INVESTOR CHARTER (NSDL)

Annexure A

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

1. To hold securities of investors in dematerialised form and facilitate its transfer, while ensuring safekeeping of securities and protecting interest of investors.
2. To provide timely and accurate information to investors with regard to their holding and transfer of securities held by them.
3. 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 [https://nsdl.co.in/dpsch.php]

4. Description of services provided by the Depository through Depository Participants (DP) to investors

(1) Basic Services

(2) Depositories provide special services like pledge, hypothecation, internet based services etc. in addition to their core services and these include

5. Details of Grievance Redressal Mechanism

(1) The Process of investor grievance redressal

(2) Illustration of New Grievance Redressal System:

The flow-chart of New Grievance Redressal System¹⁰

6. Guidance pertaining to special circumstances related to market activities: Termination of the Depository Participant

7. Dos and Don’ts for Investors¹¹

8. Rights of investors¹²

9.Responsibilities of Investors¹³

10.Code of Conduct for Depositories¹⁴

11.Code of Conduct for Participants¹⁵

Annexure B

INFORMATION CONTAINED IN LINKS TO THE INVESTOR CHARTER

This document contains the contents in main Charter mapped with the same superscript.

Para 4 (2) of Investor Charter

Point 1: Value Added Services

• Basic Services Demat Account (BSDA):¹

  The facility of BSDA with limited services for eligible individuals was introduced with the objective of achieving wider financial inclusion and to encourage holding of demat accounts. No Annual Maintenance Charges (AMC) shall be levied, if the value of securities holding is upto Rs. 50,000. For value of holdings between Rs 50,001- 2,00,000, AMC not exceeding Rs 100 is chargeable. In case of debt securities, there are no AMC charges for holding value upto Rs 1,00,000 and a maximum of Rs 100 as AMC is chargeable for value of holdings between Rs 1,00,001 and Rs 2,00,000.

• Transposition cum dematerialization: ²

  In case of transposition-cum- dematerialisation, client can get securities dematerialised in the same account if the names appearing on the certificates match with the names in which the account has been opened but are in a different order. The same may be done by submitting the security certificates along with the Transposition Form and Demat Request Form.

• Linkages with Clearing System: ³

  for actual delivery of securities to the clearing system from the selling brokers and delivery of securities from the clearing system to the buying broker.

Point 2: Digitization of services provided by the depositories

1. E-account opening:⁴

   Account opening through digital mode, popularly known as “On-line Account opening”, wherein investor intending to open the demat account can visit DP website, fill in the required information, submit the required documents, conduct video IPV and demat account gets opened without visiting DPs office.

2. Online instructions for execution: ⁵

   internet-enabled services like Speed-e (NSDL) & Easiest (CDSL) empower a demat account holder in managing his/her securities ‘anytime-anywhere’ in an efficient and convenient manner and submit instructions online without the need to use paper. These facilities allows Beneficial Owner (BO) to submit transfer instructions and pledge instructions including margin pledge from their demat account. The instruction facilities are also available on mobile applications through android, windows and IOS platforms.

3. e-DIS / Demat Gateway: ⁶

   Investors can give instructions for transfer of securities through e-DIS apart from physical DIS. Here, for on-market transfer of securities, investors need to provide settlement number along with the ISIN and quantity of securities being authorized for transfer. Client shall be required to authorize each e-DIS valid for a single settlement number / settlement date, by way of OTP and PIN/password, both generated at Depositories end. Necessary risk containment measures are being adopted by Depositories in this regard.

4. e-CAS facility:⁷

   Consolidated Account Statements are available online and could also be accessed through mobile app to facilitate the investors to view their holdings in demat form.

5. Miscellaneous services: ⁸

   Transaction alerts through SMS, e-locker facilities, chatbots for instantaneously responding to investor queries etc. have also been developed.

Para 5(1)(b) of Investor Charter

Offline Mode⁹

Query / Complaint form – for Depository Services

Date

Name of the Investor

Demat Account no

Dp Id

Client Id

PAN

Mobile no

Email ID

Type & Sub-type of Query/Complaint:

Query / Complaint in detail

Para 5(2) of Investor Charter

Illustration of New Grievance Redressal System¹⁰

Para 7 of Investor Charter

Dos and Don’ts for Investor¹¹

Para 8 of Investor Charter

Rights of investors¹²

1. Receive a copy of KYC, copy of 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. iv.If executed, receive a copy of Power of Attorney. However, Power of Attorney is not a mandatory requirement as per SEBI / Stock Exchanges. You have the right to revoke any authorization given at any time.
5. You can open more than one demat account in the same name with single DP/ multiple DPs.
6. Receive statement of accounts periodically. In case of any discrepancies in statements, take up the same with the DP immediately. If the DP does not respond, take up the matter with the Depositories.
7. Pledge and /or any other interest or encumbrance can be created on demat holdings.
8. Right to give standing instructions with regard to the crediting of securities in demat account.
9. Investor can exercise its right to freeze/defreeze his/her demat account or specific securities / specific quantity of securities in the account, maintained with the DP.
10. In case of any grievances, Investor has right to approach Participant or Depository or SEBI for getting the same resolved within prescribed timelines.
11. Every eligible investor shareholder has a right to cast its vote on various resolutions proposed by the companies for which Depositories have developed an internet based ‘e-Voting’ platform.
12. Receive information about charges and fees. Any charges/tariff agreed upon shall not increase unless a notice in writing of not less than thirty days is given to the Investor.
13. Right to indemnification for any loss caused due to the negligence of the Depository or the participant.
14. Right to opt out of the Depository system in respect of any security.

Para 9 of Investor Charter

Responsibilities of Investors¹³

1. Deal with a SEBI registered DP for opening demat account, KYC and Depository activities.
2. Provide complete documents for account opening and KYC (Know Your Client). Fill all the required details in Account Opening Form / KYC form in own handwriting and cancel out the blanks.
3. Read all documents and conditions being agreed before signing the account opening form.
4. Accept the Delivery Instruction Slip (DIS) book from DP only (preprinted with a serial number along with client ID) and keep it in safe custody and do not sign or issue blank or partially filled DIS.
5. Always mention the details like ISIN, number of securities accurately.
6. Inform any change in information linked to demat account and obtain confirmation of updation in the system.
7. Regularly verify balances and demat statement and reconcile 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 luring to trade in stocks / securities promising huge profits.

Para 10 of Investor Charter

Code of Conduct for Depositories¹⁴

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

A Depository shall:

1. 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 the Board from time to time.
2. adopt appropriate due diligence measures.
3. take effective measures to ensure implementation of proper risk management framework and good governance practices
4. take appropriate measures towards investor protection and education of investors
5. treat all its applicants/members in a fair and transparent manner.
6. promptly inform the Board of violations of the provisions of the Act, the Depositories Act, 1996, rules, regulations, circulars, guidelines or any other directions by any of its issuer or issuer’s agent
7. take a proactive and responsible attitude towards safeguarding the interests of investors, integrity of depository’s systems and the securities market.
8. endeavor for introduction of best business practices amongst itself and its members.
9. act in utmost good faith and shall avoid conflict of interest in the conduct of its functions.
10. not indulge in unfair competition, which is likely to harm the interests of any other Depository, their participants or investors or is likely to place them in a disadvantageous position while competing for or executing any assignment.
11. segregate roles and responsibilities of key management personnel within the depository including

    a. Clearly mapping legal and regulatory duties to the concerned position

    b. Defining delegation of powers to each position

    c. Assigning regulatory, risk management and compliance aspects to business and support teams

12. be responsible for the acts or omissions of its employees in respect of the conduct of its business.
13. monitor the compliance of the rules and regulations by the participants and shall further ensure that their conduct is in a manner that will safeguard the interest of investors and the securities market.

Para 11 of Investor Charter

Code of Conduct for Participants¹⁵

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

1. A participant shall make all efforts to protect the interests of investors.
2. A participant shall always endeavour to—

   (a) render the best possible advice to the clients having regard to the client’s needs and the environments and his own professional skills;

   (b) ensure that all professional dealings are effected in a prompt, effective and efficient manner;

   (c) inquiries from investors are adequately dealt with;

   (d) grievances of investors are redressed without any delay

3. A participant shall maintain high standards of integrity in all its dealings with its clients and other intermediaries, in the conduct of its business.
4. A participant shall be prompt and diligent in opening of a beneficial owner account, dispatch of the dematerialisation request form, rematerialisation Page 11 of 12 request form and execution of debit instruction slip and in all the other activities undertaken by him on behalf of the beneficial owners.
5. A participant shall endeavour to resolve all the complaints against it or in respect of the activities carried out by it as quickly as possible, and not later than one month of receipt.
6. A participant shall not increase charges/fees for the services rendered without proper advance notice to the beneficial owners.
7. A participant shall not indulge in any unfair competition, which is likely to harm the interests of other participants or investors or is likely to place such other participants in a disadvantageous position while competing for or executing any assignment.
8. A participant shall not make any exaggerated statement whether oral or written to the clients either about its qualifications or capability to render certain services or about its achievements in regard to services rendered to other clients.
9. A participant shall not divulge to other clients, press or any other person any information about its clients which has come to its knowledge except with the approval/authorisation of the clients or when it is required to disclose the information under the requirements of any Act, Rules or Regulations.
10. A participant shall co-operate with the Board as and when required.
11. A participant shall maintain the required level of knowledge and competency and abide by the provisions of the Act, Rules, Regulations and circulars and directions issued by the Board. The participant shall also comply with the award of the Ombudsman passed under the Securities and Exchange Board of India (Ombudsman) Regulations, 2003.
12. A participant shall not make any untrue statement or suppress any material fact in any documents, reports, papers or information furnished to the Board.
13. A participant shall not neglect or fail or refuse to submit to the Board or other agencies with which it is registered, such books, documents, correspondence, and papers or any part thereof as may be demanded/requested from time to time.
14. A participant shall ensure that the Board is promptly informed about any action, legal proceedings, etc., initiated against it in respect of material breach or noncompliance by it, of any law, Rules, regulations, directions of the Board or of any other regulatory body.
15. A participant shall maintain proper inward system for all types of mail received in all forms.
16. A participant shall follow the maker—Checker concept in all of its activities to ensure the accuracy of the data and as a mechanism to check unauthorised transaction.
17. A participant shall take adequate and necessary steps to ensure that continuity in data and record keeping is maintained and that the data or records are not lost or destroyed. It shall also ensure that for electronic records and data, upto-date back up is always available with it.
18. A participant shall provide adequate freedom and powers to its compliance officer for the effective discharge of his duties.
19. A participant shall ensure that it has satisfactory internal control procedures in place as well as adequate financial and operational capabilities which can be reasonably expected to take care of any losses arising due to theft, fraud and other dishonest acts, professional misconduct or omissions.
20. A participant shall be responsible for the acts or omissions of its employees and agents in respect of the conduct of its business.
21. A participant shall ensure that the senior management, particularly decision makers have access to all relevant information about the business on a timely basis.
22. A participant shall ensure that good corporate policies and corporate governance are in place.