A depository participant (DP) is the entity appointed by a depository through which its services are provided to investors.

The investor opens a demat account with a DP to avail services such as dematerialization and rematerialization of shares, maintaining a record of securities held by the investor, settlement of trades by delivery or receipt of securities for transactions done by the investor on the stock exchange, credit of securities on account of subscription in an IPO or rights and bonus securities received, among others.

To be a DP, the entity has to comply with the eligibility requirements prescribed in the SEBI (Depository and Participants) Regulations, 2018. The applicant has to be a public financial institution, bank, state financial corporation, custodian, clearing corporation, stock broker, non-banking finance company or registered transfer agent. The applicant must have adequate infrastructure and trained personnel to carry out functions of a DP. Sebi grants certificate of registration for applicants to be a participant of the depository. The functions and responsibilities of the participant is laid out by Sebi in the regulations.

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