Principal function of a depository - dematerialize securities and enable their transactions in book-entry form.
The operations of depositories in India are regulated primarily under the following : a) The Depositories Act, 1996, b) SEBI (Depositories and Participants) Regulations, 2018, c) Bye-laws approved by SEBI, and d) Operating Instructions of the depository, e) Prevention of Money Laundering Act, 2002 (PMLA)
Promoters of a depository are also called as Sponsors. A depository company must have a minimum net worth of Rs.100 crore. SEBI registration is must for starting a Depository.
Sponsor(s) of the depository to hold at least 51% of the equity capital.
Participants of the Depository can hold a maximum of 15% of Equity Capital.
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