New Delhi: Making procedural requirements simpler for brokers, Sebi put in place a new mechanism to allow one-time single registration for the depository participants. So far, the depository participants (DPs) had to apply for separate registration certificate to operate on the nation's two depositories -- Central Depository Services India Ltd (CDSL) and National Securities Depository Ltd (NSDL).
Brokers and some other entities need to register themselves as depository participants with either NSDL or CDSL to operate in the capital markets. The new norms would help ensure cost efficiency, avoidance of multiple due diligence process and prevent duplication of registration process. In a notification issued today, Securities and Exchange Board of India said that "the existing requirement of obtaining certificate of initial registration to act as a participant and subsequently permanent registration to continue to act as a participant for each depository has been done away with".
"Henceforth, one certificate of initial registration and subsequently permanent registration through any depository shall be required after commencement of the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2014," it added.
As per the new guidelines, DPs would have to apply to Sebi for "permanent registration" through any of the depositories in which it is acting as a participant. A new entity seeking to act as a participant would have to apply for "initial registration" with Sebi through the concerned depository.
"If an entity has been granted a certificate of registration to act as a participant through one depository and wishes to act as a participant with the other depository then it shall directly apply to the concerned depository for approval in the manner as prescribed in the DP Regulations," Sebi said.
"The concerned depository, on receipt of the application, may grant approval to the entity after exercising due diligence and on being satisfied about the compliance of all relevant eligibility requirements," it added. Sebi said the participants would continue to pay the applicable annual fees and registration fees as applied currently.
Moreover, the market watchdog has asked the depositories to coordinate and share information with each other, about their participants. The depositories have been directed to communicate to Sebi, the status of the implementation of the new norms through 'Monthly Development Report' of the following month, while they are also been asked to bring the new provisions to the notice of the depository participants, among others. In October this year, Sebi had made one-time single registration process applicable for stock brokers and clearing entities.
