In case of a stock-broker DP, the total value of the securities held by its clients, should not be more than 100 times the net worth of the DP. If the stock-broker DP's net worth is more than Rs. 10 crores, then the above limit on the total value of client's securities is not applicable.
Entity eligible and desirous of becoming a DP makes an application to Depository. Depository forwards it to SEBI within 30 days with its recommendations.
A certificate of registration to act as DP is valid unless it is suspended or cancelled by the Board. To keep registration in force DP should pay registration fee once in 5 years to SEBI
Conditions for grant of Registration to act as DP : (1) Business history for a minimum period of last 3 years, (2) Should not have been convicted in the last 5 years (3) It should not have been suspended or expelled by SEBI or any Stock Exchange. But if 3 or more years have passed since the punishment, the depository may also consider the application on its discretion (4). Appoint Compliance Officer as well as furnish all details of the Board of Directors.
Securities can be transferred only on beneficial owner's instructions.
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