The depositories act, 1996 regulates the depositories in securities in india brief history. Transfer of securities 11 the dp shall effect transfer to and from the demat accounts of the beneficial owner only on the basis of an. Securities and exchange board of india depositories act, 1996 chapter i priliminary 1. Without prejudice to the provisions of any other law for the time being in force,any loss caused to the beneficial owner due to the negligence of the depository or the participant, the depository shall indemnify such beneficial owner. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules and regulations of securities and exchange board of india sebi, circulars. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules and regulations of securities and exchange board of india.
If the rights and obligations of the parties hereto are altered by virtue of change in rules and regulations of sebi or byelaws, rules and regulations of the relevant depository, where the. Securities contracts regulation act, 1956, the depositories act, 1996, the companies act, 1956. A dp is an agent of the depository, who provides various services of the depository to investors. Securities and exchange board of india chapter i priliminary. Rights and obligations of beneficial owner and depository participant general clause 1. Depositories act, 1996 as amended by the securities laws. A guide to the depositories act, 1996 tech law blog. Power of board to give directions in certain cases. The act which initially came into force as an ordinance viz. Rights and obligations of depositories, participants, issuers and beneficial owners are given below. Depositories act, 1996 bare acts law library advocatekhoj. Rights and obligations of beneficial owner and depository participant as prescribed by sebi and depositories paragon center, c06, ground floor, p b marg, worli, mumbai4000.
In a strictly legal sense, a dp is an entity who is registered. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules and regulations of securities and. Essay on depositories securities financial management. Depositories act, 1996 mylegalwork online legal help. Rights and obligations of depositories, etc depositories act, 1996. Depositories act, 1996 pdf file chapter i preliminary 1. Annexure regular basic services demat account bsda.
Rights and obligations of beneficial owner and depository participant as prescribed by. Regulation 26 of the sebi depositories and participants regulations, 1996 states that depositories, participants, issuers, and issuers agent, in addition to the rights and obligations laid down in the depositories act and the bye laws shall have the rights and obligations arising from the agreements entered into by them. Central depository and depository participants are set up for this purpose. Rights and obligations the rights and obligations of depositories, depository participants, issuers and beneficial owners are spelt out clearly in the depositories act 1996. They are the intermediaries between the depository and the investors. The depositories act, 1996 the schedule see section 30 amendments to certain enactments part i amendment to the indian stamp act, 1899 2 of 1899 amendment after section 8, the following section shall be inserted, namely.
Act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and. Rights and obligations of beneficial owner and depository participant as prescribed by sebi and depositories. An act to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto. Depositories act, 1996, sebi depositories and participants regulations, 1996 and byelawsoperating instructionsbusiness rules of the depositories. If the rights and obligations parties hereto are altered by virtue change in rules and regulations of sebi or byelaws, rules egulations the relevant depository. A depository shall enter into an agreement with one or more participants as its agent in the prescribed form sec. Definitions chapter ii certificate of commencement of business 3. Certificate of commencement of business by depositories chapter iii rights and obligations of depositories, participants. Depositories act 1996 complete act citation 3399 bare.
In india, the entire depository system is governed by the securities exchange board of india sebi. Dp shall be bound by the provisions of the depositories act, 1996. If the rights and obligations of the parties hereto are altered by virtue of change in rules and regulations of sebi or. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act. Central depository and depository participants are set. Every depository shall maintain a register and an index of beneficial owners in the manner provided in section 150, section 151 and section 152 of the companies act, 1956 1 of 1956. The depositories ordinance, 1995, was designed to provide a legal framework for establishment of depositories to record ownership details in book entry form. Depositories act securities and exchange board of india. The dp shall effect transfer to and from the demat accounts of the beneficial owner only on the basis of an order. Rights and obligations of beneficial owner and depository participant as. The depositories act, 1996 provides for regulation of depositories in securities and for matters connected thereto. The relationship between the dps and the depository is governed by an agreement made between the two under the depositories act.
A depository has to enter into an agreement with one or more participants as its agent under the act any person can enter into an agreement with a depository to avail its services through a participant in the procedure specified by the bye laws of that particular depository. Amendments edit the act was amended by enforcement of security interest and recovery of debts laws and miscellaneous provisions amendment bill, 2016, passed by lok sabha on 2 august 2016. An act to provide for regulation of depositories in securities and for matters connected. Rights and obligations of depositories, participants, issuers. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules.
The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules and regulations of securities and exchange. Depositories act, 1996 22 of 1996 an act to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto. Certificate of commencement of business by depositories. Any changes in the rights and obligations which are specified by sebi depositories shall also be brought to the notice of the clients at once. The beneficial owner and the depository participant d p shall be bound by the provisions of the depositories act, 1996, sebi d epositories and participants regulations. The beneficial owner and the depository participant dp shall be bound by the provisions of the depositories act, 1996, sebi depositories and participants regulations, 1996, rules and. Any changes in the rights and obligations which are specified by sebidepositories shall also be brought to the notice of the clients at once. The beneficial owner and the depository participant d p shall be bound by the provisions of the depositories act, 1996, sebi d epositories. The beneficialowner and the depository participantdp shall be bound by the provisions of the depositories act, 1996, sebi depositories. Any person, through a participant, may enter into an agreement, in. Depositories act, 1996 as amended by the securities lawsamendment act, 2014 sections chapter i preliminary 1. The depositories act, 1996 was first introduced before the lok sabha on 11071996 as the depositories bill, 1996. Rights and obligations page 1 rights and obligations of beneficial owner and depository participant as prescribed by sebi and depositories general clause 1. Be it enacted by parliament in the fortyseventh year of the republic of india as follows.
Rights and obligations of depositories, etc1 subject to the provisions of this act, the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations. The depositories act, 1996 was enacted to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto. The bill was passed in the lok sabha on 16071996 and was passed by the rajya sabha on 23071996. Securities contracts regulation act, 1956, the depositories act, 1996, the companies act, 1956 or any rules or regulations made thereunder shall have the same meanings respectively assigned to them in those acts, rules or regulations made thereunder or any statutory modification or re. Depositories function for shorter settlement cycles and immediate transfer of title of securities. Jan 22, 2017 rights and obligations the rights and obligations of depositories, depository participants, issuers and beneficial owners are spelt out clearly in the depositories act 1996. Subject to the provisions of this act the rights and obligations of the depositories, participants and the issuers whose securities are dealt with by a depository shall be specified by the regulations. Rights and obligations of beneficial owner and depository participant as prescribed by sebi and depositories general clause 1. In exercise of the powers conferred by subsection 1a ofsection 12 of the securities and exchange board of india act, 1992 15 of 1992read with the regulations made thereunder and with the depositories ordinance, 1996 17 of 1996 the board hereby grants a certificate of registration to as a depository subject to the conditions specified in. In india, a depository participant dp is described as an agent of the depository. The rights and obligations of depositories, depository participants, issuers and beneficial owners are spelt out clearly in the depositors act 1996. Role of depositories in the indian economy ipleaders.
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