Investor Charter for Depositories and Depository Participants

1. Vision

Towards making the Indian Securities Market transparent, efficient, and investor-friendly by providing a 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 their transfer, while ensuring safekeeping of securities and protecting the interest of investors.

To provide timely and accurate information to investors regarding their holdings and transfer of securities held by them.

To provide the highest standards of investor education, investor awareness, and timely services 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 that 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 and secondary markets. The depository carries out its activities through its agents, known as Depository Participants (DPs).

4. Description of Services Provided by the Depository through Depository Participants (DP) to Investors

(1) Basic Services

Note: 'T' refers to 'Trade Day'.

(2) Value-Added Services

Basic Services Demat Account (BSDA): Offers limited services with reduced charges for eligible individuals.

Transposition cum Dematerialization: Allows dematerialization of securities when the order of names differs between certificates and demat accounts.

Linkages with Clearing System: Facilitates seamless settlement of trades.

Distribution of Corporate Benefits: Ensures timely credit of bonuses, rights, IPOs, etc.

Demat of Other Instruments: Includes National Savings Certificates (NSC), Kisan Vikas Patra (KVP), etc.

(3) Consolidated Account Statement (CAS)

Issued within 10 days from the end of the month if there were transactions in the previous month, or on a half-yearly basis if there were no transactions.

(4) Digital Services

E-account opening: Facilitates online account opening.

Online Instructions for Execution: Allows electronic submission of instructions.

e-DIS / Demat Gateway: Provides electronic delivery instruction slips.

e-CAS Facility: Offers electronic consolidated account statements.

Miscellaneous Services: Includes various other digital services to enhance investor convenience.

5. Special Circumstances: Termination of DP

In cases where a DP's participation is terminated, investors have the right to transfer their securities to another DP of their choice without any charges within 30 days from the date of intimation.

Point 1: Value-Added Services

a. Basic Services Demat Account (BSDA):

The BSDA facility offers limited services to eligible individuals, aiming to promote wider financial inclusion and encourage the holding of demat accounts. As per SEBI guidelines:

No Annual Maintenance Charges (AMC) are levied if the value of securities holdings is up to ₹50,000.

For holdings between ₹50,001 and ₹2,00,000, AMC not exceeding ₹100 is chargeable.

In the case of debt securities, there are no AMC charges for holdings up to ₹1,00,000, and a maximum of ₹100 as AMC is chargeable for holdings between ₹1,00,001 and ₹2,00,000.

b. Transposition cum Dematerialization:

This facility allows clients to dematerialize securities in the same account if the names on the physical certificates match the names in the demat account but are in a different order. To avail this, clients must submit the security certificates along with the Transposition Form and Demat Request Form.

c. Linkages with Clearing System:

Depositories have established linkages with the clearing system to facilitate the actual delivery of securities from selling brokers to the clearing system and from the clearing system to buying brokers.

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Point 2: Digitization of Services Provided by Depositories

a. E-Account Opening:

Investors can open demat accounts through digital modes, commonly referred to as "online account opening." By visiting the Depository Participant's (DP) website, investors can fill in the required information, submit necessary documents, undergo video In-Person Verification (IPV), and have their demat account opened without visiting the DP's office.

b. Online Instructions for Execution:

Internet-enabled services like SPEED-e (offered by NSDL) and Easiest (offered by CDSL) empower demat account holders to manage their securities efficiently and conveniently from anywhere, at any time. These platforms allow Beneficial Owners (BOs) to submit transfer and pledge instructions, including margin pledges, online without the need for physical paperwork. These services are also accessible via mobile applications on Android, Windows, and iOS platforms.

c. e-DIS / Demat Gateway:

Investors can authorize the transfer of securities through the Electronic Delivery Instruction Slip (e-DIS) facility, eliminating the need for physical DIS. For on-market transfers, investors must provide the settlement number, International Securities Identification Number (ISIN), and the quantity of securities to be transferred. Each e-DIS is valid for a single settlement number or date and requires authorization via a One-Time Password (OTP) and a PIN/password generated by the depository. Depositories have implemented necessary risk containment measures for this process.

d. e-CAS Facility:

The electronic Consolidated Account Statement (e-CAS) facility enables investors to access their consolidated account statements online, which detail their holdings in dematerialized form. These statements can also be accessed through mobile applications, providing investors with a convenient way to monitor their investments.

e. Miscellaneous Services:

Depositories have developed additional services to enhance investor experience, including:

Transaction alerts via SMS.

E-locker facilities for secure document storage.

Chatbots designed to provide instant responses to investor queries.

6. Details of Grievance Redressal Mechanism

(1) Investor Grievance Redressal Process:

1. Lodging a Complaint:

Investors can lodge complaints or grievances against the Depository or Depository Participant (DP) through the following modes:

a. Electronic Mode:


SCORES (SEBI Complaints Redress System): A web-based centralized grievance redressal system provided by SEBI. Investors can register complaints pertaining to securities market against SEBI-regulated entities. The process includes a two-level review:

First review by the Designated Body.

Second review by SEBI.

Respective Depository’s Web Portal: Investors can file complaints through the dedicated grievance portal of their respective depository.

Email: Complaints can be sent to the designated email IDs of the depository.




b. Offline Mode:
Complaints or grievances can be lodged directly with the Depository or DP through written communication. Such complaints should be resolved within 21 days.

(2) Online Dispute Resolution (ODR):

If the investor is not satisfied with the resolution provided by the DP or other market participants, they have the option to file the complaint or grievance on the SMARTODR platform for resolution through online conciliation or arbitration.

(3) Steps in the ODR Process:

Investor approaches the market participant for redressal of the complaint.

If unsatisfied with the response, the investor can escalate the complaint on the SEBI SCORES portal.

Alternatively, the investor may file a complaint on the SMARTODR portal for resolution through online conciliation and arbitration.

Upon receipt of the complaint on the SMARTODR portal, the relevant Market Infrastructure Institution (MII) will review the matter and endeavor to resolve it within 21 days.

If the matter is not amicably resolved, the investor may request the MII to refer the case for conciliation.

During conciliation, the conciliator will attempt to settle the dispute within 21 days, extendable by 10 days.

If conciliation is unsuccessful, the investor may request arbitration.

The arbitration process should be concluded within 30 days, extendable by another 30 days.

7. Guidance on Special Circumstances Related to Market Activities: Termination of the Depository Participant

Scenario 1: Termination by Depository

Circumstances: If a Depository Participant (DP) no longer meets the eligibility criteria or is suspended by stock exchanges, the depository may terminate its participation.

Investor Rights: Clients are entitled to transfer all their securities to another DP of their choice without incurring any charges. This transfer should be completed within 30 days from the date of intimation via letter or email.

Scenario 2: Voluntary Surrender by Participant

Circumstances: A DP may voluntarily surrender its participation.

Investor Rights: Clients retain the right to transfer their securities to another DP without any charges, to be completed within 30 days from the date of intimation.

8. Dos and Don’ts for Investors

Dos:

1. Engage with SEBI-Registered DPs: Always open a demat account with a SEBI-registered Depository Participant.

2. Thoroughly Review Documents: Carefully read all documents before signing.

3. Assess Power of Attorney (PoA) Carefully: Before granting PoA to intermediaries like stockbrokers or Portfolio Management Services, understand the scope and implications.

4. Use Banking Channels for Payments: Make payments to registered intermediaries through banking channels; avoid payments in the name of individual employees.

5. Secure Your DIS Book: Accept the Delivery Instruction Slip (DIS) book only from your DP, ensure it is pre-printed with a serial number and your Client ID. Keep it secure and do not sign blank or partially filled slips.

6. Accurate Transaction Details: Always mention correct ISINs and the number of securities. For queries, contact your DP or broker. Ensure all account holders sign the DIS.

7. Update Personal Information Promptly: Inform your DP of any changes in personal information like address, bank details, email ID, or mobile number, and obtain confirmation of the update.

8. Register Contact Details: Provide your mobile number and email ID in the account opening form to receive SMS alerts and regular updates directly from the depository.

9. Maintain Confidentiality: Do not share passwords or One-Time Passwords (OTPs) related to your online trading and demat accounts with anyone.

10. Use E-Facilities Securely: Do not share login credentials of e-facilities provided by depositories, such as e-DIS, demat gateway, SPEED-e, or easiest, with others.

11. Mandatory Dematerialization: Demat is mandatory for the transfer of securities of listed public limited companies.

12. Grievance Redressal: If you have any grievances regarding your demat account, write to the designated email IDs of depositories or lodge a complaint with SEBI online at https://scores.sebi.gov.in.

13. Maintain Records: Keep records of all documents signed, DIS issued, and account statements received.

14. Verify Transaction Statements: Regularly verify your transaction statements for all debits and credits. Report any unauthorized transactions to your DP or respective depository.

15. Nominate Beneficiaries: Appoint a nominee to facilitate the transfer of securities to your heirs upon completion of necessary procedures.

16. Monitor Holdings: Register for the depository's internet-based facility or download its mobile app to monitor your holdings.

17. Ensure Receipt of Statements: Ensure you receive both holding and transaction statements periodically as instructed to your DP. You're entitled to a transaction statement every month if there are any transactions.

18. Seek Professional Advice: Avoid following herd mentality for investments. Seek expert and professional advice tailored to your investment goals.

19. Be Cautious of Assured Returns: Be wary of schemes promising assured or fixed returns.

Don’ts:

1. Avoid Unregistered Intermediaries: Do not deal with unregistered intermediaries.

2. Do Not Share Sensitive Information: Never share your account details, passwords, or OTPs with anyone.

3. Avoid Cash Transactions: Do not make payments in cash to intermediaries; always use official banking channels.

4. Do Not Sign Blank Forms: Never sign blank or partially filled forms or DIS slips.

5. Be Sceptical of Unsolicited Offers: Do not fall prey to unsolicited offers promising high returns.

9. Rights of Investors

1. Access to Documentation: Receive a copy of your Know Your Customer (KYC) and account opening documents.

2. No Minimum Balance Requirement: There's no requirement to maintain a minimum balance in your demat account.

3. Free Account Opening: No charges are payable for opening a demat account.

4. Power of Attorney (PoA): If executed, receive a copy of the PoA. Note that PoA is not mandatory as per SEBI/Stock Exchanges, and you have the right to revoke any authorization at any time.

5. Multiple Accounts: You can open more than one demat account in the same name with a single or multiple DPs.

6. Periodic Statements: Receive statements of accounts periodically. In case of discrepancies, promptly take up the matter with your DP. If unresolved, escalate to the depositories.

7. Pledge and Encumbrance: You have the right to create pledges or any other interest or encumbrance on your demat holdings.

8. Standing Instructions: You can give standing instructions regarding the crediting of securities to your demat account.

9. Account Freezing: You have the right to freeze or defreeze your demat account or specific securities/quantities within the account.

10. Grievance Redressal: In case of grievances, you have the right to approach the Participant, Depository, or SEBI for resolution within prescribed timelines.

11. E-Voting: Eligible investor shareholders have the right to cast votes on various company resolutions through the depositories' internet-based e-Voting platform.

12. Information on Charges: Receive information about charges and fees. Any agreed-upon charges/tariffs shall not increase unless a written notice of at least 30 days is provided.

13. Indemnification: You have the right to be indemnified for any loss caused due to the negligence of the Depository or the Participant.

14. Opt-Out Option: You have the right to opt out of the Depository system concerning any security.

10. Responsibilities of Investors

1. Engage with SEBI-Registered DPs: Open demat accounts and conduct KYC and depository activities only with SEBI-registered DPs.

2. Provide Complete Documentation: Submit complete documents for account opening and KYC. Fill all required details in the Account Opening/KYC form in your handwriting and strike out any blanks.

3. Understand Agreements: Read all documents and conditions thoroughly before signing the account opening form.

4. Secure DIS Book: Accept the DIS book only from your DP (pre-printed with a serial number and your Client ID) and keep it in safe custody. Do not sign or issue blank or partially filled DIS slips.

5. Accurate Transaction Details: Always mention accurate details like ISIN and the number of securities.

6. Update Personal Information: Inform your DP of any changes in personal information linked to your demat account and obtain confirmation of the update.

7. Regular Account Reconciliation: Regularly verify balances and reconcile your demat statement with trades/transactions.

8. Nominate Beneficiaries: Appoint nominees to facilitate the transfer of securities to your heirs.

9. Beware of Fraudulent Communications: Do not fall prey to fraudsters sending emails and SMSs luring you to trade in stocks/securities promising huge profits.

11. Code of Conduct for Depositories

(Part D of Third Schedule of SEBI (D & P) Regulations, 2018)

a) Consistently comply with the provisions of the Securities and Exchange Board of India Act, 1992, the Depositories Act, 1996, and any rules, regulations, circulars, guidelines, or directions issued by the Board from time to time.

b) Implement appropriate due diligence measures to ensure the integrity and reliability of its operations.

c) Establish and maintain an effective risk management framework and adhere to sound governance practices.

d) Undertake initiatives aimed at investor protection and education to enhance investor awareness and confidence.

e) Ensure fair and transparent treatment of all applicants and members.

f) Promptly report to the Board any violations of applicable laws, rules, regulations, or directives by any issuer or its agent.

g) Adopt a proactive and responsible approach to safeguard investor interests, maintain the integrity of its systems, and uphold the stability of the securities market.

h) Strive to introduce and promote best business practices within the depository and among its members.

i) Act with utmost good faith, avoiding conflicts of interest in the execution of its functions.

j) Refrain from engaging in unfair competition that could harm other depositories, their participants, or investors, or place them at a disadvantage in any assignment.

k) Clearly define and segregate the roles and responsibilities of key management personnel, including:

• Mapping legal and regulatory duties to specific positions.

• Defining the delegation of powers for each position.

• Assigning regulatory, risk management, and compliance responsibilities to appropriate business and support teams.

l) Be accountable for the actions or omissions of its employees in relation to the conduct of its business.

m) Monitor participant compliance with applicable rules and regulations, ensuring their conduct protects investor interests and the integrity of the securities market.

12. Code of Conduct for Participants

(Part A of Third Schedule of SEBI (D & P) Regulations, 2018)

1. Participants shall make every effort to protect investor interests.

2. Participants shall consistently strive to:

a) Provide the best possible advice to clients, considering their needs, the prevailing environment, and the participant's professional expertise.

b) Ensure all professional dealings are conducted promptly, effectively, and efficiently.

c) Adequately address investor inquiries.

d) Resolve investor grievances without undue delay.

3. Maintain high standards of integrity in all dealings with clients and other intermediaries.

4. Be prompt and diligent in opening beneficial owner accounts, processing dematerialization and rematerialization requests, executing debit instruction slips, and performing other activities on behalf of beneficial owners.

5. Endeavor to resolve all complaints promptly, and in any case, within one month of receipt.

6. Not increase service charges or fees without providing proper advance notice to beneficial owners.

7. Avoid engaging in unfair competition that could harm other participants or investors or place them at a disadvantage in any assignment.

8. Refrain from making exaggerated statements, whether oral or written, regarding qualifications, capabilities, or achievements in service delivery.

9. Not disclose client information to other clients, the press, or any other person without client approval or unless required by law.

10. Cooperate with the Board as and when required.

11. Maintain the necessary level of knowledge and competency, comply with all applicable laws and regulations, and adhere to the awards passed by the Ombudsman under relevant regulations.

12. Avoid making untrue statements or suppressing material facts in any documents or information furnished to the Board.

13. Not neglect or refuse to submit required documents or information to the Board or other regulatory agencies.

14. Promptly inform the Board of any legal actions or proceedings initiated against the participant concerning material breaches or non-compliance with laws or regulations.

15. Maintain a proper system for recording all types of received correspondence.

16. Implement the maker-checker concept in all activities to ensure data accuracy and prevent unauthorized transactions.

17. Take necessary steps to ensure continuity in data and record-keeping, including maintaining up-to-date backups for electronic records.

18. Provide adequate authority and independence to compliance officers for the effective discharge of their duties.

19. Ensure satisfactory internal control procedures and adequate financial and operational capabilities to address potential losses from theft, fraud, or other misconduct.

20. Be responsible for the actions or omissions of employees and agents in relation to business conduct.

21. Ensure that senior management, especially decision-makers, have timely access to all relevant business information.

22. Implement and uphold sound corporate policies and governance practices.