Depositories Act, 1996 : a) Primary objective of Dematerializing the securities in the depository mode, b) Making securities of public limited companies freely transferable, c) Maintenance of ownership records in a book entry form
Companies Act, 2013 : a) Issue, allotment and transfer of securities, b) Underwriting, the use of premium and discounts on issues, rights and bonus issues, substantial acquisitions of shares, payment of interest and dividends, supply of annual report and other information. Act also provides for Insolvency and NCLT/NCLAT provisions.
The SROs ensure compliance with their own rules as well as with the rules relevant for them under the securities laws.
Need for a Depository System : a) Bad Deliveries, b) Unable to transfer securities in quick and speedy manner as each transfer requires physical movement of securities and change of ownership being evidenced by an endorsement on physical security, c) Delay in delivery of physical securities and d) Theft, forgery, mutilation of certificates and other irregularities.
Multi-Depository system: NSDL and CDSL are offering Depository services.
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