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SECURITIES AND EXCHANGE BOARD OF INDIA (DEPOSITORIES AND PARTICIPANTS) REGULATIONS, 1996
(1) These regulations may be called the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996.
(2) They shall come into force on the date of their publication in the Official Gazette.
(1) In these regulations, unless the context otherwise requires, -
(a) "Act" means the Securities and Exchange Board of India, Act 1992 (15 of 1992);
3[(aa) "change in control" -
(i) in case of a body corporate -
(A) if its shares are listed on any recognised sk exchange, shall be construed with reference to the definition of control in terms of regulations framed under clause (h) of sub-section (2) of section 11 of the Act;
(B) in any other case, shall be construed as change in the controlling interest in the body corporate;
Explanation: For the purpose of para (B) of this sub-clause, the expression "controlling interest" means an interest, whether direct or
.(1) An application for the grant of a certificate of registration as a depository shall be made to the Board by the sponsor in Form A, shall be accompanied by the fee specified in Part A of the Second Schedule and be paid in the manner specified in Part B thereof.
(2) The application shall be accompanied by draft bye-laws of the depository that is proposed to be set up.
An application in Form A which is not complete in all respects and does not conform to the instructions specified therein shall be rejected:
Provided that before rejecting any such application, the sponsor shall be given in writing an opportunity to remove, within thirty days of the date of communication in this regard, the objections indicated by the Board.
Provided further that the Board may, on being satisfied that it is necessary to extend the period specified in the first proviso, extend such period by such further time as it thinks necessary in order to enable the applicant to remove the objections indicated by the Board.
.(1) The Board may require the sponsor to furnish such further information or clarification regarding matters relevant to the activity of the depository for the purpose of consideration of the application.
(2) The sponsor or his authorised representative shall, if so required, appear before the Board for personal representation, in connection with the grant of certificate of registration.
The Board shall not consider an application under regulation 3, unless the sponsor belongs to one of the following categories, namely:-
(i) a public financial institution as defined in section 4A of the Companies Act, 1956 (1 of 1956);
(ii) a bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
(iii) a foreign bank operating in India with the approval of the Reserve Bank of India;
(iv) a recognised sk exchange within the meaning of clause (j) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(v) a body corporate engaged in providing financial services where not less than seventy five percent of the equity capital is he
The provisions of the Securities and Exchange Board of India (Criteria for fit and proper person) Regulations, 2004 shall, as for as may be, apply to all applicants or the depositories and participants under these regulations]
3 Inserted by SEBI(Criteria for fit and proper person) Regulations, 2004 vide Notification No. GSR398(E) dt 10.03.2004
After considering the application under regulation 3, with reference to the qualifications specified in regulation 6, if the Board is satisfied that the company established by the sponsor is eligible to act as depository, it may grant a certificate of registration in Form B to the depository subject to the following, namely:-
(a) the depository shall pay the registration fee specified in part A of the Second Schedule in the manner specified in Part B thereof, within fifteen days of receipt of intimation from the Board;
(b) the depository shall comply with the provisions of the Act, the Depositories Ordinance, the bye-laws, agreements and these regulations;
(c) the depository shall not carry on any activity other than that of a depository unless the activity is incidental to the activity of
A depository who has been granted a certificate of registration under regulation 7, shall pay annual fee specified in Part A of the Second Schedule in the manner specified in Part B thereof.
(1) Where an application for the grant of certificate of registration under regulation 3 does not satisfy the requirements specified in regulation 7, the Board shall reject the application after giving the applicant an opportunity of being heard.
(2) The decision of the Board to reject the application shall be communicated to the applicant in writing within thirty days of such decision, stating therein the grounds on which the application has been rejected.
A depository which has been granted a certificate of registration under regulation 7, shall within one year from the date of issue of such certificate make an application to the Board for commencement of business in Form C.
Any application in Form C which is not complete in all respects and does not conform to instructions specified therein shall be rejected:
Provided that before rejecting any such application, the applicant shall be given in writing an opportunity to remove within thirty days of the date of communication in this regard, the objections indicated by the Board.
Provided further that the Board may, on being satisfied that it is necessary to extend the period specified in the first proviso, extend such period by such further time as it thinks necessary in order to enable the applicant to remove the objections indicated by the Board.
(1) The Board may require the depository to furnish such further information or clarification regarding matters relevant for the grant of certificate of commencement of business.
(2) The depository or its authorised representative, if so required, shall appear before the Board for personal representation in connection with the grant of certificate of commencement of business.
(1) The Board shall take into account for considering grant of certificate of commencement of business, all matters which are relevant to the efficient and orderly functioning of the depository and in particular, the following, namely, whether:-
(a) the depository has a net worth of not less than rupees one hundred crore;
(b) the bye-laws of the depository have been approved by the Board;
(c) the automatic data processing systems of the depository have been protected against unauthorised access, alteration, destruction, disclosure or dissemination of records and data;
(d) the network through which continuous electronic means of communications are established between the depository, participants, issuers and issuers' agents is secure against unau
After considering the application under regulation 13 with reference to the matters specified in sub-regulation (1) of regulation 13 and making physical verification under sub- regulation (2) of that regulation, if the Board is satisfied that the depository is eligible to commence business as a depository, shall grant a certificate of commencement of business in Form D.
(1) If the Board, after considering the matters specified in sub-regulation (1) of regulation 13 and making physical verification under sub- regulation (2) of that regulation, is of the opinion that the depository shall not be granted a certificate of commencement of business, it may either-
(a) direct the depository to conform to the matters specified in regulation 13; or
(b) reject the application after giving the applicant an opportunity of being heard.
(2) The decision of the Board to reject the application shall be communicated to the depository in writing within thirty days of such decision, stating therein the grounds on which the application has been rejected.
(1) An application for the grant of a certificate of 14[initial] registration as a participant shall be made to the Board in Form E, through each depository in which the applicant proposes to act as a participant, shall be accompanied by the fee specified in Part A of the Second Schedule and be paid in the manner specified in Part B thereof.
(2) The depository shall forward to the Board the application in Form E as early as possible, but not later than thirty days along with its recommendations and certifying that the participant complies with the eligibility criteria including adequate infrastructure as provided for in these regulations and the bye- laws of the depository.
14. Inserted by the Securities and Exchange Board of India (Depositories And Participants) (Amendment) Regulations, 2011 vide Notification No. LAD-NRO/GN/2011-12/14/21219 dated 05.07.2011.
An application in Form E, which is not complete in all respects and does not conform to the instructions specified therein, shall be rejected:
Provided that before rejecting any such application, the applicant shall be given in writing an opportunity to remove within thirty days of the date .
Provided further that the Board may, on being satisfied that it is necessary to extend the period specified in the first proviso, extend such period by such further time as it thinks necessary in order to enable the applicant to remove the objections indicated by the Board.
(1) The Board may require the applicant, or the depository to which the applicant is to be admitted as a participant, to furnish such further information or clarification as may be considered necessary for the grant of a certificate of 14[initial] registration to the applicant.
(2) The applicant or his authorised representative shall, if so required, appear before the Board for personal representation in connection with the grant of a certificate of 14[initial] registration.
14. Inserted by the Securities and Exchange Board of India (Depositories And Participants) (Amendment) Regulations, 2011 vide Notification No. LAD-NRO/GN/2011-12/14/21219 dated 05.07.2011.
For the purpose of grant of certificate of 14[initial] registration, the Board shall take into account all matters which are relevant to or relating to the efficient and orderly functioning of a participant and in particular, whether the applicant complies with the following requirements, namely:-
(a) the applicant belongs to one of the following categories,-
(i) a public financial institution as defined in section 4A of the Companies Act, 1956 (1 of 1956);
(ii) a bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
(iii) a foreign bank operating in India with the approval of the Reserve Bank of India;
(iv) a state financial corporation established
(1) After considering the application under regulation 16, with reference to the matters specified in regulation 19, if the Board is satisfied that the applicant is eligible for grant of certificate of 14[initial] registration, grant a certificate in Form F.
(2) The grant of certificate of 14[initial] registration in Form F shall be subject to the following, namely:-
(a) the participant shall pay the registration fee specified in Part A of the Second Schedule in the manner specified in Part B thereof, within fifteen days of the receipt of intimation from the Board;
(b) the participant shall comply with the provisions of the Act, Depositories Ordinance, the bye-laws, agreements and these regulations;
(c) the depository through which an application
(1) A participant who has been granted a certificate of initial registration may, three months before the expiry of the period of certificate of initial registration, make an application for grant of a certificate of permanent registration in Form E, through the depository in which it is a participant.
(2) The participant who has already been granted a certificate of registration or has obtained renewal of certificate of registration, prior to the commencement of the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2011, may, three months before the expiry of validity of certificate of registration or before, make an application for grant of a certificate of permanent registration in Form E, through the depository in which it is a participant.
(3) The application under sub-regulation (1) or
(1) Where an application for the grant of certificate of 19[initial registration under regulation 16 or of permanent registration under regulation 20A] does not satisfy the requirements specified in regulation 19, the Board shall reject the application after giving the applicant an opportunity of being heard.
(2) The decision of the Board to reject the application shall be communicated to the applicant in writing within thirty days of such decision, stating therein the grounds on which the application has been rejected.
14. Inserted by the Securities and Exchange Board of India (Depositories And Participants) (Amendment) Regulations, 2011 vide Notification No. LAD-NRO/GN/2011-12/14/21219 dated 05.07.2011.
19. Substituted by the Securities and Exchange Board of India (Depositories And Participants) (Amendment) Regulations, 2011 vide No
Any participant whose application for a certificate of 21[permanent registration] has been rejected by the Board under regulation 22[20A], shall from the date of expiry of the certificate of registration sought to be renewed, cease to carry on any activity as a participant:
Provided that the Board may, in the interest of the investors in the securities market permit the participant to carry on activities undertaken prior to the receipt of the intimation of refusal subject to such condition as the Board may specify.
20. Substituted by the Securities and Exchange Board of India (Depositories And Participants) (Amendment) Regulations, 2011 vide Notification No. LAD-NRO/GN/2011-12/14/21219 dated 05.07.2011 for the following : - "renew a certificate of"
21. Substituted by the Securities and Exchang
The depositories, participants, issuers, and issuers' agents, in addition to the rights and obligations laid down in the Depositories Ordinance and the bye-laws shall have the rights and obligations arising from the agreements entered into by them.
Every depository shall, in its bye-laws, state the specific securities which are eligible for being held in dematerialised form in the depository.
The following securities shall be eligible for being held in dematerialised form in a depository:-
(a) shares, scrips, sks, bonds, debentures, debenture sk 16[,Indian Depository Receipts] or other marketable securities of a like nature in or of any incorporated company or other body corporate;
(b) units of mutual funds, rights under collective investment schemes and venture capital funds, commercial paper, certificates of deposit, securitised debt, money market instruments and government securities1 unlisted securities shall also be similarly eligible for being held in dematerialised form in a depository.
14(c ) any other security as may be specified by the Board from time to time, by way of notification in the official Gazette and subject to such condition as it may deem fit to impose.]
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(1) Either on the issuer or on the investors exercising an option to hold his securities with a depository in dematerialised form, the issuer shall enter into an agreement with a depository to enable the investor to dematerialise the securities.2.
(2) Where the issuer has appointed a Registrar to the Issue or Share Transfer Agent, who has been granted certificate of registration by the Board under sub-section (1) of section 12 of the Act, the depository shall enter into a tripartite agreement with the issuer and the Registrar to the Issue or Share Transfer Agent, as the case may be, in respect of the securities to be declared by the depository as eligible to be held in dematerialised form.
Provided further that no such agreement shall be required to be entered into where the State or the Central Government is the issuer of Government
Every depository shall have systems and procedures which will enable it to co-ordinate with the issuer or its agent, and the participants, to reconcile the records of ownership of securities with the issuer or its agent, as the case may be, and with participants, on a daily basis.
Every depository shall maintain continuous electronic means of communication with all its participants, issuers or issuers' agents, as the case may be, clearing houses and clearing corporations of the sk exchanges and with other depositories.
The depository shall satisfy the Board that it has a mechanism in place to ensure that the interests of the persons buying and selling securities held in the depository are adequately protected.]
15. Substituted by the Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2008 vide Notification No. LAD-NRO/GN/2008/18/134585 dated 08.08.2008 for the following :-
"Transfer to be affected only after payment
32. The depository shall satisfy the Board that it has a mechanism in place to ensure that the interest of the persons buying and selling securities held in the depository are adequately protected and shall register the transfer of a security in the name of the transferee only after the depository is satisfied that payment for such transfer has been made."
Every depository shall allow any participant to withdraw or transfer its account, if the request for such withdrawal or transfer is in accordance with conditions stipulated therefore in the bye-laws of the depository.
Every depository shall have adequate mechanisms for the purposes of reviewing, monitoring and evaluating the depository's controls, systems, procedures and safeguards.
Every depository shall cause an inspection of its controls, systems, procedures and safeguards to be carried out annually and forward a copy of the report to the Board.
Every depository shall take adequate measures including insurance to protect the interests of the beneficial owners against risks likely to be incurred on account of its activities as a depository.
Where records are kept electronically by the depository, it shall ensure that the integrity of the automatic data processing systems is maintained at all times and take all precautions necessary to ensure that the records are not lost, destroyed or tampered with and in the event of loss or destruction, ensure that sufficient back up of records is available at all times at a different place.
(1) Every depository shall maintain the following records and documents, namely:-
(a) records of securities dematerialised and rematerialised;
(b) the names of the transferor, transferee, and the dates of transfer of securities;
(c) a register and an index of beneficial owners;
(cc) details of the holdings of the securities of the beneficial owners as at the end of each day4.
(d) records of instructions received from and sent to participants, issuers, issuers' agents and beneficial owners;
(e) records of approval, notice, entry and cancellation of pledge or hypothecation, as the case may be;
(f) details of parti
Every depository shall extend all such co-operation to the beneficial owners, issuers, issuers' agents, custodians of securities, other depositories and clearing organizations as is necessary for the effective, prompt and accurate clearance and settlement of securities transactions and conduct of business.
No depository shall assign or delegate to any other person its functions as a depository, without the prior approval of the Board.
Every participant shall enter into an agreement with a beneficial owner before acting as a participant on his behalf, in a manner specified by the depository in its bye-laws.
(1) Separate accounts shall be opened by every participant in the name of each of the beneficial owners and the securities of each beneficial owner shall be segregated, and shall not be mixed up with the securities of other beneficial owners or with the participant's own securities.
(2) A participant shall register the transfer of securities to or from a beneficial owner's account only on receipt of instructions from the beneficial owner and thereafter confirm the same to the beneficial owner in a manner as specified by the depository in its bye-laws.
(3) Every entry in the beneficial owner's account shall be supported by electronic instructions or any other mode of instruction received from the beneficial owner in accordance with the agreement with the beneficial owner.
Every participant shall provide statements of account to the beneficial owner in such form and in such manner and at such time as provided in the agreement with the beneficial owner.
Every participant shall allow a beneficial owner to withdraw or transfer from his account in such manner as specified in the agreement with the beneficial owner.
Every participant shall maintain continuous electronic means of communication with each depository in which it is a participant.
Every participant shall have adequate mechanism for the purposes of reviewing, monitoring and evaluating the participant's internal accounting controls and systems.
Reconciliation
Every participant shall reconcile his records with every depository in which it is a participant, on a daily basis.
Every participant shall submit periodic returns to the Board and to every depository in which it is a participant in the format specified by the Board or the bye-laws of the depository, as the case may be.
(1) Every participant shall maintain the following records and documents, namely:-
(a) records of all the transactions entered into with a depository and with a beneficial owner;
(b) details of securities dematerialised, rematerialised on behalf of beneficial owners with whom it has entered into an agreement;
(c) records of instructions received from beneficial owners and statements of account provided to beneficial owners; and
(d) records of approval, notice, entry and cancellation of pledge or hypothecation, as the case may be.
(2) Every participant shall make available for the inspection of the depository in which it is a participant all records referred to in sub-regulation (1).
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Where records are kept electronically by the participant, it shall ensure that the integrity of the data processing systems is maintained at all times and take all precautions necessary to ensure that the records are not lost, destroyed or tampered with and in the event of loss or destruction, ensure that sufficient back up of records is available at all times at a different place.
If a participant enters into an agreement with more than one depository, it shall maintain the records specified in regulation 49 separately in respect of each depository.
No participant shall assign or delegate its functions as participant to any other person, without the prior approval of the depository.
Every issuer whose securities have been declared as eligible to be held in dematerialised form in a depository shall enter into an agreement with the depository in accordance with the provisions of regulation 29.
Provided that no agreement shall be required to be entered into in case :-
the depository is the issuer of securities; or the State or the Central Government is the issuer of Government securities5.
5. Inserted by SEBI (Depositories and Participants) Amendment Regulations, 1998 published in the Gazette of India dated January 21, 1998.
All matters relating to transfer of securities, maintenance of records of holders of securities, handling of physical securities and establishing connectivity with the depositories shall be handled and maintained at a single point i.e. either in-house by the issuer or by a Share Transfer Agent registered with the Board.
9. Inserted by SEBI (Investment Advice by Intermediaries (Amdt.) Regulation 2001 w.e.f. 29.05.2001
Every issuer or its agent or any person who is registered as an intermediary under this Act, shall redress the grievances of beneficial owners within thirty days of the date of receipt of the complaint and keep the depository informed about the number and nature of grievances redressed by it and the number of grievances pending before it.]
(1) Any beneficial owner, who has entered into an agreement with a participant, shall inform the participant of the details of the certificate of security which is 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 through his custodian of securities.
(2) The participant shall, on receipt of information under sub- regulation (1), forward such details of the certificate of security to the depository and shall confirm to the depository that an agreement has been entered into between the participant and the beneficial owner.
(3) The participant shall maintain records indicating the names of beneficial owners of the sec
The issuer or its agent shall reconcile the records of dematerialised securities with all the securities issued by the issuer, on a daily basis.
Provided that where the State or the Central Government is the issuer of Government securities, the depository shall, on a daily basis, reconcile the records of the dematerialised securities5.
5. Inserted by SEBI (Depositories and Participants) Amendment Regulations, 1998 published in the Gazette of India dated January 21, 1998.
(1) Every issuer shall submit audit report on a quarterly basis, starting from September 30, 2003, to the concerned stock exchanges audited by a qualified Chartered Accountant or a practicing Company Secretary, for the purposes of reconciliation of the total issued capital, listed capital and capital held by depositories in dematerialized form, the details of changes in share capital during the quarter and the in-principle approval obtained by the issuer from all the stock exchanges where it is listed in respect of such further issued capital.
(2) The audit report under sub-regulation (1) shall also give the updated status of the register of members of the issuer and confirm that securities have been dematerialized as per requests within 21 days from the date of receipt of requests by the issuer and where the dematerialization has not been effected within the said stipulated period
Every issuer or its agent shall establish continuous electronic means of communication with the depository with which it has entered into an agreement.
Every issuer whose securities have been declared as eligible for dematerialisation in a depository shall give information to the depository about book closures, record dates, dates for the payment of interest or dividend, dates for annual general meetings and other meetings, dates for redemption of debentures, dates for conversion of debentures and warrants, call money dates and such other information at the time and in the manner as may be specified by the depository in its bye-laws or agreement.
Provided that no such information would be required to be given to the depository where the State or the Central Government is the issuer of Government securities6.
6. Inserted by SEBI (Depositories and Participants) Amendment Regulations, 1998 published in the Gazette of India dated January 21, 1998.
(1) If a beneficial owner intends to create a pledge on a security owned by him, he shall make an application to the depository through the participant who has his account in respect of such securities.
(2) The participant after satisfaction that the securities are available for pledge shall make a note in its records of the notice of pledge and forward the application to the depository.
(3) The depository after confirmation from the pledgee that the securities are available for pledge with the pledgor shall within fifteen days of the receipt of the application create and record the pledge and send an intimation of the same to the participants of the pledgor and the pledgees.
(4) On receipt of the intimation under sub-regulation(3) the participants of both the pledgor and the pledgee shall
8[(58A) (1) A depository or a participant or any of their employees shall not render, directly or indirectly, any investment advice about any security in the publicly accessible media, whether real - time or non real-time, unless a disclosure of his interest including long or short position in the said security has been made, while rendering such advice.
(2) In case, an employee of the depository or the participant is rendering such advice, he shall also disclose the interest of his dependent family members and the employer including their long or short position in the said security, while rendering such advice."
Appointment of Compliance Officer -
8. Earlier Regulation 58(1) to (12) has been replaced vide SEBI (Depositories and Participants) Amendment Regulations, 1997 dated September 5, 199
A depository and a participant shall appoint a compliance officer who shall be responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc issued by the Board or the Central Government and for redressal of investors' grievances.
(2) The compliance officer shall immediately and independently report to the Board any non-compliance observed by him.]
The Board may appoint one or more persons as inspecting officer to undertake inspection of the books of accounts, records, documents and infrastructure, systems and procedures, or to investigate the affairs of a depository, a participant, a beneficial owner, an issuer or its agent for any of the following purposes, namely:-
(a) to ensure that the books of account are being maintained by the depository, participant, issuer or its agent in the manner specified in these regulations;
(b) to look into the complaints received from the depositories, participants, issuers, issuers' agents, beneficial owners or any other person;
(c) to ascertain whether the provisions of the Act, the Depositories Ordinance, the bye-laws, agreements and these regulations are being complied with by the depository, par
(1) Before ordering an inspection or investigation under regulation 59, the Board shall give not less than 10 days notice to the depository, participant, beneficial owner, issuer or its agent, as the case may be.
(2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors no such notice should be given, it may, by an order in writing direct that such inspection be taken up without such notice.
(3) During the course of an inspection or investigation, the depository, a participant, a beneficial owner, an issuer or its agent against whom the inspection or investigation is being carried out shall be bound to discharge his obligation as provided in regulation 61.
(1) It shall be the duty of the depository, a participant, a beneficial owner, an issuer or its agent whose affairs are being inspected or investigated, and of every director, officer and employee thereof, to produce to the inspecting officer such books, securities, accounts, records and other documents in its custody or control and furnish him with such statements and information relating to his activities as a depository, a participant, a beneficial owner, an issuer or its agent, as the inspecting officer may require, within such reasonable period as the inspecting officer may specify.
(2) The depository, a participant, a beneficial owner, an issuer or its agent shall allow the inspecting officer to have reasonable access to the premises occupied by him or by any other person on his behalf and also extend reasonable facility for examining any books, records, documents and com
The inspecting officer shall, as soon as possible, on completion of the inspection or investigation as the case may be, submit a report to the Board:
Provided that if directed to do so by the Board, he may submit interim reports.
The Board or the Chairman shall after consideration of inspection or investigation report take such action as the Board or Chairman may deem fit and appropriate including action under the Securities and Exchange Board of India ( Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty )-Regulations,2002.]
19.Substituted by SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 w.e.f. 27.09.2002. Prior to substitution it read as under :
Communication of findings etc.
63. (1) The Board shall, after consideration of the inspection report or the investigation report referred to in regulation 62, communicate the findings of the inspecting officer to the depository, participant, issuer or its agent, as the case may be, and give him an opportunity
Nothing contained in this chapter shall be applicable to the State or the Central Government where it is the issuer of the Government securities17.
17. Inserted by SEBI (Depositories and Participants) Amendment Regulations, 1998 published in the Gazettee of India dated January 21, 1998.
The Board shall have the power to appoint an auditor to inspect or investigate, into the books of accounts, records, documents, infrastructures, systems and procedures or affairs of a depository, a participant, a beneficial owner, an issuer or its agent.
Provided that the auditor so appointed shall have the same powers of the inspecting or investigating officer as stated in regulations 59 and 60, and the obligation of the depository, participant, beneficial owner, issuer or its agent and their respective directors, officers and employees, as the case may be, as stated in Regulation 61, shall be applicable to the inspection or investigation under this Regulation.
The Board shall be entitled to recover from the depository, a participant, a beneficial owner, an issuer or its agent as the case may be, such expenses including fees paid to the auditors as may be incurred by it for the purposes of inspecting or investigating the books of accounts, records, documents, infrastructures, systems and procedures of the depository, a participant, a beneficial owner, a issuer or its agent, as the case may be18.
18.Inserted by SEBI (Depositories and Participants) Amendment Regulations, 1999 published in the Gazettee of India dated July 7, 1999.
A depository or a participant who -
(a) contravenes any of the provisions of the Act, the Depositories Act, the bye-laws, agreements and these regulations;
(b) fails to furnish any information relating to its activity as a depository or participant as required under these regulations;
(c) does not furnish the information called for by the Board under clause (a) of subsection (1) of section 18 of the Depositories Act or furnishes information which is false or misleading in any material particular;
(d) does not co-operate in any inspection or investigation or enquiry conducted by the Board;
e) fails to comply with any direction of the Board issued under section 18 of the Depositories Act;
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The Board may cancel the certificate of registration granted to a depository or participant if such depository or participant
a) is guilty of fraud, or has been convicted of an offence involving moral turpitude; or
b) has been guilty of repeated defaults of the nature specified in regulation 64.
Explanation :
In this regulation, "fraud" has the same meaning as is assigned to it in section 17 of the Indian Contract Act, 1872 (9 of 1872).
.(1) No order of suspension or cancellation of certificate of registration shall be issued by the Board against a depository or a participant, except after holding an enquiry by an officer of the Board, authorised in this regard in accordance with the procedure specified in sub- regulations (2) to (8).
(2) For the purpose of holding an enquiry the Board may appoint one or more enquiry officer.
(3) The enquiry officer shall issue to the depository or the participant, as the case may be, a notice at its registered office or the principal place of its business, setting out the grounds on which action is proposed to be taken against him and calling upon him to show cause against such action within a period of fourteen days from the date of receipt of the notice.
(4) The depository or t
(1) On receipt of the report from the enquiry officer, the Board shall consider the same and issue to the depository or participant, as the case may be, a show-cause notice as to why the penal action as proposed by the enquiry office should not be taken against it.
(2) The depository or participant, as the case may be, shall, within fourteen days of the date of the receipt of show-cause notice, send a reply to the Board.
(3) The Board, after considering the reply of the depository or participant, as the case may be, if received within a period of fourteen days shall as soon as possible but not later than thirty days from the date of receipt of the reply or the date of hearing, if any, which ever is later, pass such order as it deems fit including an order for the suspension or cancellation of the certificate.
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(1) On and from the date of the suspension of the certificate, the depository or participant, as the case may be, shall cease to carry on any activity as a depository or as a participant, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents or securities that may be in its custody or control, relating to its activities as depository or participant.
(2) On and from the date of cancellation of the certificate, the depository or participant shall, with immediate effect, cease to carry on any activity as a depository or participant, and shall be subject to the directions of the Board with regard to the transfer of any records, documents or securities that may be in its custody or control, relating to its activities as depository or participant.
The order of suspension or cancellation of certificate of registration issued under sub-regulation (3) of regulation 67 shall be published by the Board in at least two daily newspapers.
FIRST SCHEDULE - FORMS
FORM A
(see regulation 3)
SECURITIES AND EXCHANGE BOARD OF INDIA
(DEPOSITORIES AND PARTICIPANTS) REGULATIONS, 1996.
APPLICATION FOR GRANT OF
CERTIFICATE OF REGISTRATION AS DEPOSITORY
SECURITIES AND EXCHANGE BOARD OF INDIA
MITTAL COURT, `B' WING, 1st FLOOR
NARIMAN POINT, MUMBAI 400 021, INDIA
INSTRUCTIONS
i. This form is meant for use by each person acting as the sponsor of a depository.
1[see regulations 3, 7, 8, 16, 20, 20A)]
SECURITIES AND EXCHANGE BOARD OF INDIA (DEPOSITORIES AND PARTICIPANTS) REGULATIONS, 1996
PART A
APPLICATION FEES, REGISTRATION FEES AND ANNUAL FEES :
Application fees payable by sponsor (Rs) 50,000
Application fees payable by participant (Rs) 5,000
Registration fees payable by depository (Rs) 25,00,000
Registration fees payable by participant (Rs) 1,00,000
Annual fees payable by depository (Rs) 10,00,000
Annual fees payable by participant (Rs) 1,000
&nbs
Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996
[Regulation 2[20AA]]
CODE OF CONDUCT FOR PARTICIPANTS
1. A Participant shall make all efforts to protect the interests of investors.
2. A Participant shall always endeavor to-
a. render the best possible advice to the clients having regard to the clients needs and the environments and his own professional skills;
b. ensure that all professional dealings are affected in a prompt, effective and efficient manner;
c. inquiries from investors arc adequately dealt with;
d. grievances of inve
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