9.30 a.m. to 3.30 p.m. ( 9:30 a.m. to 6:00 p.m. on settlement day,which is generally Wednesday)• From 9:30 am to 3.30 p.m. (6:00 p.m. on settlement day, which isgenerally Wednesday) BPs can function in Capture Mode.• BPs will not be able to "Verify and Release" after the scheduled time ofEOD ie. 6.00 PM (8:00 PM on settlement day, which is generallyWednesday) onwards. From this time onwards the BPs will be workingin Capture mode. The BPs will start working in "Verify and Release"mode after getting the next BOD message.• The BP can again start the communication process after the backup isover. However "Verify and Release" will not be possible if the BOD forthe next day is not sent by <strong>NSDL</strong>.• If the Communication process is on at the BP's server and BOD is received,the DPs can "Verify and Release", but only upto 9.30 a.m. next day(provided next day is not Saturday or Sunday).• Even if there are no business transactions, the BP's server should bekept on every day, starting from 3.30 p.m. (6.00 p.m. on settlementday, which is generally Wednesday), until 30 minutes past receipt of`Business Ended' message.• EOD time can be extended in case of bulk master data entry beingcarried out at <strong>NSDL</strong>. In this case the BPs will be required to arrange foradequate staff to take the Backup and shut the system.Summary• Transaction "Verify and Release" operations between 3.30 p.m. to 6.30p.m. on Monday, Tuesday, Thursday, Friday and 6.00 p.m. to 8.00 p.m.on Wednesday• Registrars and Participants connected to Depository through Leased lineswill be allowed Transaction "Verify and Release" operations between9.30 a.m. to 6.30 p.m. on Monday, Tuesday, Thursday, Friday and 9.30to 8.00 p.m. on WednesdayNote : It should be noted that in case settlement is not carried out on aWednesday (non working day), it is generally carried out on the followingworking day. This implies that operation time on this day can be modified,which will be communicated to the all BPs.EOD/BOD• Depository will certainly broadcast BOD message to all participants andRegistrars before 9.30 a.m. of the working day. Depository will endeavorto broadcast the same preferably by midnight of the previous workingday.• It should be noted that BOD message broadcast at Friday midnight/Saturday early morning will be for BOD of Monday or the first workingday of coming week.• Thus all the transaction "Verified and Released" on Saturday and Sundaywill be booked for Monday.[ 462 ]
Security• It is mandatory for the system administrator, at BP, to assign specificroles to the operators.• Each operator should have different Login Name and Password onWindows NT, SQL Server and Application.• All users should not be given System Administrator privilege.Server Booting• On booting the server a message is flashed on the screen "Do you wantto boot from the Last Known Good Menu, Press Spacebar to do so". Donot select this option.Using this option is very Dangerous as it is quite possible that the registryentries maintained by Windows NT may be lost. This may also lead toreinstallation of Windows NT, as a result of which all the data on theserver cannot be recovered.General• Do not experiment with the installed system configuration.• Check System Operation Profile everyday at 3.30 and check that theCurrent Business Date is updated. In case of discrepancy contact HelpDesk.• Report any error to help-desk immediately.• Check whether all processes are running in Administrative tools/Performance Monitor.• The system on which the DPM software is loaded should not be put toany other use i.e. no other application software should be installed• Do not delete or load any file on the system unless specifically directedby <strong>NSDL</strong> IT staff.• Do not change Date/Time or any other configuration, unless specificallydirected by <strong>NSDL</strong> IT staff• Do not connect DPM system's clients machines to any other WAN• Do not change the System Administrator password without a formalcommunication to <strong>NSDL</strong>.• Do not access SQL database externally unless specifically directed by<strong>NSDL</strong> Systems staff.DPM system - Guidelines for monitoring hard-disk spaceCircular No.All Participants are advised to follow and strictly adhere to the guidelines for<strong>NSDL</strong>/PI/98/372 monitoring hard disk space given in the enclosed annexure to ensure properDate :August 13,1998 functioning of DPM Application Software and smooth conduct of your businessoperations.Guidelines for monitoring hard disk spaceThe System Administrator of the Participant should carry out the activitiesmentioned below on the DPM Server regularly :The free space available on the DPM Server should be monitored regularlyand it should be ensured that at any given point of time sufficient free space(around 400 MB) is available on the DPM Server. In order to achieve this, thefollowing unwanted files residing on the server must be deleted:[ 463 ]
Sr. Name of files What to check When to deleteNobefore deleting(i) Files generated after Ensure that the A week aftersuccessful installation/ software is running installation /upgradation of DPM smoothly for a upgradation of theApplication Software. week. The DPM ApplicationThe names of these files clientdisk Softwareare mentioned in the directory shouldinstallation/not be deleted.upgradation manual(ii) System-generated Ensure that all At the end of everytransaction log the files are week, all files which(Transnsdlxxxxxxxx.dat) backed up on are more than threeresiding at c:\mssql\ two DATs (local days oldbackup directory and remotebackup DAT)(iii) Temporary files (*.tmp) Nothing At the end of everyresiding on the serverweek(iv) Back office related files A copy, if required, At the end of everyresiding on the Server is stored in the day.back-officeThe following must also be ensured :o Ensure that your "Recycle Bin" is empty.o Ensure that no software other than Windows NT 4.0, DPM Applicationsoftware, MS SQL 6.5 is installed on the server.In case there is no sufficient space on the hard disk even after removing theunwanted files, the Participant must upgrade its hard disk in consultationwith <strong>NSDL</strong>.DPM system - Monitoring hard-disk failureCircular No.Participants may note that there have been instances where the DPM server<strong>NSDL</strong>/PI/2002/1262 of Participants stopped functioning on account of Registry corruption in theDate: July 29, 2002 Windows NT server Operating System (OS). In order to rectify the problem,Windows NT server OS was required to be re-installed, which takes a longtime. This results in disruption of the operations of the Participants for a longtime. In this context, Participants may note that Windows NT / Windows 2000server OS allows creation of Emergency Repair Disk (ERD) with which majorityof Registry corruption incidences in the OS can be rectified without a need tore-install the OS and DPM System can start functioning in a short time.Further, there have been instances where DPM server of Participants stoppedfunctioning due to failure of RAID controller card. In such an event, Participantsare required to source an identical RAID controller card and also apply thelatest RAID controller configuration backup. In case the latest RAID controllerconfiguration backup is not available, then the RAID implementation of theDPM server needs to be re-configured afresh with the result that all theinformation stored on the disk including the database is lost. In such an event,the database has to be recreated from the last available backup.In view of the aforesaid, Participants are advised as follows:(1) Create fresh copy of ERD of DPM server atleast on a fortnightly basis aswell as immediately after any changes are effected to Hardware/Software configuration of the server.[ 464 ]
Circular No.<strong>NSDL</strong>/PI/2001/678Date : May 18, 2001(2) Take backup of RAID controller configuration of DPM sever atleast on amonthly basis as well as immediately after disk/RAID controller repairs/upgrade.It may also be mentioned that RAID controller configuration backup can betaken only through RAID monitoring utility, which is available at no extracharge. Participants are therefore advised to source the utility from theirvendor if not already installed on their DPM server.Further, Participants are advised to maintain a record of the backup of ERDand RAID configuration, in their Backup Register. Participants may contact<strong>NSDL</strong> Help Desk in case of difficulty in creating ERD and in taking backup ofRAID configuration.<strong>NSDL</strong> has mandated use of RAID (Redundant Array of Inexpensive Disk) harddisk for housing of DPM database on DPM Server. RAID implementation providesfor redundancy and thus first failure of disk does not lead to loss of data butjust the redundancy. However, it is important to become aware of this firstfailure so that Participants can call hardware engineer and get the problemfixed. If the problem is not fixed promptly and the second hard disk fails,then this will result in loss of data.Windows NT Operating System does not detect the first hard disk failure.However, the failure of the disk can be easily discovered through visualinspection of the activity lights on the hard disk. Each disk has a separateactivity light, which flickers with a level of activity and bears either green oramber/red colour as explained below:If disk drive is functioning normally, its activity light will flicker in greencolour. All activity lights flickering in green colour indicate that disks subsystemis functioning normally.The activity light of a disk drive will turn amber or red in colour if the driveis in-operational. The activity lights of other normal disks will continue toflicker in green. Thus finding one of the activity light in red/amber colourindicate that a drive has developed a problem.Participants are advised that their system staff visually inspect the conditionof activity lights of DPM Server disk sub-system once in a day and confirmthat all drives are operating normally.In case they notice one of the activity light flickering in red/amber colourthen they must report the problem to <strong>NSDL</strong> help desk and seek guidance.Participants are advised not to attempt resolution of this hardware problemthrough their vendor until it is cleared by informing <strong>NSDL</strong> help desk.Participants are further advised to maintain safe copy of RAID configurationbackup and also Emergency Repair Disk (ERD) to deal with Operating Systemrelated problem. Participants should also ensure that log file replication isON and ensure that all required backups are taken in accordance with theprocedures prescribed by <strong>NSDL</strong>.DPM system - Monitoring messages & Releasing instructionsCircular No.It has been observed that Participants do not execute (verify/release) the<strong>NSDL</strong>/PI/2002/1004 instructions if Beginning of Day (BOD) message is not received by the DPMDate: June 22, 2002 System. Participants may note that instructions such as account transfers,inter-settlement transfers, CM Pool to CM Pool transfers, Delivery Outs,Deferred Delivery Orders and Inter Depository transfers can be captured andverified/released even if BOD has not been received by the DPM System.[ 465 ]
Thus, the instructions which are verified/released before the receipt of BODwill be transmitted to <strong>NSDL</strong> immediately and such instructions will beprocessed, provided all the services are running successfully at the Participant'send. However, Participants are advised to remain in contact with <strong>NSDL</strong> HelpDesk and also ensure that all instructions have been transmitted to <strong>NSDL</strong>.Further, the status of such instructions may appear as "In Transit to <strong>NSDL</strong>" inthe DPM System and once the BOD is received, the status will change to"Overdue" / "Accepted by <strong>NSDL</strong>" / "Closed Settled", as the case may be.Further, <strong>NSDL</strong> Help Desk has been receiving calls about instructions remainingin status "In transit to <strong>NSDL</strong>". In this context, Participants are advised thatthe "Message Control Panel" under GISMO allows the Participants to view thestatus of incoming and out-going messages. The outgoing messages can beviewed in the "Transmit" queue. Participants should monitor the status of themessages, especially the messages which are in status "To be Transmitted" or" In Transmission ", at regular intervals. In order to find the latest status,Participant should query repeatedly since message control panel does notrefresh automatically. The messages in the transmit queue undergoes thefollowing status changes which are highlighted with the following colours:Status Reason ColourTo be Transmitted Message is waiting in queue Redto be transmitted to <strong>NSDL</strong>.In Transmission Message has been picked by Yellowcomms service for delivering to<strong>NSDL</strong> but waiting foracknowledgment from <strong>NSDL</strong>.Transmitted The message has received Whiteacknowledgment from <strong>NSDL</strong>.Others When there is a message format Bluemismatch between the DPM and<strong>NSDL</strong> systems. In such case anerror number will be indicatedin the status field.Transmitted by In case of network failure when GreyDATthe messages have been sent to<strong>NSDL</strong> via Magnetic mediainstead of online linkParticipants are also advised to note the following:1) The status of the messages will change from "To be Transmitted" to "InTransmission" and finally to "Transmitted", provided <strong>NSDL</strong> InterfaceTransmit, <strong>NSDL</strong> Interface Receive and Comms services are runningwithout any application errors.2) In case the messages remain in status "To be Transmitted" or "InTransmission" for a long time or in status "Others", Participant shouldinform <strong>NSDL</strong> Help Desk immediately.3) Participants must ensure through GISMO panel that Communications to<strong>NSDL</strong>, <strong>NSDL</strong> Interface Transmit, <strong>NSDL</strong> Interface Receive, Ping to <strong>NSDL</strong>and Ping to router are functioning successfully. However, ifCommunications to <strong>NSDL</strong>, <strong>NSDL</strong> Interface Transmit and <strong>NSDL</strong> InterfaceReceive stops or Ping to <strong>NSDL</strong> and Ping to router fails, Participant mustreport the same to <strong>NSDL</strong> Help Desk immediately.[ 466 ]
DPM System - Reporting problem to <strong>NSDL</strong> HelpdeskCircular No.Sub: Query resolution confirmation email for Token Number issued to<strong>NSDL</strong>/POLICY/Participants2009/0122 As all Participants are aware, token number is issued to the Participants forDate: December 15, the purpose of subsequent follow up, speedy resolution and escalation of2009 system related problems reported by them at the <strong>NSDL</strong> Help-Desk.In this context, Participants are informed that subsequent to resolution ofevery problem registered specific to the token number in <strong>NSDL</strong> system, anemail will be sent to the MS-Exchange email ID of every Participant.Circular No.Attention of the Participants is invited to the circular no. <strong>NSDL</strong>/ PI/98/353<strong>NSDL</strong>/PI/98/517 dated August 6, 1998 regarding Operating Instructions for the day-to-dayDate : October 12, depository operations. In this regard, it is advised that all problems especially1998 relating to hardware/software/communications and status of instructionsentered in the DPM system should be promptly reported at the <strong>NSDL</strong> HelpDesk.Kindly ensure to obtain a token number for the problem reported and quotethe same for subsequent follow-up with <strong>NSDL</strong>. The HelpDesk telephonenumbers are : 4945177, 4976341, 4975243, 4972964-70 (Extn. 4037 and 4038).DPM System - Upgrading DPM hardware- Prior permission of <strong>NSDL</strong>Circular No.All Participants are hereby advised that any upgradation of the DPM Hardware<strong>NSDL</strong>/PI/99/106 should be undertaken only after obtaining prior permission from <strong>NSDL</strong>.Date : February 18, Participants are advised to ensure the following before proceeding with any1999 upgradation :(i) Inform <strong>NSDL</strong> atleast a week in advance about the details of the proposedupgradation of hardware.(ii) Time schedule for upgradation shall be fixed in consultation with <strong>NSDL</strong>.(iii) All requisite steps as may be specified by <strong>NSDL</strong> for this purposes shallbe carried out.(iv) Revised Form 'B' must be submitted to <strong>NSDL</strong>.Participants are cautioned that any unilateral upgradation of the DPM hardwaremay result in the failure of the system, seriously jeopardising their day-todaydepository operations causing losses to their clients.DPM System - Security administrationCircular No.Further to our Circular No. <strong>NSDL</strong>/PI/2000/820 dated May 31, 2000 regarding<strong>NSDL</strong>/PI/2002/1862 guidelines related to Password management, all Participants are hereby advisedDate : October 26, to observe the following guidelines for Router password management:2002• Length of the Password should be atleast 8 characters.• Password should be changed every 60 days.Participants are advised to implement the aforesaid with immediate effectand follow specific guidelines mentioned in the aforesaid circular for Passwordmanagement.Circular No.As all Participants are aware, the application software supplied by <strong>NSDL</strong> to<strong>NSDL</strong>/PI/2000/820 its Participants provides a facility to secure the application using password.Date : May 31, 2000 Participants are advised to create "ADMIN User" who will act as the SystemAdministrator for <strong>NSDL</strong> DPM Application while installing the Application. ThisADMIN User in turn will create various Users who will have the access tovarious parts of DPM Application. These Users can perform various functionsin DPM Application depending upon the rights given to them by ADMIN User.The details on how to create function groups and the structure of accessrights are provided in the User's Manual supplied by <strong>NSDL</strong>. It is recommendedto have only one employee in the organization with ADMIN level access to theDPM Application. However, his/her Password may be kept in sealed envelopewith the Data Security Officer or any other designated officer so that in the[ 467 ]
absence of ADMIN User, his/her duties can be performed by referring to thepassword so preserved. A record of the events of taking the password fromthe envelope should be maintained to keep an audit trail. Whenever thepassword is used in this process, it is advised that the password is changedand the new password is preserved. A similar practice may be implementedfor preserving passwords of other devices like NT, Server, Desktop and Router.General Guidelines on Password management: -• Length of the Password can be Minimum 6 Characters. It is recommendedthat the length of password should be 8 characters.• Password can have alpha, numeric or special characters in any order. Itis recommended that the first character is an alphabet.• Password should not be related to or resemble the name of the user orkith and kin of the user.• Password should not be a dictionary word or name of the location/city/town/building/organisation in which the machine is located.• Password may be changed every 60 days.• ADMIN User is requested to change the status of a User to 'Suspended' ifthe User goes on leave for more than two days to avoid misuse of theUser Id by other Users.The status can be made active once the Userresumes the duty.• It is recommended that the status of a User be changed to 'Closed' ifthe User leaves the organization.Participants are advised to implement these guidelines with immediate effect.DPM setup after upgradation - Checklist for ComplianceCircular No.<strong>NSDL</strong>, vide its circulars, has been prescribing certain procedures that are to<strong>NSDL</strong>/PI/2004/0648 be followed by Participants after they carry out any significant change in theDate : April 10,2004 hardware / software used for depository purposes such as:1) upgradation of the server used for DPM activities2) replacement of server3) server migration4) reconfiguration of the server5) reloading of server Operating System and related softwareIt has been observed that some Participants are not complying with theserequirements and as a result face problems in their routine depository relatedoperations.For the benefit of the Participants, a checklist of activities to be performedafter any of the abovementioned activities are carried out, has been compiled,as follows:Sr. Description Circular No. DateNo.1 Separate HDD for Operating <strong>NSDL</strong>/PI/2002/1174 JulySystem and database to 18, 2002reside on RAIDconfigured drive2 Configuration of server to <strong>NSDL</strong>/PI/2002/0656 Aprilensure Robocopy feature is 19, 2002enabled for copying thetransaction logs on theClient machine[ 468 ]
<strong>NSDL</strong> email serverSr. Description Circular No. DateNo.3 Installation of Latest <strong>NSDL</strong>/PI/2002/1684 OctoberAnti-virus software 3, 20024 Installation of RAID <strong>NSDL</strong>/PI/2002/1262 JulyMonitoring utility 29, 20025 ERD and RAID <strong>NSDL</strong>/PI/2002/1262 Julyconfiguration backup 29, 20026 Installation of WinZip / <strong>NSDL</strong>/PI/2002/2060 Nove.,ZipITfast or compatible 28, 2002zipping software7 Submission of Revised <strong>NSDL</strong>/PI/2002/2068 Dec.Form B 2, 2002Besides, Participants are advised to ensure that:1) the number of SQL Server licenses are reconfigured as per the detailsprovided by <strong>NSDL</strong>;2) modem is configured and tested for RAS and PPP connectivity so that itcan be used as a fallback means of connectivity;3) service packs for Windows server are duly installed;4) MS Exchange utility is installed and configured to send and receiveemails from <strong>NSDL</strong>; and5) NETBUEI protocol on server is installed to communicate with clientmachines during PPP connectivity.Participants are advised to ensure compliance of the above.Circular No.As all Participants are aware, <strong>NSDL</strong> is providing an e-mail based communication<strong>NSDL</strong>/PI/2004/0690 for its Participants. Using this facility, Participants can receive / send e-mailsDate : April 19,2004 through Microsoft Exchange Client software installed on <strong>NSDL</strong> DPM serverand a Client machine. At present, Participants can use this facility between 6p.m. and 9 a.m.<strong>NSDL</strong> is upgrading its e-mail server which will be accessible using MicrosoftOutlook Express. Pursuant to the upgradation, Participants who are connectedto <strong>NSDL</strong> through leased line will be able to access this facility for 24 hours.However, there will be no change in the timings for Participants who areconnected to <strong>NSDL</strong> through VSAT.All Participants are hereby advised to perform the following activities:a) install and configure Microsoft Outlook Express (which is installable aspart of Internet Explorer version 5.5 or 6.0) on <strong>NSDL</strong> DPM server and aClient machine as per the instructions given in the "Installation andConfiguration Manual for Outlook Express" provided at <strong>NSDL</strong> Intranethttp//sqlassist.b) send a test mail to <strong>NSDL</strong> Help Desk from the <strong>NSDL</strong> DPM server as well asthe Client machine indicating the successful installation of MicrosoftOutlook Express.[ 469 ]
c) uninstall the existing Microsoft Exchange Client software from their<strong>NSDL</strong> DPM server and Client machine.Participants are advised to complete the above activities on or before April30, 2004. Any failure in complying with the above will result in Participantsnot able to receive / send e-mail based communications.Phasing out of CISCO Router 2500 seriesCircular No.Attention of all Participants is invited to Circular no <strong>NSDL</strong>/PI/2004/1421 dated<strong>NSDL</strong>/PI/2005/1364 August 9, 2004 wherein Participants were informed about phasing out of CISCODate: July 27, 2005 2500 series router, as CISCO has discontinued supply of spare parts for thesaid series.It is observed that a number of Participants are still working on CISCO 2500series router. <strong>NSDL</strong> would like to reiterate that any fault /mechanical failurein the router would disrupt the depository activities of the Participants, astimely replacement may not be available.As Participants are carrying out time critical depository operations and toensure smooth business operations, Participants are hereby advised to replaceCISCO 2500 series router with models as specified in Circular no <strong>NSDL</strong>/PI/2004/1968 dated October 29, 2004.Circular No.All Participants are hereby informed that CISCO has declared end of service<strong>NSDL</strong>/PI/2004/1421 life for its 2500 series router, which is one of the models empanelled byDate: August 9,2004 <strong>NSDL</strong>. Vendors who have stocked spare parts for CISCO 2500 series routermay be in a position to offer the service / replacement for faulty parts tillstocks last, but CISCO has informed that they will not supply new spare parts.Considering the above factors and the requirement of maintaining continuouselectronic connectivity with <strong>NSDL</strong>, Participants are advised to phase out thismodel of router by acquiring one of the current empanelled routers.Further, upgradation of router should be undertaken only after obtaining adetailed technical guidance and clearance from <strong>NSDL</strong> Help Desk. Subsequentto the migration, Participants should submit revised form-B to <strong>NSDL</strong>.b. BackupDPM System - Importance of taking backupRegulation 50Where records are kept electronically by the participant, it shall ensure thatthe integrity of the data processing systems is maintained at all times andtake all precautions necessary to ensure that the records are not lost,destroyed or tampered with and in the event of loss or destruction, ensurethat sufficient back up of records is available at all times at a different placeCreation of Automated System Recovery backup in Windows 2003 ServerCircular No. Sub : Creation of Automated System Recovery backup in Windows 2003<strong>NSDL</strong>/POLICY/2008/ Server0069 At present it is mandatory for Business Partners of <strong>NSDL</strong> (which have windowsDate: October 10, 2008 2000 server as their DPM server OS) to take backup of Emergency Repair Disk(ERD) as per the prescribed procedure. <strong>NSDL</strong> has advised Business Partners toupgrade from Windows 2000 server to Windows 2003 server as Microsoft haswithdrawn support on Windows 2000 Server.Microsoft Windows 2003 Server Operating System allows creation of AutomatedSystem Recovery (ASR) backup instead of Emergency Repair Disk (ERD)[ 470 ]
Backup on holidays & PenaltyCircular No.<strong>NSDL</strong>/PI/2002/0474Date: March 21,2002Circular No.<strong>NSDL</strong>/PI/98/016Date : January 6,1998available for Windows NT / Windows 2000 Operating Systems. The AutomatedSystem Recovery backs up the System State data, system services, and alldisk configuration information needed to boot the operating system. ASRbackup also creates a floppy disk, which contains information about thebackup, the disk configurations (including basic and dynamic volumes).It maybe noted that ASR backup does not include data files. The ASR Wizard aftercreating the ASR floppy disk creates the ASR backup file on the hard disk ofthe Server which is around 800 MB or higher in size. Please make sure thisbackup file is created on disk drive other than C Drive of Server where morethan 5 GB free space is available. After creation the ASR backup file has to becopied to hard disk of any client machine. The procedure for taking the ASRbackup is attached as Annexure-I.In view of the aforesaid, Participants having Windows 2003 Server is advisedas follows:1. Create fresh copy of ASR backup of DPM server atleast on a bi-monthlybasis as well as immediately after any changes are effected to Hardware/Software configuration of the server.2. Participants are advised to maintain a record of the backup of ASR intheir Backup Register3. The details of ASR backup would be verified during the SystemInspections.Participants may contact Sanjay Mirchandani on Tel No. (022) 2499 4454,Sankalp Parlia on Tel No. (022) 2499 4451 or Vikas Gorule on Tel No. (022)2499 4455 in case of any query regarding ASR backup or in case of difficulty increating ASR Backup.Attention of the Participants is invited to Rule 18.1.1 (ii) of the BusinessRules of <strong>NSDL</strong>, regarding levy of penalty of Rs. 5000/- for not taking dailybackup and/or deviation in the procedure for taking backup. In this context,it has been observed that some Participants are not taking backup on a dailybasis, especially on holidays. It should be noted that on a holiday, if the DPMserver is kept on with communication service running, then the Participantshould take a backup. Any failure in this regard will attract the aforementionedpenalty.<strong>NSDL</strong> requires all business partners (all depository participants, shareregistrars, companies doing share registry work) to take the back-up of theirdata regularly and to store this back-up at a site other than the site wherethe hardware etc. having connectivity with <strong>NSDL</strong> is located. In order to ensurethat the business partners are indeed taking the backup regularly, <strong>NSDL</strong> callsfor the back-up DATs from its business partners from time to time.It has been observed that while some business partners are taking the backupregularly and in accordance with the procedure, many are not. It has alsobeen found that in some cases the response to our demand for the back-upDATs is slow and is forthcoming only on repeated reminders. <strong>NSDL</strong> would liketo reiterate to its business partners that they will not only jeopardise theirown ability to continue business in the event of a disaster but will create[ 471 ]
FAQs for backupCircular No.<strong>NSDL</strong>/PI/98/215Date : June 5, 1998difficulties for the whole system if proper back-ups are not taken. It istherefore necessary for the business partners to maintain a minimumacceptable standard.The question of failure to take a back-up was considered by the ExecutiveCommittee of <strong>NSDL</strong> in its last meeting. Considering the gravity of the matter,the Committee decided that on the first occasion when a business partner isfound to have not taken the back-up daily or that the back-up taken by thebusiness partner is taken without following the proper procedure, the partnerwill be warned and on subsequent occasions of default, a penalty be levied.This may be followed by further disciplinary action if repeated defaults arenoticed. <strong>NSDL</strong> would prefer not to be required to take this measure.Considering the fact that quite some time has lapsed since some of the businesspartners have undergone training, it has been decided to hold a special halfday training programme focusing exclusively on the correct back-up procedureand related practices. This training would be offered free for one personfrom each business partner. If any additional demand is received from thebusiness partners, the training would be offered again on the basis of a charge.We would request you to send your nominations to <strong>NSDL</strong> in case you wish toavail of this opportunity. The exact date of training will be communicated toyou separately.We intend to start implementing the decision of the Executive Committeeafter the special training is over. We would request our business partners tobring this circular to the notice of their senior management. The complianceofficers of business partners should review the present practice of takingback-ups within their respective organisations.<strong>NSDL</strong> has been receiving number of queries at the Help-Desk regarding backups.Many such queries are repetitive in nature. In this context, <strong>NSDL</strong> has compileda document of Frequently Asked Questions (FAQs) on backups and the solutionsfor the same, which is enclosed. This will help the Participants in resolvingproblems quickly and will save on cost and time spent in making telephonecalls to the Help-Desk. It is envisaged that Participants would attempt thesolutions recommended in the document before communicating to Help-Deskfor resolving the problems.Participants are once again advised to strictly follow the back-up proceduresstipulated by <strong>NSDL</strong>. This is essential as it ensures safety of your data and in asituation of crisis you can recover only if you take correct backup. Your businessrecovery plan would be severely jeopardised if you do not take a correctbackup.Frequently Asked Questions & Solutions thereof on Backups<strong>NSDL</strong> Help Desk has reviewed the problems reported for Backup procedureover the last few months and has identified a set of questions that arefrequently asked by Participants. This document on 'Frequently AskedQuestions' (FAQ) and solutions thereof is prepared for quick reference ofParticipants.Q1. Why to take backup on daily basis?If the system breaks down, with latest available backup of database andtransaction log, the database of the Participant can be rebuilt. The backup is[ 472 ]
the only media by which the Participant's database can be reconstructed.Q2. From where to take backup?It is advised to take a backup from GISMO application which is on the <strong>NSDL</strong>DPM server.Q3. What should be the sequence of taking the backup?The sequence of taking backup using GISMO should be as follows:I. <strong>NSDL</strong>DPM -Transaction log (opm_transnsdl)II. <strong>NSDL</strong>DPM - DatabaseIII. MASTER - DatabaseIV. MSDB - DatabaseV. Backup to tapeQ4. How to take backup?A summary of various steps to be performed while taking database andtransaction log backup is given below. Participants are advised to refer to theBackup Procedure Manual for the detailed steps to be performed.A. Device name terminology: Names of the database devices which areto be backed up by the Participant, are as mentioned below :1. opm_transnsdl : For transaction log device backup for UserDataBase2. opm_dbnsdl : For User DataBase (<strong>NSDL</strong>DPM /<strong>NSDL</strong>SHR / <strong>NSDL</strong>CC)3. opm_dbmast : For Master DataBase4. opm_dbms : For MSDB DataBaseB. Backup Procedure: Backup is first to be taken on hard disk and then onDATs as explained below:Step 1 : Backup on Hard disk:1. Log-in to GISMO panel on the server with User-Id "Backup".2. Take transaction log device backup by selecting "Backup" icon, then goto "<strong>NSDL</strong>DPM" and click on "Transaction"3. Take database backup of <strong>NSDL</strong>DPM by selecting "Backup" icon, then goto "<strong>NSDL</strong>DPM" and click on "Database"4. Take backup of Master database by selecting "Backup" icon, then go to"MASTER" and click on "Database"5. Take backup of MSDB database by selecting "Backup" icon, then go to"MSDB" and click on "Database"With this, the user completes taking backup on the Hard-disk.Step 2 : Backup on DAT :Database Backup1. Insert the relevant database DAT (i.e. odd or even) into the DAT drive.2. Go to GISMO panel3. Select "Backup" icon, then click on "Backup to tape"4. Select all the files "opm_dbnsdl" for user Database, "opm_dbmast" forMaster Database and "opm_dbms" for MSDB Database5. Click on Backup. This will initiate the backup procedure.[ 473 ]
6. In case the system flashes a message "The tape is full. The tape hasbeen rewound. Insert the next tape for this backup", the backup maybe continued on the next tape. However, it must be ensured that thelabel of the DAT should indicate that the backup of that day is taken ontwo separate DATs.7. After the system flashes the message "Operation was successfullycompleted", as the backup is completed, remove the DAT.8. Repeat the above procedure for remote site DAT.Transaction log Backup (Device & Automatic)1. Insert the relevant transaction DAT (i.e. odd or even) into the DATdrive.2. Go to GISMO panel3. Select "Backup" icon, then click on "Backup to tape"4. Select the file "opm_transnsdl" for taking backup of transaction logdevise backup5. Also select all the system-generated automatic transaction log filesgenerated after the last database backup. The filenames of these are"Transnsdldpm980324150000.dat" having the date and time stamp.6. Click on Backup. This will initiate the backup procedure.7. In case the system flashes a message "The tape is full. The tape hasbeen rewound. Insert the next tape for this backup.", the backup maybe continued on the next tape. However, it must be ensured that thelabel of the DAT should indicate that the backup of that day is taken ontwo separate DATs.8. After the system flashes the message "Operation was sucessfullycompleted", as the backup is completed, remove the DAT.9. Repeat the above procedure for remote site DAT.Q5. When to take backup?Backup should be taken daily after the EOD is complete. Further, it should beensured that the backup is never taken when the "Systems Operation Profile"shows status "EOD IN PROCESS".In case of an emergency, when the Participant cannot stay till the EOD iscomplete, then it is advised that the Participant should take backup andswitch off the server.Q6. What if the server is on throughout the night?If the Participant keeps the server on throughout the night, then it should beensured that the three services (receive, transmit and communications) whichare automatically stopped during the backup are started again immediatelyafter taking backup (i.e. backup of Day 1). While taking the backup on thenext day (backup of Day 2), the backup of the transaction log files generatedafter taking backup of Day 1 should also be taken. Please refer to answer toquestion 12 for further clarifications.Q7. What is meant by database backup & transaction log backup?• Database backup means the backup of master, msdb & nsdldpmdatabases.• Transaction log backup means the backup of transaction log device file(opm_transnsdl) and the automatic (system-generated) transaction logfiles as of that day.[ 474 ]
Q8. What is meant by device transaction & automatic transaction?• Devise transaction means the transaction log device backup taken bythe Participant.• Automatic transaction log means the backup which the system takes byitself. It is stored in "c:\mssql\backup" directory on the server. Theformat of the filename is Transnsdldpmyymmddhhmmss.dat". Here 'yy'stands for year, 'mm' stands for the month, 'dd' stands for date & 'hhmmss'stands for the time, e.g. transnsdldpm 980312140200.dat indicates atransaction log file which was generated by the system on 12th March,1998 at 2.02 pm.Q9. What is to be done if automatic transaction is not generated?The BOD message triggers generation of automatic transaction log files, hencecheck if you have received the BOD as of that day. Secondly, check whetherall the three services (receive, transmit and communications) are started. Ifthe problem still persists contact <strong>NSDL</strong> Helpdesk.Q10. How many DAT's are required for backup and for how much timeshould it be retained?At any point of time, a minimum of nine DATs are required which are to beused as follows :1st Set : (For Local Storage)i. Odd date's transaction log backupii. Odd date's database backupiii. Even date's transaction log backupiv. Even date's database backup2nd Set : (For Remote Storage)i. Odd date's transaction log backupii. Odd date's database backupiii. Even date's transaction log backupiv. Even date's database backupIn addition, one DAT will be required for full harddisk backup for specialevents such as Upgrade of <strong>NSDL</strong> software, etc.Once a DAT is full it has to be retained for a period of 90 days, followingwhich it can be reused.Q11. What if the DAT drive stops working ?If the DAT drive is giving error during backup, then the participant shouldimmediately inform <strong>NSDL</strong> help-desk and call the hardware vendor. The backupmust be taken on the client machine, as an interim arrangement, until theproblem is resolved. This can be achieved by using Network Neighbourhoodon client or on server. Once the DAT drive problem is fixed, the Participantmust first take backup of missing days from clientmachine onto the DAT &must continue the sequence onwards.Q12. What database and transaction log form a correct set ?<strong>NSDL</strong> verifies the backups taken by the Participants at regular intervals toensure that the Participants follow the correct backup procedure. As a partof backup verification, the procedure described below is followed :• Restore the database as of the specified date[ 475 ]
• Restore all the transaction logs generated after that backup, sequentially(in the order of date & time stamp), on the database.So, while sending backup DATs to <strong>NSDL</strong> for verification, kindly ensure thatthe database backup as of date mentioned in <strong>NSDL</strong> letter and thetransaction log backup as of the next day is sent. In case a Participantkeeps the server on throughout the night, then it should be ensured thatthe transaction DAT contains backup of all the system generated transactionlog files, generated after the database backup of the date specified in<strong>NSDL</strong> letter, in addition to next day's transaction log backup. In case thebackup is split across two DATs, both the DATs should be sent to <strong>NSDL</strong>.The same is explained in the diagram below :Where t1, t2, ...t9 -> automatic (system generated) transaction log filesgenerated for Day 1 (i.e. on 12/03/98)T1, T2, ...T8 -> automatic (system generated) transaction log files generatedfor Day 2 (i.e. on 13/03/98)TD1 -> transaction log device backup taken on Day 1 (i.e. on 12/03/098)TD2 -> transaction log device backup taken on Day 2 (i.e. on 13/03/098)D1 -> Database backup taken on Day 1 (i.e. on 12/03/98)D2 -> Database backup taken on Day 2 (i.e. on 13/03/98)It is assumed in the above diagram that on both the days the backup wastaken before the EOD and the server was kept on, hence the system generatedhourly transaction log files (t8, t9 & T8 ) after the backup. While takingbackup on 13/03/98, it should be ensured to take backup of all files generatedafter database backup of 12/03/98 (i.e. t8, t9, T1, T2,...T7, TD2)If <strong>NSDL</strong> asks for database backup of 12/03/98 and transaction log backup of13/03/98 for verification, then while sending DATs to <strong>NSDL</strong> ensure that allthe files from D1 to TD2 are sent.It may be noted that if the backup is taken after EOD, the files t8, t9, T8 (asshown above) will not be generated at all.DPM System - BackupsCircular No.Sub: Alternative back-up devices for taking back-up<strong>NSDL</strong>/POLICY/ In continuation of Circular No. <strong>NSDL</strong>/POLICY/2009/0075 dated August 28,2009/0119 2009 regarding facility to take back-up in other alternative back-up devicesDate: December 7, 2009 (other than DAT), all Participants are hereby informed that Participants areno longer required to take prior approval from <strong>NSDL</strong> if they wish to takeback-up on any of the specified back-up devices as mentioned in aforesaidcircular. Participants will be required to submit revised Form B as provided at<strong>NSDL</strong> Circular No.: <strong>NSDL</strong>/POLICY/2009/0075 August 28, 2009 if they wish totake back-up on such devices.Participant may please note that at the time of disaster / emergency /inspection, whenever the local or remote back-up is called for, Participantsmust have capability to provide the back-up data in any one of the followingmedia:(i) USB (Universal Serial Bus) disk(ii) DVD (Digital Versatile Disk)(iii) DAT (Digital Audio Tape)Please note that USB disk is required to be handled with more care duringtransportation. It is advised to use a hard case to store and transport USBdisk.In case of any further information / clarification is required, Participants are[ 476 ]
equested to contact Mr. Sanjay Mirchandani / Mr. Sankalp Parlia / Mr. GaneshPawar / Mr. Rahul Mehta / Mr. Vikas Gorule at (022) 2499 4454 / 4451 / 4447/ 4456 / 4455.Circular No.Sub: Alternative back-up devices for taking back-up<strong>NSDL</strong>/POLICY/Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/PMC/Email-44/2009/0075 05 dated March 11, 2005 regarding facility to take back-up in other alternativeDate: August 28, 2009 back-up devices (other than DAT). In this regard, a few suggested alternativeback-up devices on which Participants may take the back-up, subject to thedatabase size, transaction volumes etc., are as follows:(i) USB (Universal Serial Bus) disk(ii) DVD (Digital Versatile Disk) writer(iii) DLT (Digital Linear Tape)(iv) LTO (Linear Tape Open)Participants will be required to take prior approval from <strong>NSDL</strong> by submittingrevised Form B indicating any of the above devices or any other device oftheir choice if they wish to take back-up on such devices other than DAT. Ifthe existing back-up operations remain unchanged, Participants need notsubmit the revised Form B. The revised mode of submitting Form B is providedat <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2009/0070 dated August 17, 2009.In case of any further information / clarification is required, Participants arerequested to contact Mr.Sanjay Mirchandani / Mr.Sankalp Parlia / Mr.GaneshPawar / Mr.Rahul Mehta / Mr.Vikas Gorule at (022) 2499 4454 / 4451 / 4447 /4456 / 4455.Circular No.Reduction in retention period of back-up tapes from existing 60 days to<strong>NSDL</strong>/POLICY/30 days for backup taken on Saturdays2009/0072 As all Participants are aware, it is important to take backups of the DPMDate: August 27, 2009 system on a daily basis. <strong>NSDL</strong> has been advising Participants about theimportance of taking regular backups for ensuring safety of their data andcontinuity of its operations. Taking of regular backup as per the stipulatedprocedure will help Participants to recover the database in a situation ofcrisis, which otherwise would severely jeopardize the business recovery plan.Participants are required to maintain the back-up taken on weekdays for theperiod of 15 days and on Saturdays for a period of 60 days.<strong>NSDL</strong> has received suggestions from Participants for reduction in the periodfor which backup tapes are to be preserved. Considering these suggestions,the following amendment is made in the Backup Policy.Backup taken for Saturdays (Friday, if Saturday is a holiday) shall bepreserved for a period of 30 days instead of 60 days. However, the currentpolicy to preserve the backup for weekdays for 15 days remains unchanged.There is no change in other aspects of backup policy.All Participants are requested to take note of the above.Circular No.Sub: Daily Backups of database for <strong>NSDL</strong> DPM system<strong>NSDL</strong>/POLICY/As all Participants are aware, it is important to take backups of the DPM2009/0062 system on a daily basis. Taking regular backups as per the stipulated procedureDate: July 21, 2009 will help Participants recover the database in a situation of crisis, whichotherwise could severely jeopardize business recovery plan and recreation ofthe database of the DPM system. In the event of DPM system crash, <strong>NSDL</strong> mayassist the Participant in recreating the database to the extent feasible. Incase the previous day's proper backup is available, then recreation of theDPM system would be done without any charge. However, if the proper backupis more than a day old, then the Participant will be charged Rs. 10,000 plusRs. 2,000 per man hour of <strong>NSDL</strong> time spent in recreating the database.[ 477 ]
Circular No.Attention of Participants is invited to our Circular No. <strong>NSDL</strong>/PI/98/215 dated<strong>NSDL</strong>/PI/2003/0355 June 5, 1998 regarding FAQs on backup, whereby Participants were advisedDate: March 3,2003 to take two copies of backup of database as well as transaction logs, one tobe retained locally where DPM is located and the other to be kept in a remotelocation, distant from the DPM system. This was prescribed so as to meetexigencies arising out of certain calamities viz.; earthquake, fire accident,etc., whereby the DPM system can be made operational using the backup.The remote site backup can be very handy if the main site backup is notaccessible/lost/not retrievable.In order to ensure business continuity of the depository operations, Participantsare advised as follows:• Keep the backups at a place distant from the place of operations;• Maintain backup of all important documents viz.; Account opening forms,DP-Client agreements, signature cards etc. at a distant place from theplace of operations, so that in case of any exigencies, the work is nothampered. Alternatively, Participants may consider keeping all suchdocuments in electronic form at a distant place; and• Keep the backup DATs as well as the aforesaid physical documents in afireproof cabinet.In case Participants need any assistance in this regard, they may contact<strong>NSDL</strong> Help Desk.Circular No.Sub : Back up Policy - Certain amendments<strong>NSDL</strong> /PMC/<strong>NSDL</strong> has circulated backup policy in the CD for Integrated Software versionEmail -24/022.91 and 3.0 upgrade and vide circular No.<strong>NSDL</strong>/PMC/Email-18/02 dated 05thDate : May 13, 2002 April 2002.<strong>NSDL</strong> has received suggestions from the Business Partners for reduction in theperiod for which backup tapes are to be preserved. DPs who are working inthree shifts every day have also expressed difficulty in sending backup DAT tothe remote site out of office at night. Keeping these suggestions in view, thefollowing amendments are made in the Backup Policy.The Backup DAT should be preserved for the period of 15 Days instead of thepresent 60 days. However the backup taken on Saturday (Friday if Saturday isa holiday) shall be preserved for a period of 60 days. DPs must retain backuptaken for version upgrade ( both pre & post)The Backup Dat meant to be sent to remote site may be sent to remote siteon the next working Day, as early as possible but not later than 1.00 p.m.next day.There is no change in other aspects of backup policyThis circular comes into force with immediate effectCircular No.The importance of taking proper back-ups on every single day as per the<strong>NSDL</strong>/PI/99/697 procedure prescribed by <strong>NSDL</strong> has been time and again brought to the noticeDate: August 31,1999 of the Participants. In order to ensure that the Participants are indeed takingthe backup regularly, <strong>NSDL</strong> calls for the back-up DATs from its Participantsfrom time to time. It has been observed that while many Participants aretaking the back-up of their data regularly and in accordance with theprocedure, some of them still do not take proper back-ups.It is observed that the major reason for taking improper backups is when theback-up is not taken by the regular person. The Compliance Officers of allParticipants are requested to take note of the same and ensure to put adequatesystems in place to avoid such occurrences.In the event of a difficulty such as hard disc crash etc., <strong>NSDL</strong> assists theParticipants in recreating its database. It has been decided by the ExecutiveCommittee of <strong>NSDL</strong> that in such an eventuality, in case the previous day'sproper back-up is available, then recreation of the DPM system would be[ 478 ]
done without any charge. However, if the proper back-up is more than a dayold, then the Participant may be charged Rs. 1000/- per man hour of <strong>NSDL</strong>time spent in recreating the database, subject to a minimum of Rs. 2000/-.The charges will be without prejudice to any other action, <strong>NSDL</strong> may initiateconsidering the seriousness of the problem.c. Anti-virusCircular No.:<strong>NSDL</strong>/PI/2002/1684Date: October 3,2002Participants are aware that they are required to install Anti-Virus softwareon server as well as on all the client machines of <strong>NSDL</strong> DPM setup. Also, inorder to protect the DPM setup against new viruses, Participants are advisedto ensure that latest version of Anti-Virus software is installed on the DPMsetup. For this purpose, Participants should upgrade the Anti-Virus software,atleast once a week, for which, Participants may undertake Annual SubscriptionContract (ASC) from the authorised dealer of the Anti-Virus software.In order to keep Participants informed about the latest version of Anti-Virussoftware, <strong>NSDL</strong> has posted this information on <strong>NSDL</strong> Intranet Server (http://sqlassist), for the below mentioned Anti-Virus softwares, generally used byParticipants:1. Norton Anti-Virus2. McAfee Anti-Virus3. CA Innoculate Anti-Virus4. Trendmicro Anti-Virus5. F-Prot Anti-Virus6. Quick-Heal Anti-VirusParticipants should compare the below mentioned parameters of the Anti-Virus software installed on their DPM setup with that posted on <strong>NSDL</strong> Intranetserver and carryout the upgrade, if required:1. Virus Definition files and version2. Release date of the Virus definition file3. Scan engine name and version4. Release date of the scan engineParticipant can find out the details of Anti-Virus installed and its version byright clicking on the Anti-Virus icon appearing on the task bar and then selectingthe option "About".Details of aforesaid Anti-Virus softwares as of September 30, 2002 forabovementioned parameters and the URL's from where the latest version ofAnti-Virus software can be downloaded are enclosed as Annexure.Participants are advised to ensure compliance of the above.Anti-Virus definition file & Scan engine Details: -Definition of terms usedVirus Definition Files:Virus definition files contain up-to-date virus signatures and other informationthat anti-virus products use to protect your computer against the thousandsof computer viruses in circulation. Virus definition files are regularly updatedto provide protection against the hundreds of new viruses that appear eachmonth. To ensure that your Anti-Virus software can protect your system ornetwork against the latest virus threats download and install the latest virusdefinition file.[ 479 ]
Scan Engine:A virus scan engine is the program that does the actual work of scanning anddetecting viruses while signature files are the 'fingerprints' used by the scanningengines to identify viruses. New scan engine versions are released for a numberof reasons. About 6 to 8 new viruses are found everyday around the world.The old engine may not detect new types of viruses. New versions of scanningengine usually also enhance scanning performance and detection rates. Somevendors provide updates for both the scanning engine and signature file in asingle file while others will provide them in separate files Update scanningengine if newer scanning engine exists.Details of latest version of Anti-Virus softwarePrevious updateLatest updateAntivirus Definition Scan Definition ScanFile Engine File engineNorton Ver.9/20/02 Ver. 4.1.0.15 Ver.9/27/02 Ver. 4.1.0.15Antivirus rev.7 rev.4McAfee Ver.4224 Ver. 4160 Ver.4225 Ver. 4160Antivirus 20 Sept 02 28 Nov 01 25 Sept 02 28 Nov 01CA Antivirus InoculateIT InoculateIT 6.0 InoculateIT 6.0 InoculateIT 6.06.0 e Vet Engine e Signature Vet EngineSignature Signature Ver 23.57.49 SignatureVer 23.57.44 Ver 10.53.4118 27 Sept 02 Ver 10.53.412920 Sept 02 20 Sept 02 27 Sept 02Trendmicro Pattern 351 17 Ver. 6.150 Pattern 353 Ver. 6.150Antivirus Sept 02 27 March 02 24 Sept 02 27 March 02F-Prot File- Sign .def File :-Macro.def File- Sign .def File :-Macro.defAntivirus 14 Sept 2002 06 Sept 02 22 Sept 2002 22 Sept 02Application/ Document/Office Application/ Document/script /Micro/Virus script Viruses Office/Micro/Viruses & & Trojans VirusTrojansQuick-Heal File-weekly.def Engine upgrade File-weekly.def Engine upgradeAntivirus 28 Aug 2002 Definition File 07 Sept 2002 Definition File27 April 02 25 Sept 02Details of URL's from where the latest version of Anti-Virus Definition andScan engine can be downloaded:Norton Antivirus: http://securityresponse.symantec.com/avcenter/download/pages/US-N95.htmlMcAfee Antivirus: http://www.mcafeeb2b.com/naicommon/download/dats/find.aspCA Antivirus: http://support.ca.com/Download/virussig.htmlTrendmicro Antivirus: http://www.trendmicro.com/download/F-Prot Antivirus: http://www.f-prot.com/download/index.htmlQuick-Heal Antivirus: http://www.quickheal.com/default.htm[ 480 ]
FAQs on Anti-virusCircular No.Frequently asked questions on Anti Virus Update requirements<strong>NSDL</strong>/PI/2002/1865 Q. What is Anti Virus Update?Date: October 28,2002A. Anti Virus Update is the process for updating the Virus Definition Fileswhich contain up-to-date Virus signatures and other information thatthe Anti Virus Software uses to protect computer systems against knowncomputer Virus in circulation.Q. What is Anti Virus Upgrade?A. Anti Virus Upgrade is the process for upgrading the ability of the VirusScan Engines to detect newly introduced Virus. With its inbuilt logicand Virus Definition Files, the Virus Scan Engine scans and detectscomputer Virus hidden in any known form. However, new Virus may usemethods that cannot be detected by old Virus Scan Engines. Hence,Anti Virus Software companies provide upgrades whereby, the ability ofthe Virus Scan Engines is further refined.Q. Where can I get information on the latest versions of Virus DefinitionFiles and Virus Scan Engines?A. Anti Virus Software developers provide this information on their websites. You are allowed to download the Virus Scan Engine and VirusDefinition Files from these web sites. The permission for downloadingthe Virus Scan Engine depends on the licensing policy of the softwarevendor.<strong>NSDL</strong> also provides information on its Intranet, http://sqlassist,about the latest Version of Virus Scan Enginesand Virus Definition Filesfor the following Anti Virus Products:1. Norton Anti Virus2. McAfee Anti Virus3. CA innoculate Anti Virus4. Trendmicro Anti Virus5. F-Prot Anti Virus6. Quick Heal Anti VirusQ. What Anti Virus software does <strong>NSDL</strong> recommended?A. <strong>NSDL</strong> does not recommend any specific Anti Virus Software. The AntiVirus Software listed above are some of the popular Anti Virus Softwaresin use.Q. What is the size of Virus Definition Files?A. Size of Virus Definition Files may vary from 1.6 MB to 3.4 MB, dependingon the Anti Virus Software product. However,for the ease of the user,some Anti Virus Software developers provide these files in smallmanageable chunks, which can be individually copied on floppies andtransferred to other computer systems that are not connected to Internetor LAN.Q. How frequently are the Virus Definition Files and the Virus ScanEngines updated?A. Virus Definition Files: Most of the Anti Virus Software developers provideupdates to Virus Definition Files every week. The updates may be release[ 481 ]
overnight if new Virus of serious nature is identified. <strong>NSDL</strong> recommendsthe practice of weekly update for all the systems connected in the DPMLAN.Virus Scan Engines: Most Anti Virus Software Developers provide upgradesto Virus Scan Engines once a month or once in two months. However,the Anti Virus Software developers may release upgrades more frequentlyif the new type of Virus of serious nature with wide spread is discovered.Q. Can I connect the DPM system to Internet for the download?A. <strong>NSDL</strong> does not allow the DPM system (the Server as well as the clients)to be connected to Internet. You may download the files on a separatesystem connected to the Internet and then copy the files to the DPMSystem, for applying the latest Virus Definition Files or Virus ScanEngines.Q. How do I copy Virus Definition Files that are very large, if the AntiVirus Software Site does not provide manageable smaller-sized files?A. <strong>NSDL</strong> recommends the use of floppies or DATs to transfer the downloadedVirus Definition Files from the Internet-connected system to the DPMSystem. However, if it is not possible to copy the downloaded files intofloppies or DATs, you may disconnect the computer (on which you havedownloaded latest updates) from your office LAN and temporarilyconnect the same to the DPM LAN. You may then copy the Virus DefinitionFiles to the DPM system. Please ensure that the said computer isdisconnected from your DPM LAN as soon as you have copied the latestVirus Definition Files.Q. What is the requirement of <strong>NSDL</strong> for Anti Virus Software upgradeand Virus Definition Files update?A. Virus Definition Files should be updated every week. Virus Scan Enginesshould be upgraded as soon as the new Virus Scan Engine is released.Information pertaining to the latest version can be accessed at http://sqlassist.Q. Will we be treated as defaulters, if we do not have the latest versionof Virus Scan Engine or Virus Definition Files?A. <strong>NSDL</strong> inspection team will check the version of the Virus Scan Engine orVirus Definition Files at periodic intervals. In case, you do not have thelatest version of Virus Scan Engine or Virus Definition Files, you will betreated as a defaulter. Further, a penalty may be levied for not upgradingthe Anti Virus Software on server and/or client machine as per theprovisions in Chapter 18 of the Business Rules of <strong>NSDL</strong>.Q. Does <strong>NSDL</strong> provide the latest Virus Definition Files or Virus ScanEngines to its Business Partners?A. No. <strong>NSDL</strong> does not provide Anti Virus Software to Business Partners.However, <strong>NSDL</strong> provides information of prevailing latest versions.Q. Is Annual Subscription Contract (ASC) a must for the users of AntiVirus Software?A. ASC gives you the right to the latest versions of Virus Definition Filesand Virus Scan Engines. Many Anti Virus Software Developers may provide[ 482 ]
Virus Definition Files free of cost to the users. In case of Virus ScanEngines, some of the vendors require the ASC to be signed in order tohave legal access to the upgrades.Q. What should we do if the Internet gets disconnected multiple timeswhile downloading the files?A. This is where the ASC arrangement may help you. You may approachthe local channel partner with whom you have signed the ASC, for thelatest Virus Definition Files and Virus Scan Engines.d. Capacity PlanningDisablement of User IDs that are not complying to System Security PolicyCircular No.Sub: Disablement of User IDs that are not complying to System Security<strong>NSDL</strong>/POLICY/Policy2008/0029Attention of Depository Participants (DPs) is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/Date: April 26, 2008POLICY/2008/0007 dated February 5, 2008 regarding Version 8.0 of DPMsystem. In the Version 8.0, System Security Policy was enhanced to enforcesegregation of duty i.e. maker and checker functions cannot be assigned tothe same user. Further, vide circular no. <strong>NSDL</strong>/POLICY/2008/0021 dated April4, 2008 regarding Version 8.2, DPs were also informed that User IDs notadhering to the aforesaid system security policy would be disabled by May 1,2008.During these version releases, <strong>NSDL</strong> has taken care that existing User IDs andfunctional rights assigned to these User IDs based on segregation of duty arenot modified or disabled in the DPM system so that:1. DPs may continue with their operations after the DPM system upgrade2. DPs may develop and implement appropriate policies for their internaloperations3. DPs may configure the system security as per their needs whilemaintaining existing User IDs with minimum impact on the existingoperations.DPs may use the report-containing list of Invalid User IDs that do not complywith the Security Policy or hold both Maker & Checker rights to take correctiveaction by April 30, 2008.DPs may note that after May 1, 2008, all the User IDs not adhering to thesystem security policy would be disabled in the DPM system.DPM Systems - Capacity planning and operational guidelines for performance optimizationCircular No.All Participants are advised to follow and strictly adhere to the operating<strong>NSDL</strong>/PI/99/065 guidelines to ensure proper functioning of DPM Application Software andDate :January 29,1999 smooth conduct of their business operations.Operational Guidelines for the <strong>NSDL</strong> DPM system<strong>NSDL</strong> has carried out a Benchmark with Single Processor and Dual Processor. Itwas observed that performance of the system is best with up to 8 on-lineusers under single CPU configuration of 266 MHz and 128MB RAM. By addingone more processor, the system should be able to support up to 15 on-lineusers, provided the guidelines below are adhered to.[ 483 ]
Single Processor8 Online Users are allowed with single processor. General guidelines, ifadhered will provide better response to the on line users of the system.Dual Processor15 Online Users are allowed with Dual Processor. General guidelines, ifadhered will provide better response to the on line users of the system. Inorder to recognize dual processor, the Depository Participant is required tore-install Window's NT. The DP has to give prior intimation to <strong>NSDL</strong> regardingthe upgrade. In addition, SQL must be tuned to make proper use of Dualprocessor.General Guidelines1. Back-office batch interface (Exports & Imports) :• These should be run preferably after the end of day (EOD), whenthe interface & communication services are switched off and allusers are logged off.• While taking exports no print reports should be taken & viceversa.• The time taken for export will be much faster if done daily, ascompared to taken over a long period of time. It is preferable notto take back-dated exports as far as possible.• All import files be kept on the server instead of on the clientmachine as the NT file system is different from Windows 95 filesystem.• The DPs should have 128 MB RAM.• While importing transactions, on-line data entry should not becarried out.• Carry out regular Hard Disk housekeeping (<strong>NSDL</strong> Circular No : <strong>NSDL</strong>/PI/98/372 dated August 13, 1998) and keep sufficient space onthe primary drive (C drive) where the software is installed.2. Statement of Holdings/Transactions Reports:• For viewing details of a single client, use the "Client Maintenance->Statement of Holdings/Transactions" option instead of the reportoption. The response will be much faster.• Schedule printing to periods with low on-line activity• Avoid printing when an export is in progress• Provide a specific range of clients and dates instead of openendedranges• Avoid doing a print or print-preview if anyone else is already doingso i.e., print preview or print should be carried out only from oneof the machine.• Preferably, allow print or print-preview only from a restricted setof machines3. On-line transactions and queriesAlways provide specific values for client-ids, ISINs, settlement dates,instruction ids., etc. to enable fast processing. Avoid open-ended ranges.Avoid queries on "Status" field for Account Transfer.[ 484 ]
DPM Capacity Enhancement - server configurationCircular No. <strong>NSDL</strong>/<strong>NSDL</strong>/POLICY/2008/0044Date: June 16, 2008Circular No. <strong>NSDL</strong>/POLICY/2006/0011Date : March 24, 2006Sub: DPM Capacity Enhancement - server configuration<strong>NSDL</strong> had revised the sizing guidelines aligning it with present technology andcomputer processing power available after taking into consideration variousfactors critical for the Participants' operations such as number of clientaccounts, clearing member accounts, transactions per day and client machinesconnected to the Server vide our circular <strong>NSDL</strong>/POLICY/2006/0011 datedMarch 24, 2006. Subsequently, memory related sizing guidelines for DPM systemwith Windows 2003 Server OS were informed vide our circular <strong>NSDL</strong>/POLICY/2008/0033 dated May 20, 2008. As per current sizing guidelines, DepositoryParticipants (DPs) are required to install a new DPM server when they reachthe maximum number i.e. 5 lac Client Accounts in a single set-up.Some DPs have represented to <strong>NSDL</strong> seeking permission to accommodate morethan 5 lac Client Accounts in the same DPM system.In this regard, to facilitate DPs to have more than 5 lac Client Accounts in thesame DPM system <strong>NSDL</strong> has revised the sizing guidelines as given below:S. Server Type CPU* RAM Number Number Number No. of Peak no. ofNo (MB) of Client of Client of CM Transactions/ transactionsMachines Account Account day in 1 Hour1 Desktop as Single 512 3 75,000 50 15,000 3,000Server2 Entry Level Single 512 3 75,000 50 15,000 3,000Server (withoutHardware RAID)3 Entry level Single 512 5 1,00,000 50 22,500 4,500server (withHardware RAID)4 High End Server Single 1024 15 1,50,000 200 40,000 8,0005 High End Server Dual 2048 25 5,00,000 1000 1,00,000 20,0006 High End Server Four 2048 25 7,50,000 1000 1,25,000 25,000* CPU (P-IV 3.0 GHz or above)DPs are advised to regularly monitor the performance of the DPM system andon reaching near the volume limits should initiate necessary upgradationprocess. DPs are once again informed that any system upgradation (installation)should be carried out in consultation with the <strong>NSDL</strong> Help Desk. On completionof the upgrade, DPs are requested to submit the revised Form-B to <strong>NSDL</strong>.Sub : DPM Capacity Enhancement - server configuration<strong>NSDL</strong> has revised the sizing guidelines accommodating present technologyand computer processing power available after taking into considerationvarious factors critical for the Participants' operations such as number ofclient accounts, clearing member accounts, transactions per day and clientmachines connected to the Server.[ 485 ]
Participants are free to choose the brand of the servers / desktop, providedit is Microsoft certified and adheres to the configuration guidelines given by<strong>NSDL</strong>. To find out if the server / desktop that you intend to choose, is Microsoftcertified, you may visit "http://www.microsoft.com/whdc/hcl/search.mspx"website.Participants are advised to regularly monitor the performance of the DPMsystem and on reaching near the volume limits prescribed in the annexure,initiate necessary upgradation process. Participants are once again informedthat any system upgradation (installation) should be carried out in consultationwith the <strong>NSDL</strong> Help Desk. On completion of the upgrade, Participants arerequested to submit the revised Form-B to <strong>NSDL</strong>.AnnexureRecommended Server ConfigurationThe recommended server configuration is dependent on the volume of businessof the Participant.CPU (P-IV 3.0 GHz or above)Server Type CPU RAM Number Number Number Number(MB) of Client of Client of CM of Transa-Machines Accounts Accounts ction / day*Desktop as Server Single 512 3 75000 50 15000Entry Level Server Single 512 3 75000 50 15000(without HardwareRAID)Entry level server Single 512 5 100000 50 22500(with HardwareRAID)High End Server Single 1024 15 150000 200 40000High End Server Dual 2048 25 500000 1000 100000*Note : Number of transaction submitted should not be more than 20% oftotal transactions per day in an hour or 50% of total transactions per dayin 3 hours.# If the volume exceeds any of the above limits then it is recommended thatan additional Windows 2000 Server be installed for the excess volume.Recommended configuration for replacement of the DPM Server for the abovementionedcategories is as follows:Description Hardware SoftwareHigh End Server Dual CPU Intel PIV / Xeon, with MS Windows 2000CPU Speed of 3.0 GHz or higher Server (License to beprocured by theparticipants)[ 486 ]
Description Hardware SoftwareMinimum 1 GB RAMAnti-Virus Softwarefor MS Windows 2000Server (License to beprocured byParticipants)2MB L2 CacheDPM ApplicationSoftware (Providedby <strong>NSDL</strong>)PCI architecture with min. MS SQL 2000 Server5 I/O slots Licence (to beprocured by theParticipants)14" Colour monitor / Keyboard/ WinZip (licensed)/Mouse Zipit Fast software ##Ethernet CardServer Managementsoftware *PCI based SCSI RAID Controller tosupport RAID-1 to RAID-5implementation of SCSI Hard Disks(RAID Controller )1 parallel port , 4 USB ports & 2fast serial ports#4mm, 20/40 GB Digital Audio Tape(DAT) drive (HP/Exabyte/Sony)operating with 90m, 120m & 150mDAT cartridges and interfacingwith SCSI Controller (Used forBack-up purpose)CD ROM drive(min 52x) tointerface with SCSI or IDEControllerOperating System Harddisk :1x146 GB Non Hot Swap/ HotSwap SCSI HDD or 80 GB IDE/SATA HDD for Bootable Partition &interface to the StandardSCSI/IDE/ SATA Controller(Generally, On-boardController)Note: RAIDimplementation for operatingsystem is optional.Database Harddisk : 2x146 GBNon Hot Swap/ Hot Swap SCSIHDDs for RAID-1 or 3x146 GBNon Hot swap SCSI HDDs forRAID-5 implementation &interface to the above RAIDcontroller.[ 487 ]
Description Hardware SoftwareEntry Level Single CPU , Intel PIV/ Xeon, MS Windows 2000Server (with with CPU Speed of 3.0 GHz Server (License to beHardware RAID) or higherprocured by theparticipants)Minimum 1 GB RAMAnti-Virus Softwarefor MS Windows 2000Server (License to beprocured byParticipants)256/512KB/1MB/2 MB L2 Cache DPM ApplicationSoftware (Providedby <strong>NSDL</strong>)PCI architecture with min. MS SQL 2000 Server5 I/O slots Licence (to beprocured by theParticipants)14" Colour monitor / Keyboard/ WinZip (licensed)/Mouse Zipit Fast software ##Ethernet CardServer Managementsoftware *PCI based SCSI RAID Controller tosupport RAID-1 to RAID-5implementation of SCSI HardDisks (RAID Controller )1 parallel port , 3 USB ports &2 fast serial ports #4mm, 20/40 GB Digital AudioTape (DAT) drive (HP/Exabyte/Sony) operating with 90m, 120m& 150m DAT cartridges andinterfacing with SCSI Controller(Used for Back-up purpose)CD ROM drive(min 52x) tointerface with SCSI or IDEControllerOperating System Harddisk :1x146 GB Non Hot Swap/ HotSwap SCSI HDD 0r 80 GB IDE /SATA HDD for Bootable Partition& interface to the Standard SCSI/IDE/SATA Controller (Generally,On-board Controller)Note: RAID implementationfor operating system is optional.Database Harddisk : 2x146 GBNon Hot Swap/ Hot Swap SCSI[ 488 ]
Description Hardware SoftwareHDDs for RAID-1 implementation& interface to the above RAIDcontroller.Entry Level Intel PIV with 3.0 GHz or MS Windows 2000Server (without Higher CPUServer (License to beHardware RAID)procured by thefor Low Endparticipants)DP/SRMinimum 512 MB DDR RAM Anti-Virus Softwarefor MS Windows 2000Server (License to beprocured byParticipants)256/512KB/1MB/2 MB L2 Cache DPM ApplicationSoftware (Providedby <strong>NSDL</strong>)PCI Architecture with min MS SQL 2000 Server3 I/O Slots Licence (to beprocured by theParticipants)2*146 GB ( SCSI) or 2*80 GB WinZip (licensed)/(IDE/ SATA) Hard Disk Drive Zipit Fast software ##to be installed in RAID 1with Software RAID.14" Colour monitor / Keyboard/ Server ManagementMouse software *Ethernet CardCD ROM drive(min 52x) tointerface with SCSI orIDE ControllerInternal SCSI card to supportDAT drive20/40 GB Internal / ExternalDAT Drive (from the existingSERVER) or750 MB Zip Drive . DVD Writeroption may also be considered.(Devices used for back-uppurpose).1 parallel port , 3 USB ports &2 fast serial ports #Desktop as Intel PIV/ Celeron with 3.0 GHz MS Windows 2000Server for Low or Higher CPU Server (License to beEnd DP/SRprocured by theparticipants)[ 489 ]
Description Hardware SoftwareMinimum 512 MB System RAM Anti-Virus Softwarefor MS Windows 2000Server (License to beprocured byParticipants)Minimum 128 KB Cache (Celeron DPM ApplicationCPU), 512KB Cache (PIV CPU) Software (Providedby <strong>NSDL</strong>)PCI Architecture with min MS SQL 2000 Server3 I/O Slots Licence (to beprocured by theParticipants)2*146 GB ( SCSI) or 2*80 GB (IDE/ WinZip (licensed)/SATA) Hard Disk Drive to be Zipit Fast software ##installed in RAID 1 withSoftware RAID14" Colour monitor / Keyboard/ Server ManagementMouse software *Ethernet CardCD ROM drive(min 52x) tointerface with SCSI or IDEControllerDVD Writer or 750 MB Zip Drive(Devices used for Back-up purpose)1 parallel port , 4 USB ports &2 fast serial ports ## The Number of USB ports required would depend on the devices that arerequired to be connected to the server / client## The software Winzip (licensed copy) / Zipit Fast software is required to beinstalled on Windows 2000 Server and on the Client PCs of <strong>NSDL</strong> setupconfigured for email communication with <strong>NSDL</strong> using the Outlook Expresssince the contents of the mails sent to the Participants are in zipped(compressed) format.* Server Management Software is supplied along with the MNC brand servers.For National Brand Servers, Participants are required to consult their servervendors. Participants using the "Desktop as Server" are also required to consulttheir vendor about the tools for monitoring the hardware health of theequipment. It is mandatory for all participant to install "Server ManagementSoftware" . Participants may consult <strong>NSDL</strong> if specific brand of server / Desktopas server does not have their own Server Management Software.DPM System - Recommended hardware configurationCircular No.Participants may be aware that <strong>NSDL</strong> has permitted the use of IBM, Compaq,<strong>NSDL</strong>/PI/2002/1911 HP, Digital, Acer and DELL make desktop computers with Microsoft WindowsDate : November 6, 98 and Windows 2000 - Professional Operating System (OS) for DPM Client2002 workstations.[ 490 ]
Circular No.<strong>NSDL</strong>/PI/2000/705Date : May 12, 2000Participants are hereby informed the aforesaid list is now expanded to includeWipro, HCL, PCS and CMS make desktop computers, which are compatiblewith Microsoft Windows 98 and/or Windows 2000 - Professional OS. Participantsare requested to confirm the compatibility of specific models of these makeswith Microsoft OS by visiting Microsoft web site http://microsoft.com/hwdq/hcl/search.asp prior to procuring the hardware.Further, the minimum configuration of the desktop computers installed as apart of the DPM setup, should be as under:• CPU - Intel Pentium (P II/P III/P IV/Celeron) 333 MHz. Or higher with128KB L2 cache• Memory - 64 MB RAM• HDD - 20GB HDD• NIC (Network Interface Card) - 10 MB Ethernet cardFurther to our Circular No. <strong>NSDL</strong>/PI/2000/032 dated January 12, 2000, as apart of <strong>NSDL</strong>'s continuous evaluation and fine tuning of the performance ofthe DPM system, the recommendations about the configuration of the DPMServer to be used by the Participants for their depository operations fordifferent client / CM accounts and transactions have been revised. Owing tosome improvements achieved in the recent past, the revised figures fordifferent configuration are given in the enclosed Annexure. Theserecommendations are arrived at after taking into consideration various factorsviz; no. of client accounts, no. of CM accounts, no. of transactions per day,no. of client machines connected to the Server, etc.Participants are advised to regularly monitor the performance of the DPMsystem. In case the volumes are nearing the limits prescribed in the Annexure,then the Participants should take steps to plan and implement the upgradationof system well before such limits are reached. Participants are once againinformed that any system upgradation (installation) should be carried out inconsultation with the <strong>NSDL</strong> Help Desk.Sr. CPU RAM No. of No. of No. of No.No (MB) Client CM Transac- of WinAccounts Accounts tions 95 Clientper day Machines1 Single 64 30,000 100 6,000 Upto 42 Single 128 50,000 200 10,000 5 - 83 Dual 256 1,00,000 400 20,000 9 - 12#4 Dual 512 2,50,000 600 40,000 13 - 16# If the volume exceeds any of the above limits then it is recommendedthat an additional NT Server be installed for the excess volume.The following "pre-requisites" are necessary for achieving normalperformance:1. New account opening/account modification is limited to 1,500 per dayfor server with 256-512 MB memory and 500 per day for server with 64-128 MB memory.2. For configuration of Dual CPU and 512 MB RAM, Participant must behaving leased line connectivity with <strong>NSDL</strong> (minimum 64 KBPS)3. In case of Single CPU Servers, minimum speed required is 200 MHz.[ 491 ]
Circular No.<strong>NSDL</strong>/PI/2000/032Date: January 12,20004. In case of Dual CPU Servers, minimum speed required is 400 MHz withhigh-end disks and multiple disk controllers.5. It is assumed that on an average client has positions in 8 ISINs.6. It is assumed that on an average Clearing Member settles 50 ISINs persettlement.7. Maximum account transfers are limited to 20,000 per day.8. Routine Housekeeping , Reorg and Archival has to be performed.9. Operational guidelines notified by <strong>NSDL</strong> must be abided by theParticipant.10. Sufficient hard disk capacity should be available on the NTServer (Referoperational guidelines).11. Participant must abide by the Archival policy as may be notified by<strong>NSDL</strong> from time to time.As a part of <strong>NSDL</strong>'s continuous evaluation and fine tuning of the performanceof the DPM system, the recommendations about the configuration of the DPMServer to be used by the Participants for their depository operations fordifferent client / CM accounts and transactions have been laid down andrevised from time to time. Owing to some improvements achieved in therecent past, the revised figures for different configuration are given in theenclosed Annexure. These recommendations are arrived at after taking intoconsideration various factors viz; no. of client accounts, no. of CM accounts,no. of transactions per day, no. of client machines connected to the Server,etc.Participants are advised to regularly monitor the performance of the DPMsystem. In case the volumes are nearing the limits prescribed in the Annexure,then the Participants should take steps to plan and implement the upgradationof system well before such limits are reached. Participants are once againinformed that any system upgradation (installation) should be carried out inconsultation with the <strong>NSDL</strong> Help Desk.Recommended Hardware ConfigurationThe recommended configuration is dependent on the volume of business ofthe Participant.Sr. CPU RAM No. of Client No. of CM No. ofNo Accounts Accounts Transactionsper Day1 Single 64 MB 30,000 100 6,0002 Dual 256 MB 60,000 200 12,000# 3 Dual 512 MB 1,50,000 500 20,000# If the volume exceeds any of the above limits then it is recommendedthat an additional NT Server be installed for the excess volume.Following "prerequisites" are assumed for achieving normal performance:• Business Partner confirms to the operational usage guidelines circulatedby <strong>NSDL</strong>.• Sufficient hard disk capacity is available on the NT Server (Referoperational guidelines).• Routine housekeeping and Reorg is performed.[ 492 ]
• If Memory is 64 MB then Number of Win 95 client machines is assumedto be less than five.• If the number of Win 95 client machine exceeds five then the minimummemory required is 128 MB or more (Depending on number of additionalclients).• Single CPU machines speed should be minimum 200 MHz or more.• Dual CPU machines speed should be minimum 400 MHz or more andhave high-end disks with multiple disk controllers.• On an average client has positions in 8 securities.• On an average CM settles 50 ISINs per settlement.New account opening/account modification is limited to 1,000 per day forserver with 512 MB memory and 500 per day for server with 64-256 MB memory.Low End DPM System - Recommended hardware configurationCircular No.<strong>NSDL</strong> has been exploring the possibility of DPM operations being conducted<strong>NSDL</strong>/PI/2003/0295 on Desktop class hardware for Participants having low level of activity. BasedDate : February 21, on the analysis, if Participants have the following level of activity, it can be2003 permitted to operate on low-end Desktop class hardware with Windows 2000server OS instead of Server class hardware:Max. number of client accounts without CM accounts - 7500Max. number of Transactions per day - 2000Database size not exceeding - 600 MBMaximum number of work-stations - 3Participants who wish to opt for Desktop class hardware must ensure that theminimum configuration of the same should be as under:• Intel PIV with 500 MHz. or higher CPU• 512 MB System RAM• 2 * 20 GB (7200 RPM) IDE HDD to be installed in RAID I configurationusing software RAID• PCI Ethernet Card• Internal SCSI card to support DAT drive• 12 / 24 GB Internal / External DAT Drive (from the existing Server) OR700 MB Zip driveParticipants will have to upgrade their Desktop class hardware to server classhardware if the level of activities go beyond the aforesaid limits. In caseParticipants wish to replace their existing Server class hardware with Desktopclass hardware, they may contact <strong>NSDL</strong> help desk.DPM Systems - Recommended hardware configuration after implementing archival systemCircular No.All Participants are hereby informed that <strong>NSDL</strong> has enhanced the capacity of<strong>NSDL</strong>/PI/2000/2171 DPM system to service more number of client accounts. The capacityDate : November 28, enhancement to service 3.5 lakh client accounts from the earlier limit of 2.52000 lakh accounts is possible only after implementing an archival system andarchiving of more than 3 months old "Closed, Settled" instructions and closedaccounts information.Details of the DPM server hardware configuration and the number of accountsit can service is enclosed herewith as Annexure - I.[ 493 ]
Sr. CPU RAM No. of No. of No. of No.No (MB) Client CM Transac- of WinAccounts Accounts tions 95 Clientper day Machines1 Single 64 30,000 100 6,000 Upto 42 Single 128 75,000 200 10,000 5 - 83 Dual 256 1,50,000 400 22,500 9 - 12#4 Dual 512 3,50,000 1000 50,000 13 - 16# If the volume exceeds any of the above limits then it is recommendedthat an additional NT Server be installed for the excess volume.Following "prerequisites" are assumed for achieving normal performance:1. Participant conforms to the operational usage guidelines circulated by<strong>NSDL</strong>.2. Batch reports (statement of holding and statement of transactions) mustnot be carried out during the day.3. Sufficient hard disk capacity is available on the NT Server (referoperational guidelines).4. Routine Housekeeping, Re-org and Archival are performed.5. Single/Dual CPU speed should be minimum 400 MHz. In addition, DualCPU machines must have high-end disks with multiple disk controllers.6. On an average client has positions in 8 securities.7. On an average CM settles 50 ISINs per settlement.8. New account opening/account modification is limited to 1,500 per dayfor server with 256-512 MB memory and 500 per day for server with 64-128 MB memory.9. Maximum account transfer instructions are limited to 20,000 per day.10. For configuration of Dual CPU and 512 MB RAM, Participant must be onleased line (minimum 64 KBPS)Participant must Archive more than 3 months old "Closed, Settled" transactionsand closed accounts information in order to scale up to 3,50,000 clientaccounts.Upgradation of DPM Server operating system (OS) software from Windows 2000 server OS toWindows 2003 Server OSCircular No.Sub : Upgradation of DPM Server operating system (OS) software from<strong>NSDL</strong>/POLICY/Windows 2000 server OS to Windows 2003 Server OS2008/0033At present, <strong>NSDL</strong>'s DPM Server software works on Microsoft's Windows 2000Date : May 20, 2008Server OS. Windows 2000 Server OS was launched in 2000-2001. Subsequently,Microsoft has withdrawn support for the same sometime in 2004-2005. <strong>NSDL</strong>had informed Depository Participants (DPs) regarding upgradation of DPMServer software to higher version of OS i.e.Windows 2003 server OS duringthe DP Conferences held in October 2007 and April 2008. The DPM softwareversion 8.2 is qualified to work with Windows 2003 Server OS - StandardEdition (Service Pack 1).DPs may note that Microsoft provides a free upgrade to next version if thelicense is covered under Software Assurance Program. However, if the licenseis not covered under this provision, DP is required to procure the Windows[ 494 ]
2003 Server OS - Standard Edition (Service Pack 1) license as per the presentnorms of Microsoft.It is understood that Microsoft policy allows the use of Windows 2000 ServerOS, if you have Windows 2003 Server OS license. DPs are required to reconfirmwith their vendors. This is required till <strong>NSDL</strong> migrates the DPM setupof the DPs from Windows 2000 Server to Windows 2003 Server OS. <strong>NSDL</strong> plansto migrate all DPM setups to Windows 2003 Server OS by end of August 2008.Microsoft has indicated that minimum memory requirement for Windows 2003Server OS is 512 MB and minimum processor speed required is 1 GHz.Accordingly, memory related sizing guidelines for DPM system with Windows2003 Server OS is as follows:Server Type CPU RAM Number Number Number Number(MB) of Client of Client of CM of Transa-Machines Accounts Accounts ction / dayDesktop as Server Single 512 3 75,000 50 15,000Entry Level Server Single 512 3 75,000 50 15,000(without HardwareRAID)Entry level server Single 512 5 1,00,000 50 22,500(with HardwareRAID)High End Server Single 1024 15 1,50,000 200 40,000High End Server Dual 2048 25 5,00,000 1,000 1,00,000DPs are required to ensure that their DPM system meets above statedrequirements by June 2008. DPs must file revised Form B with <strong>NSDL</strong> for theupgrade carried out.<strong>NSDL</strong> will not qualify future software releases after August 2008 on Windows2000 Server OS and hence does not guarantee the working of the DPM softwareon the same thereafter.Migration activity will involve formatting of the C Drive & installation ofWindows 2003 Standard Server OS software. Those DPs who have alreadyprocured the Windows 2003 Server OS licenses and have their DPM systemmeeting the required specifications may contact the Helpdesk of <strong>NSDL</strong> forscheduling the upgrade. The upgrade to Windows 2003 Server OS must bedone only in consultation with Helpdesk.The detailed upgrade procedure & schedule will be intimated by <strong>NSDL</strong> Helpdeskshortly.Change in Operating System for DPM Server to Windows 2000 and changes in Server ConfigurationsCircular No.Participants were advised, vide our Circulars No. <strong>NSDL</strong>/PI/2001/ 1179 and<strong>NSDL</strong>/PI/2002/2068 <strong>NSDL</strong>/PI/2002/1174 dated July 30, 2001 and July 18, 2002 respectively, toDate : December 2, acquire Windows 2000 server Operating System (OS) and to upgrade the server2002 hardware in accordance with the configuration specifications provided therein,to suit their volume of operations.All Participants are hereby informed that <strong>NSDL</strong>'s DPM Application Software isnow qualified to work with Windows 2000 server OS. For upgrading the DPMSystem to Windows 2000 server OS, Participants are hereby advised to complywith the following:(1) Upgradation to Windows 2000 server OS should be undertaken for allservers, viz; main DPM server, onsite backup server, off-site backupserver (if installed) and the server for housing Archival database (if aseparate server is in use) within a span of two weeks.[ 495 ]
(2) The hardware configuration for all servers for which upgradation isbeing undertaken, are in line with configuration guideline provided inaforesaid circulars.(3) Main DPM server must feature a separate Hard Disk Drive (HDD) for OS.HDD for OS need not have RAID implementation. For OS, it is not a mustto use HDD featuring SCSI (Small Computer System Interface).Participants may use HDD featuring IDE (Integrated Drive Electronics)interface if supported by the server model in/to be use/used. The reloadingof current Windows NT OS onto a separate disk should beundertaken only after obtaining clearance from <strong>NSDL</strong> Help Desk.Participants should note that version 3.4 of the DPM Application Software willbe the last version supported on Windows NT OS. All subsequent releases ofDPM Application Software will be qualified to work only with Windows 2000server OS, till further notice. Participants who choose to continue workingwith Windows NT OS in the interim, must install Service Pack 6A. In caseParticipants require any further clarifications in this regard, they can contacton (022) 2497 5208.Further, all upgradation of hardware / Windows 2000 server OS must beintimated to <strong>NSDL</strong> through revised form-B. <strong>NSDL</strong> Help Desk will providetechnical guidance and schedule migration to Windows 2000 server OS. Themigration to Windows 2000 server OS, viz; main DPM server, onsite backupserver, off-site backup server (if installed) and the server for housing Archivaldatabase (if a separate server is in use), should be done only after technicalclearance from <strong>NSDL</strong> Help Desk.Circular No.Further to our Circular No. <strong>NSDL</strong>/PI/2001/1179 dated July 30, 2001 regarding<strong>NSDL</strong>/PI/2002/1174 upgrading the Operating System (OS) of the DPM server to Windows 2000Date: July 18, 2002 server OS, all Participants are hereby informed that <strong>NSDL</strong> will completequalification of current DPM Application Software to work with Windows 2000server OS by end of August 2002. Participants may also note that version 3.4of the DPM Application Software will be the last version supported on WindowsNT 4.0 OS.Participants who are yet to procure Windows 2000 server OS may note thatMicrosoft has extended Version Upgrade scheme (VUP) till July 2002, whichoffers concession in upgrade price. Participants may therefore acquire theWindows 2000 server OS before the close of the VUP, else Participants willhave to procure Windows 2000 server OS at the full prevailing price. Further,Participants are advised to note that Service Pack (SP) 6A patch is required tobe applied to the Windows NT 4.0 OS. SP 6A is being sent to Participantsalongwith the DPM Application Software Version 3.2 (integrated) CD, whichshould be applied immediately.Attention of Participants is invited to our aforesaid circular regarding therequirement of minimum hardware configuration of DPM for Windows 2000server OS. Participants whose DPM server does not meet the configurationrequirements of Windows 2000 server OS are advised to upgrade their hardwareof DPM server at the earliest, as sourcing of the same for old models ofhardware may be difficult at a later date.Attention of Participants is also invited to our Circular No. <strong>NSDL</strong>/PI/2001/1695 dated November 6, 2001, advising Participants to have separate harddisk on the DPM server, i.e. non-RAID disk for DPM server OS and RAID disk forDPM Database. Participants are advised to ensure the same while upgradingthe DPM server.[ 496 ]
Further, all upgradation of hardware / Windows 2000 server OS should beundertaken after submission of revised form-B to <strong>NSDL</strong> and obtaining a detailedtechnical guidance and clearance from <strong>NSDL</strong> Help Desk.Circular No. In continuation of our Circular No. <strong>NSDL</strong>/PI/2001/1179 dated July 30, 2001<strong>NSDL</strong>/PI/2001/1695 regarding hardware requirement for upgrading the Operating System (OS) ofDate : November 6, DPM Server to Windows 2000, all Participants are requested to note that2001 current DPM Server processing speed is suitable for upgrading to Windows2000 OS. However, the memory of the server need to be upgraded as per theguidelines of the aforesaid circular.Participants planning to upgrade the server processing speed or replace theexisting server, may note that the minimum CPU speed shall be 800 mhz asmentioned in the aforesaid circular. Also, please adhere to the memory andhard disk guidelines as mentioned in the aforesaid circular.It may also be noted that as per the new guidelines, the server need not bemultiple CPU upgradable (Dual or Four CPU). You may choose to procure nonupgradable single CPU server, so long as your operations are within the sizingguidelines stipulated by <strong>NSDL</strong> for single CPU server. It is also not mandatoryto install Hotswap bays for hard disks, but does need a separate hard disk(not configured in RAID) for the OS installation.Circular No.All Participants are aware that <strong>NSDL</strong>'s DPM Server software works on Microsoft's<strong>NSDL</strong>/PI/2001/1179 Windows NT version 4.0 Operating System (OS). Microsoft's standard practiceDate : July 30, 2001 is to support product for a period of five years from the time it is launched.As Windows NT was launched in 1997-1998, Microsoft may withdraw supportfor the same sometime in 2002-2003. <strong>NSDL</strong> is therefore planning to upgradeits DPM system to work with Windows 2000 Server OS sometime in 2002.Microsoft has informed to <strong>NSDL</strong> that they have revised their pricing policywith effect from October 1, 2001. As per the revised price structure, Microsoftwill abolish its existing pricing policy of charging 50% of the full price of thesoftware for upgrades and the users will have to pay the full price of thesoftware, even for version upgrade (VU).Participants are advised to take a note of Microsoft's pricing policy and mayconsider availing upgrade to Windows 2000 Server OS before October 1, 2001after making an arrangement to continue to use current Windows NT 4.0 OS,till <strong>NSDL</strong> upgrades its DPM system to work with Windows 2000 Server OS.Microsoft has indicated that minimum memory requirement for Windows 2000Server OS is 256MB and minimum processor speed required is 133MHz.Accordingly, memory related sizing guideline for DPM system under Windows2000 Server OS stands revised as follows:CPU RAM Number Number Number Number(MB) of Client of of ofMachines Client CM Transactions/Accounts Accounts daySingle 256 4 30000 100 6000Single 512 8 75000 200 10000Dual 512 12 150000 400 22500Dual 1024 16 350000 1000 50000• As the upgradation of the server may be difficult later, Participantsmay consider undertaking the required upgradation now and submit arevised FORM-B immediately after the DPM Server is upgraded.[ 497 ]
• In case the upgradation of your DPM Server is not possible, then thepresent DPM sever will have to be replaced before migrating to Windows2000 Server OS. <strong>NSDL</strong> will give atleast 3 months advance notice formigration to Windows 2000 Server OS. Recommended minimumconfiguration for replacement of the DPM Server is as follows;• Intel PIII / Xeon with CPU speed of 800 Mhz or higher single OR 700 MHzor higher respectively with 256KB L2 Cache (No. of processors shouldatleast be same as the present server.)• Minimum 256MB, 60 nano sec ECC RAM or SDRAM on 1 SIMM/DIMM. Pleaserefer to abovementioned sizing guideline table for memoryconfiguration.• PCI architecture with min.5 I/O slots• PCI Based VGA Controller With Minimum 1 MB VRAM OR AGP Based VGAController With Minimum 2 MB VRAM• 14" SVGA Colour monitor• PCI based Ethernet Card• PCI based SCSI RAID Controller to support RAID-1 to RAID-5implementation of SCSI Hard Disks (RAID Controller )• 1 parallel port & 2 fast serial ports.• 4mm, 20/40 GB Digital Audio Tape (DAT) drive (HP/Exabyte/Sony)operating with 90m, 120m & 150m DAT cartridges and interfacing withSCSI Controller• CD ROM drive(min 12x) to interface with SCSI or IDE Controller• 1x18 GB Non Hot Swap SCSI HDD for Bootable Partition & interface tothe Standard SCSI (Generally on-board SCSI Controller)• 2x18 GB Non-Hot Swap SCSI HDDs for RAID-1 or 3x18 GB Non-Hot swapSCSI HDDs for RAID-5 implementation & interface to the above RAIDcontroller. (New system must feature same usable disk capacity fordatabase partition and OS partition after RAID implementation.)• 104 Keys Keyboard• PS/2 MouseFurther, as per the proposed pricing policy of Microsoft, after upgrading toWindows 2000 Server OS, Participants can avail patches, updates and upgradesfor a period of 2 years through Software Assurance (SA) program upon upfrontpayment of around 58 % of the product price. As per revised pricing policyproposed by Microsoft, SA will be renewable on an annual basis after initialperiod of 2 years as per the then prevailing rate. In case Participants do notsubscribe to SA then upgrade can be availed only at full (100%) price of theproduct then. In view of this, Participants need to make their own decisionabout subscribing to SA.❑ ❑ ❑[ 498 ]
NOTES[ 499 ]
NOTES[ 500 ]
Section 2 (1) (g)Regulation 21Regulation 22(1)Regulation 22 (2)Regulation 2314. Renewal of RegistrationParticipant means a person registered as such under sub-section (1A) of section12 of the Securities and Exchange Board of India Act, 1992.The certificate of registration issued under regulation 20, or renewed underregulation 22 shall be valid for a period of five years from the date of its issueor renewal, as the case may be.Three months before the expiry of the period of validity of a certificate ofregistration, the participant shall, if it so desires, make an application forrenewal in Form E through the depository in which it is a participant.The application for renewal under sub-regulation (1) shall accompany thefee specified for issue of certificate of registration and shall be dealt with inthe same manner as if it were a fresh application for grant of Certificate ofregistration.The Board may renew a certificate of registration granted to a participantsubject to the conditions of certificate of registration specified in regulation22.Submitting Documents Or information to SEBICircular No.As Participants may be aware, when an application for renewal of certificate<strong>NSDL</strong>/PI/2005/0397 of registration is being considered by SEBI,Participants are required toDate: March 4, 2005 promptly notify SEBI regarding any change in the information submitted bythe Participants to SEBI.In this context, Participants are hereby informedthat SEBI has issued a warning to one of the Participants for not providingproper and timely information. Participants are hereby advised to exercisedue care while submitting information / documents to SEBI.Participants are further advised to follow the guidelines issued by SEBI videtheir circular SEBI/MIRSD/DR-2/SRP/Cir-2/2005 dated January 4, 2005 (copyenclosed) regarding renewal of Certificate of Registration as a Participant.Annexure IDEPUTY GENERAL MANAGERMarket Intermediaries Regulation &Supervision DepartmentSEBI/MIRSD/DR-2/SRP/Cir - 2/ 2005January 4, 2005To1. <strong>NSDL</strong>/CDSL2. All Registeredi. Depository Participantsii. Merchant Bankersiii. Registrars to an Issue and Share Transfer Agents[ 501 ]
iv. Debenture Trusteesv. Bankers to an Issuevi. Underwritersvii. Credit Rating AgenciesDear Sir / Madam,Sub: Renewal of Certificate of RegistrationSection 12 of the SEBI Act, 1992 requires that any intermediary in the capitalmarket shall function as such only under a Certificate of Registration issuedby SEBI. The SEBI Regulations pertaining to certain intermediaries requirethat the Certificate shall be valid for a specified period and shall be requiredto be renewed thereafter. These Regulations requires an intermediary to makean application for renewal three months before the expiry of the validity ofthe certificate of registration.However, it is noticed that at times application for renewal is not made intime. It is also possible that an application for renewal made by an intermediaryis not disposed off by the expiry of the registration. As a result, theintermediary and its clients are not quite clear if the intermediary can continueto act as intermediary after expiry of registration. This circular intends toclarify these matters:1. If the application for renewal is not received at SEBI by the expiry dateof the certificate of registration, the intermediary shall:a. cease to be an intermediary on the date of such expiry,b. stop carrying on the activities of the intermediary from the dateof such expiry, andc. transfer, wherever relevant, the accounts / business of existingclients to another registered intermediary before the date of suchexpiry.If the intermediary fails to comply with all of the above, it will beconsidered as a violation of section 12 and may attract action underthe relevant provisions of SEBI Act, 1992, and/or the Regulations framedthere under.No application for renewal can be made after the date of expiry ofregistration. After the expiry of registration, the erstwhile intermediarycan apply for registration, which will be considered as a fresh applicationfor registration made under the relevant Regulations.2. If the application for renewal is received at SEBI less than 3 monthsbefore the expiry of registration and SEBI has not advised otherwise bythe date of expiry of registration, the intermediary shall stop undertakingany fresh business / clients from the date of expiry of the registration.SEBI may initiate any action that may be deemed appropriate for latesubmission of application under the provisions of the SEBI Act, 1992 andthe regulations framed there under.[ 502 ]
It is clarified that in the above cases, the application for renewal shallmean the application complete in all respects. Incomplete applicationwill be treated as no application.3. If renewal is not granted by SEBI for whatever reason, the intermediaryshall:a. cease to be an intermediary on the date of expiry of registrationor the date of receipt of communication of refusal to grantrenewal,b. stop carrying on the activities of the intermediary from the dateas at (a) above, andc. transfer, wherever required, the accounts / business of existingclients to another registered intermediary within such period asmay be specified.If the intermediary fails to comply with all of the above, it will beconsidered as violating section 12 and shall be liable for action underthe relevant provisions of SEBI Act, 1992, and/or the provisions of Rulesand Regulations framed there under.4. If an intermediary wishes to surrender the registration voluntarily beforethe expiry of the registration, it shall transfer, wherever relevant, theirexisting business / client accounts to another SEBI registeredintermediary, before they make request to SEBI for accepting thesurrender the certificate of registration.5. The intermediary may, if he so desires, make a representation fordispensing with the procedure, along with the application, for surrenderin terms of the first proviso to regulation 16(1) of the SEBI ( Procedurefor Holding Enquiry by Enquiry Officer and ImposingPenalty ) Regulations, 2002 in the prescribed format (enclosed with theCircular).6. In all cases of transfer of business or client accounts to another registeredintermediary as above, the clients shall not be subjected to anyadditional cost.Yours faithfully,S. R. PrasadEncl : As above[ 503 ]
Letter of Representation for Depository ParticipantsTo,Securities and Exchange Board of IndiaMittal Court, 'B' Wing, Nariman PointMumbai 400 021Dear Sir,Sub: Surrender of Certificate of Registration as DepositoryParticipant, of M/s. , Registration No.1. We hereby surrender our certificate of registration as DepositoryParticipant.2. We enclose the original certificate of registration (or indemnity in casethe certificate is lost or stolen) for cancellation.3. We hereby confirm that:a. no complaint /disciplinary proceeding is pending against us;b. no investigation / inquiry by SEBI is pending against us with respectto our activities as a Depository Participant;c. as on date of application, we have paid all fees;d. we shall continue to be liable for all liabilities/obligations(including monetary penalties, if any) for violations, if any, ofthe provisions of the SEBI Act and the SEBI (Depository Participant)Rules and Regulations, 1996 that have taken place before oursurrender of certificate of registration;e. we have no pending assignments/mandates as a DepositoryParticipant;f. all our client accounts have been transferred to another registeredDepository Participant i.ewith RegistrationNo. ;g. we have issued a public notice in a widely circulated national anda vernacular daily datedinforming surrenderof our registration as Depository Participant.(Please enclose aclipping of the said public notice.)*4. We hereby request SEBI to dispense with the procedure laid down inRegulation 16(1) of the SEBI (Procedure for Holding Enquiry by EnquiryOfficer and Imposing Penalty) Regulations, 2002 while processing ourrequest for surrender of certificate of registration.Thanking you,Yours faithfully,Name:(Whole time/Managing Director/Principal Officer)* Please strike off, if not applicable.[ 504 ]
NOTES[ 505 ]
NOTES[ 506 ]
15. Mutual FundCircular No.Sub: Reference circulars - Facility for holding Mutual Fund Units in<strong>NSDL</strong>/POLICY/dematerialised form2010/0082 As all Participants are aware, <strong>NSDL</strong> has enabled holding of Mutual Fund UnitsDate: July 20, 2010 (represented by Statement of Account) in dematerialised form for its demataccount holders. Various circulars issued in this regard are given below forthe information of Participants for easy reference:Sr. Subject Policy Circular Circular DateNo.Ref. No.1 New security type code ‘20’ for <strong>NSDL</strong>/POLICY/ November 14,Mutual Fund Units (TRASE) added 2009/0107 2009in DPM System.2 Subscription and redemption of <strong>NSDL</strong>/POLICY/ December 5,Mutual Fund Units in 2009/0116 2009dematerialised form throughStock Exchange platform.3 Footnote in the Transaction <strong>NSDL</strong>/POLICY/ January 4,Statements provided to Clients 2010/0002 2010regarding holding of Mutual FundUnits in dematerialised form.4 SMS Alerts for credits / debits of <strong>NSDL</strong>/POLICY/ January 6,Mutual Fund Units in demat 2010/0003 2010accounts.5 Conversion of existing Mutual <strong>NSDL</strong>/POLICY/ March 9, 2010Fund units represented by 2010/0024Statement of Account intodematerialised form - throughAsset Management Company /Registrar and Transfer Agent.6 Display of ISINs of Mutual Fund <strong>NSDL</strong>/POLICY/ March 27, 2010(activated under security type 2010/0032code 20) in the TransactionStatement.7 No fee to be levied on <strong>NSDL</strong>/POLICY/ March 30, 2010Participants in respect of 2010/0034transactions in mutual fundunits held in thedepository system tillSeptember 30, 2010.8 Display of value of mutual <strong>NSDL</strong>/POLICY/ June 25, 2010fund holdings on IDeAS facility 2010/0070based on NAV.9 Release of DPM System Version <strong>NSDL</strong>/POLICY/ June 25, 201013.0 - Conversion of Mutual 2010/0069Fund units represented byStatement of Account throughDPM System.10 Daily Price file to include NAVs <strong>NSDL</strong>/POLICY/ June 30, 2010for Mutual Fund Units. 2010/0072[ 507 ]
11 Amendments to Business Rules - <strong>NSDL</strong>/POLICY/ July 1, 2010Conversion of Mutual Fund Units 2010/0075Represented By Statement ofAccount into dematerialisedform through a Participant.12 Release of DPM System <strong>NSDL</strong>/POLICY/ July 2, 2010Version 13.0 – Redemption of 2010/0077Mutual Fund Units throughnew module in the DPM System.13 Updated list of Mutual Funds <strong>NSDL</strong>/POLICY/ July 7, 2010which have joined <strong>NSDL</strong> and 2010/0079the list of ISINs.14 Back-office batch interface <strong>NSDL</strong>/POLICY/ July 16, 2010with the DPM System for 2010/0081conversion of Mutual FundUnits enabledCircular No.Sub: Release of DPM System Version 13.0 - Back-office batch interface<strong>NSDL</strong>/POLICY/with the DPM System for conversion of Mutual Fund Units enabled2010/0081 Attention of Participants is invited to <strong>NSDL</strong> Circular No. <strong>NSDL</strong>/POLICY/2010/Date: July 16, 2010 0069 dated June 25, 2010 regarding release of DPM System Version 13.0 whereinfacility to convert Mutual Fund units [represented by Statement of Account(SoA)] into dematerialized form through DPM System was provided. DPM SystemVersion Release 13.0 enabled Participants to initiate conversion requests throughthe front end application of DPM System with effect from July 3, 2010.Participants were also requested to make necessary changes to their backoffice by July 11, 2010 as per the file formats enclosed in the aforesaid circular.All Participants are hereby informed that back-office batch interface with theDPM System for uploading conversion requests in respect of mutual fund units(security type code ‘20’) will be enabled with effect from Saturday July 17,2010.Circular No.Sub: Conversion of existing Mutual Fund units represented by Statement<strong>NSDL</strong>/POLICY/ of Account into dematerialised form through Participants2010/0079 Attention of Participants is invited to <strong>NSDL</strong> Circular No.: <strong>NSDL</strong>/POLICY/2009/Date: July 7, 2010 0116 dated December 5, 2009 enabling holding of mutual fund units indematerialised form pursuant to SEBI circular No. SEBI/IMD/CIR No.11/183204/2009 dated November 13, 2009 for transacting in Mutual Funds Schemes throughStock Exchange Infrastructure and <strong>NSDL</strong> Circular Nos.: <strong>NSDL</strong>/POLICY/2010/0024 dated March 9, 2010 and <strong>NSDL</strong>/POLICY/2010/0075 dated July 1, 2010informing the procedure for conversion of existing Mutual Fund unitsrepresented by Statement of Account (SoA) into dematerialised form throughAsset Management Company (AMC)/ Registrar and Transfer Agent (RTA)/Depository Participant.The updated list of Mutual Funds which have joined <strong>NSDL</strong> is given in Annexure-A and the list of ISINs is enclosed in Annexure-B.Circular No.Sub: Amendments to Business Rules<strong>NSDL</strong>/POLICY/All Participants are hereby informed that <strong>NSDL</strong> has decided to provide a facility2010/0075 for investors to submit request for conversion of their mutual fund unitsDate: July 1, 2010 represented by Statement of Account into dematerialised form throughParticipants. In this context, Participants are advised to note that Rules 11.7.1to 11.7.11 and Annexure B (as enclosed) have been inserted in the BusinessRules of <strong>NSDL</strong>. The new Rules are given below:[ 508 ]
“11.7 CONVERSION OF MUTUAL FUND UNITS REPRESENTED BY STATEMENTOF ACCOUNT INTO DEMATERIALISED FORM THROUGH A PARTICIPANT11.7.1 Every Client desirous of converting mutual fund unitsrepresented by Statement of Account into dematerialisedform through a Participant shall submit to the Participantthe Conversion Request Form alongwith the Statement ofAccount evidencing the holding of mutual fund units.The specimen of Conversion Request Form is given inAnnexure B.11.7.2 The Client submitting the Conversion Request Form shalldeclare to the Participant that the units sought to be heldin dematerialised form are in the name of the client itselfand are not already dematerialised and no certificates areissued against these units.11.7.3 The Client shall submit separate Conversion Request Formfor its each folio number with the Issuer and/or its Registrarand Transfer Agent and for each of its account with theParticipant.11.7.4 The Client shall submit a separate Conversion Request Formfor locked in and free units under the same ISIN.11.7.5 The Participant shall first ensure that the mutual fund unitssubmitted by its Client for conversion belong to the list ofsecurities admitted by the Depository as eligible to be heldin dematerialised form.11.7.6 The Participant shall ensure that the Conversion RequestForm submitted by its Client is completely filled and dulysigned.11.7.7 The Participant shall verify the name and the pattern ofholding of the Client’s account with the name and thepattern of holdings as mentioned on the Statement ofAccount and Conversion Request Form. Further, theParticipant shall verify all other details and verify thenumber of pages of Statement of Account mentioned onthe Conversion Request Form with the Statement of Accountsubmitted by the Client.11.7.8 The Participant shall intimate the Conversion Request tothe Depository. After writing the Conversion RequestNumber on the Conversion Request Form and retaining acopy of the form, forward the Conversion Request Formalongwith the Statement of Account to the Issuer or itsRegistrar and Transfer Agent.11.7.9 The Conversion Request Form shall be forwarded by theParticipant to the Issuer or its Registrar and Transfer Agentwithin seven days of accepting the same from its Client.11.7.10 The Issuer or its Registrar and Transfer Agent shall afterdue verification promptly confirm the conversion requestto the Depository for credit of the units into the accountof the Client.11.7.11 In case any objection memo has been received for suchunits from the Issuer or its Registrar and Transfer Agent,the Participant shall facilitate the correction of suchobjections on a timely basis.”[ 509 ]
ANNEXURE BParticipant’s Name, Address & DP ID(Pre-printed)CONVERSION REQUEST FORM FOR EXISTING MUTUAL FUND UNITS(REPRESENTED BY STATEMENT OF ACCOUNT) INTO DEMATERIALISEDFORM - THROUGH <strong>DEPOSITORY</strong>PARTICIPANTSerial No (Pre Printed) Date: _______________I/We request you to convert the following units represented by Statement ofAccount (enclosed) issued by the Issuer into my/our account as per the detailsgiven below:Client IDSole/First Holder NameSecond Holder NameThird Holder NameType of SecurityMF Units/Others (please specify)Folio NumberDetails of Units:Free UnitsLocked-in UnitsISIN Mutual Fund Unit Description Quantity CRNName(To be filledin byParticipant)Total No. of pages of Statement of Account: ______________Details of Locked-in units (if any):ISIN Lock-in reason Lock-in release dateNotes:1. In case the space is found to be insufficient, an annexure containing thesaid details in the same format may be attached.2. Please use separate form for free units and locked-in units[ 510 ]
DeclarationI/We hereby declare that the above mentioned units are registered in my/our name and are not already dematerialised and no certificates are issuedagainst these units. I/We also hereby declare that the units requested byme/us for conversion into dematerialised form are free from any lien or chargeor encumbrance and represent the bonafide units of the Issuer to the best ofmy/our knowledge and belief.Holder(s)Signature(s)Sole/First HolderSecond HolderThird HolderParticipant AuthorisationWe have received the abovementioned units for conversion into dematerialisedform. It is certified that the holders of the securities have beneficiary accountwith us in the same name(s).Name of the official :Signature :Participant’s Stamp & Date==========================================================AcknowledgementSerial No (pre-printed)We hereby acknowledge the receipt of following units requested for conversioninto dematerialised form by Mr/Ms/M/s _______________________________having DP IDand Client ID ______________Mutual Fund Name Unit Description QuantityDate:Participant’s Stamp & Signature❑ ❑ ❑[ 511 ]
NOTES[ 512 ]
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