Investor Charter – For Depositories and Depository Participants
1. VISION
Towards making Indian Securities Market – Transparent, Efficient, & Investor friendly by providing safe, reliable, transparent and trusted record keeping platform for investors to hold and transfer securities in dematerialized form.
2. MISSION
- To hold securities of investors in dematerialized form and facilitate its transfer, while ensuring safekeeping of securities and protecting interest of investors.
- To provide timely and accurate information to investors with regard to their holding and transfer of securities held by them.
- To provide the highest standards of investor education, investor awareness and timely services so as to enhance Investor Protection and create awareness about Investor Rights.
3. Details of business transacted by the Depository and Depository Participant (DP)
A Depository is an organization which holds securities of investors in electronic form. Depositories provide services to various market participants – Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers and Investors in both primary as well as secondary markets. The depository carries out its activities through its agents which are known as Depository Participants (DP). Details available on the link [CDSL DP List].
4. Description of services provided by the Depository through Depository Participants (DPs) to investors
(1) Basic Services
| Sr. no. | Brief about the Activity / Service | Expected Timelines for processing by the DP after receipt of proper documents |
|---|---|---|
| 1. | Dematerialization of securities | 7 days |
| 2. | Rematerialization of securities | 7 days |
| 3. | Mutual Fund Conversion / Destatementization | 5 days |
| 4. | Re-conversion / Restatementisation of Mutual fund units | 7 days |
| 5. | Transmission of securities | 7 days |
| 6. | Registering pledge request | 15 days |
| 7. | Closure of demat account | 30 days |
| 8. | Settlement Instruction | For T+1 day settlements, Participants shall accept instructions from the Clients, in physical form up to 4 p.m. (in case of electronic instructions up to 6.00 p.m.) on T day for pay-in of securities. For T+0 day settlements, Participants shall accept EPI instructions from the clients, till 11:00 AM on T day. Note: ‘T’ refers ‘Trade Day’ |
(2) Depositories provide special services like pledge, hypothecation, internet-based services etc. in addition to their core services and these include
| Sr. no. | Type of Activity /Service | Brief about the Activity / Service |
|---|---|---|
| 1. | Value Added Services | Depositories also provide value added services such as
|
| 2. | Consolidated Account statement (CAS) | CAS is issued 10 days from the end of the month (if there were transactions in the previous month) or half yearly (if no transactions). |
| 3. | Digitalization of services provided by the depositories | Depositories offer below technology solutions and e-facilities to their demat account holders through DPs: |
5. Details of Grievance Redressal Mechanism
(1) The Process of investor grievance redressal
| 1. | Investor Complaint/ Grievances | Investor can lodge complaint/ grievance against the Depository/DP in the following ways:
The complaints/ grievances lodged directly with the Depository shall be resolved within 21 days. |
| 2. | Online Dispute Resolution (ODR) platform for online Conciliation and Arbitration | If the Investor is not satisfied with the resolution provided by DP or other Market Participants, then Page 6 of 12 the Investor has the option to file the complaint/ grievance on SMARTODR platform for its resolution through by online conciliation or arbitration (https://smartodr.in/register) |
| 3. | Steps to be followed in ODR for Review, Conciliation and Arbitration |
|
6. Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant
| Sr. No. | Type of special circumstances | Timelines for the Activity/ Service |
|---|---|---|
| 1. |
|
Client will have a right to transfer all its securities to any other Participant of its choice without any charges for the transfer within 30 days from the date of intimation by way of letter/email. |
7. Dos and Don’ts for Investors
| Sl No. | Guidance |
|---|---|
| 1 | Always deal with a SEBI registered Depository Participant for opening a demat account. |
| 2 | Read all the documents carefully before signing them. |
| 3 | Before granting Power of Attorney to operate your demat account to an intermediary like Stockbroker, Portfolio Management Services (PMS), etc., carefully examine the scope and implications of powers being granted. |
| 4 | Always make payments to registered intermediary using banking channels. No payment should be made in name of employee of intermediary. |
| 5 | Accept the Delivery Instruction Slip (DIS) book from your DP only (pre-printed with a serial number along with your Client ID) and keep it in safe custody. Do not sign or issue blank or partially filled DIS slips. Always mention details like ISIN, number of securities accurately. Contact your DP or broker for queries. It should be signed by all demat account holders. Strike out any blank space. Cancellations or corrections on the DIS should be initialed/signed by all account holders. Do not leave your instruction slip book with anyone. Do not sign blank DIS as it is equivalent to a bearer cheque. |
| 6 | Inform any change in your Personal Information (address, Bank Account details, email ID, Mobile number) linked to your demat account in prescribed format and obtain confirmation of updation in system. |
| 7 | Mention your Mobile Number and email ID in account opening form to receive SMS alerts and regular updates directly from depository. |
| 8 | Always ensure mobile number and email ID linked to your demat account match what was provided at the time of account opening/updation. |
| 9 | Do not share password of your online trading and demat account with anyone. |
| 10 | Do not share One Time Password (OTP) received from banks, brokers, etc. These are meant to be used by you only. |
| 11 | Do not share login credentials of e-facilities like e-DIS/demat gateway, SPEED-e/easiest, etc., with anyone. |
| 12 | Demat is mandatory for any transfer of securities of Listed public limited companies. |
| 13 | If you have any grievance in respect of your demat account, email depositories or lodge it with SEBI online at https://scores.sebi.gov.in |
| 14 | Keep a record of documents signed, DIS issued and account statements received. |
| 15 | Verify transaction statement carefully for all debits and credits. Inform the DP or respective Depository in case of any unauthorized activity. |
| 16 | Appoint a nominee to facilitate your heirs in obtaining the securities in your demat account, upon completion of necessary procedures. |
| 17 | Register for Depository’s internet-based facility or download mobile app to monitor your holdings. |
| 18 | Ensure you receive both holding and transaction statements periodically. You are entitled to a transaction statement every month if you have any transactions. |
| 19 | Do not follow herd mentality for investments. Seek expert and professional advice. |
| 20 | Beware of assured/fixed returns. |
8. Rights of investors
| Sl No. | Investor Rights |
|---|---|
| 1 | Receive a copy of KYC and account opening documents. |
| 2 | No minimum balance is required to be maintained in a demat account. |
| 3 | No charges are payable for opening of demat accounts. |
| 4 | If executed, receive a copy of Power of Attorney. Power of Attorney is not mandatory as per SEBI/Stock Exchanges. You have the right to revoke any authorization at any time. |
| 5 | You can open more than one demat account in the same name with a single DP or multiple DPs. |
| 6 | Receive statement of accounts periodically. In case of discrepancies, first approach the DP; if unresolved, escalate to the Depositories. |
| 7 | Pledge and/or create other interest or encumbrance on demat holdings. |
| 8 | Right to give standing instructions for crediting of securities in your demat account. |
| 9 | Right to freeze/defreeze the demat account or specific securities/specific quantity of securities maintained with the DP. |
| 10 | In case of grievances, right to approach Participant, Depository, or SEBI for resolution within prescribed timelines. |
| 11 | Right to vote on resolutions proposed by companies through Depositories’ internet-based e-Voting platform. |
| 12 | Receive information about charges and fees. Any change in tariff must be notified in writing at least 30 days in advance. |
| 13 | Right to indemnification for loss caused due to negligence of the Depository or Participant. |
| 14 | Right to opt out of the Depository system in respect of any security. |
9. Responsibilities of Investors
| Sl No. | Investor Responsibilities |
|---|---|
| 1 | Deal with a SEBI registered DP for opening demat account, KYC, and depository activities. |
| 2 | Provide complete documents for account opening and KYC. Fill all required details in the Account Opening/KYC Form in own handwriting and cancel out blanks. |
| 3 | Read all documents and conditions before signing the account opening form. |
| 4 | Accept the Delivery Instruction Slip (DIS) book only from DP (preprinted with serial number and client ID), keep it safe, and do not sign or issue blank or partially filled DIS. |
| 5 | Always mention ISIN and number of securities accurately. |
| 6 | Inform any change in information linked to the demat account and obtain confirmation of updation in the system. |
| 7 | Regularly verify balances and demat statement and reconcile them with trades/transactions. |
| 8 | Appoint nominee(s) to facilitate heirs in obtaining the securities in their demat account. |
| 9 | Do not fall prey to fraudsters sending emails and SMSs promising huge profits through stock/security trades. |
10. Code of Conduct for Depositories
(Part D of Third Schedule of Third Schedule of SEBI (D & P) regulations, 2018)
A Depository shall:
- Always abide by the provisions of the Act, Depositories Act, 1996, any Rules or Regulations framed thereunder, circulars, guidelines, and any other directions issued by SEBI.
- Adopt appropriate due diligence measures.
- Take effective measures to ensure implementation of proper risk management framework and good governance practices.
- Take appropriate measures towards investor protection and education of investors.
- Treat all its applicants/members in a fair and transparent manner.
- Promptly inform SEBI of violations of any applicable law, rule, or regulation by any issuer or issuer’s agent.
- Take a proactive and responsible attitude towards safeguarding the interests of investors, system integrity, and the securities market.
- Endeavor to introduce best business practices among itself and its members.
- Act in utmost good faith and avoid conflicts of interest in conducting its functions.
- Not indulge in unfair competition that may harm other Depositories, participants, or investors or create competitive disadvantages.
- Segregate roles and responsibilities of key management personnel within the depository:
- Clearly map legal and regulatory duties to relevant positions.
- Define delegation of powers to each position.
- Assign regulatory, risk management, and compliance tasks to appropriate teams.
- Be responsible for the acts or omissions of its employees in relation to the conduct of its business.
- Monitor participant compliance and ensure their conduct safeguards investor interests and the securities market.
11. Code of Conduct for Participants
(Part A of Third Schedule of SEBI (D & P) regulations, 2018)
- A participant shall make all efforts to protect the interests of investors.
- A participant shall always endeavour to:
- Render the best possible advice to clients, considering their needs, environment, and participant’s professional skills.
- Ensure prompt, effective, and efficient professional dealings.
- Adequately deal with inquiries from investors.
- Redress investor grievances without delay.
- A participant shall maintain high standards of integrity in all dealings with clients and intermediaries.
- A participant shall be prompt and diligent in opening beneficial owner accounts, handling demat/remat requests, executing debit instruction slips, and other related activities.
- A participant shall resolve complaints quickly and not later than one month from receipt.
- A participant shall not increase charges/fees without proper advance notice to beneficial owners.
- A participant shall not engage in unfair competition that harms other participants or investors.
- A participant shall not make exaggerated claims about qualifications, capabilities, or achievements.
- A participant shall not disclose client information without client authorization, unless required by law.
- A participant shall cooperate with SEBI as and when required.
- A participant shall maintain necessary knowledge and competence, abide by laws, and comply with SEBI Ombudsman awards.
- A participant shall not make untrue statements or suppress material facts in reports or documents submitted to SEBI.
- A participant shall not refuse to provide books, documents, or records requested by SEBI or other agencies.
- A participant shall promptly inform SEBI about legal actions or material breaches of law or regulations.
- A participant shall maintain a proper inward system for all types of mail received.
- A participant shall follow the maker-checker concept to prevent unauthorized transactions and ensure data accuracy.
- A participant shall maintain continuity in data and record keeping, including up-to-date electronic backups.
- A participant shall empower its compliance officer to perform duties effectively.
- A participant shall implement internal controls and have adequate financial/operational capacity to cover losses from fraud, misconduct, or omissions.
- A participant shall be responsible for the acts or omissions of its employees and agents.
- A participant shall ensure senior management has timely access to relevant business information.
- A participant shall ensure that good corporate policies and governance are in place.