• About NSDL

NSDL stands for National Securities Depository Limited. The enactment of Depositories
Act in August 1996 made the establishment of NSDL, the first depository in India. NSDL
handles most of the securities held and settled in dematerialised form in the Indian
capital market. Using innovative and flexible technology systems, NSDL works to
support the investors in the capital market of the country. NSDL aims at ensuring the
safety by developing settlement solutions that increase efficiency and reduce costs.
Transfer of ownership of securities is done through simple account transfers. Cost of
transacting in a depository is considerably lower as compared to transacting in
certificates.

The Depositories Act has provided dematerialisation route to book entry based transfer of
securities and settlement of securities trade. NSDL has framed its Bye Laws and Business
Rules. The Bye Laws are approved by SEBI. The Business Rules outline the operational
procedures to be followed by NSDL. Also, there are certain benefits of NSDL. In the
depository environment, once holdings of an investor are dematerialised, the question of
bad delivery does not arise. Dealing in physical securities has associated security risks of
theft of stocks, loss of certificates during movements through and from the registrars.
This problem does not arise in the depository environment. There is no stamp duty or
transfer of any kind of securities in the depository.

There are various checks and measures in the depository system to ensure safety of the
investor holdings. A DP can be operational only after registration by SEBI, which is
based on the recommendation from NSDL. DPs are allowed to affect any debit and credit
to an account only on the basis of valid instruction from the client. Every day, there is a
system driven mandatory reconciliation between DP and NSDL. Also, all transactions are
recorded at NSDL Central System and in the databases maintained. In addition, every
month NSDL forwards statement of account to a random sample of investors as a counter
check.
 • About CDSL:

CDSL stands for Central Depository Services Limited. It was promoted by Bombay
Stock Exchange jointly with leading banks such as State Bank of India, Bank of India,
Bank of Baroda, HDFC Bank, etc. CDSL was set up with the objective of providing
convenient, dependable and secure depository services at affordable cost to all market
participants. CDSL offers an efficient transfer of securities.

As it was promoted by the BSE, it became very popular giving competition to NSDL.
The CDSL aimed to provide convenient service and efficiency than NSDL. Today, both
NSDL and CDSL run side by side and have opened more than million demat accounts.
CDSL's demat services are extended through its agents called Depository Participants.
The DP is the link between the investor and CDSL. CDSL's system is based on
centralised database architecture with on-line connectivity with DPs.

CDSL has a wide network of DPs, operating from over 6000 sites, across the country.
The DPs are directly connected to CDSL thereby providing on-line and efficient
depository service to investors. CDSL has kept its tariffs very competitive to provide
affordable depository services to investors. CDSL's system is built on a centralised
database architecture and thus enables DPs to provide on-line depository services with
the latest status of the investor's account. The entire database of investors is stored
centrally at CDSL. It has made provisions for contingency terminals, which enables a DP
to update transactions. All data held at CDSL is backed up and stored in the disaster
recovery site. All data and communications between CDSL and its users are encrypted to
ensure its security and integrity. Moreover, the software provided by CDSL is developed
and supported by CMC Ltd., who has also developed the BOLT system for BSE. The
software is a modified version of the banking software-TC4 developed by a subsidiary of
CMC Ltd. The software has been customized to suit the requirement of CDSL.
Software

Hardware

The server infra structure is procured from Hewlett Packard Company. HP 9000 (64 Bit
RISC architecture) Enterprise server system Model is powered by mission critical HP
UNIX operating system. Which is proven for Reliability, Scalability and High
Availability These systems are highly scalable and provide main frame class Reliability
and Robustness.

This system is connected to one of the most robust and secure storage systems in the
world from EMC, the world leader in products, services, and solutions for information
storage and management. CDSL has invested in an end-to-end fiber architecture storage
system, which combines sixth-generation Fiber Channel 2Gb connectivity, non-disruptive
capacity and performance scalability, multiple 2GHz processors, resulting in faster
performance, continuous data availability and data integrity. The EMC systems also
provide the most advanced software capabilities, including full and incremental
replication and anytime/any distance mirroring for business continuity protection.