What is CDSL and How Does It Work?

Central Depository Services Limited (“CDSL”) was discovered in 1999 to fulfill one objective: Convenient, Dependable, and secured depository services. Over two years later, everything we have done, the values we have built on, the de-materialization of various asset classes, and e-services have all been in support of that singular objective, at a reasonable cost.
We are a Market Infrastructure Institution (MII) and a crucial part of the Capital market assembly. We provide services to all Market members, Exchanges, Clearing Corporations, Depository Participants (DPs), Issuers, and Investors.

How does CDSL Work?

Now that you know what CDSL is, let’s understand the working mechanism of this depository institution. The operating mechanism of this is just like a bank. The difference is that while banks have money from depositors, CDSL has securities from investors in an electronic format.
However, you can’t directly approach CDSL and open an account. You have to do so with the help of a depository participant or DP.

What is a CDSL Demat Account?

The CDSL Demat account is the account you hold with CDSL. For opening a Demat account, you need to visit a DP, the list of which can be found on CDSL’s website. Once you have selected the DP registered with CDSL, you need to submit your KYC documents, including address proof and PAN Card, along with the bank account details.
Upon successful verification, you will get your CDSL Demat account number and other related details. The CDSL Demat account will be not only helpful in availing the services of CDSL but also aid trading in stocks and other securities. Demat accounts with CDSL have a 16-digit numeric character.

What is a Depository Participant?

A depository participant is an intermediary between you, the investor, and CDSL. In other words, a DP is an authorized agent of CDSL who acts as a link between the beneficial owner, the stock exchange, and the issuing company. The beneficial owner is the person who uses the services of the DP.
As per guidelines of the Securities and Exchange Board of India (SEBI), banks, financial institutions, and all stockbrokers are eligible to act as DPs. It has authorized DPs to help investors nationwide handle securities in a digitalized format.

Understanding Central Depository Services Ltd. (CDSL)

It maintains the book entry of all electronic transactions made to all depository participants (DP). DPs are agents of this, and they all hold their assets with the company for clearing, holding, and settlement. The Beneficial Owner (BO), also called the investor, can open a dematerialization account (DEMAT) through the DPs to enable the transfer of the securities from the DP to the investor’s account. As a depository service, plays an essential role in everyday transactions. Where once physical certificates had to be issued to determine the ownership of a share, CDSL eliminates that need. It also ensures that its DPs are accountable for the investors’ data and dealings and provide detailed overviews to the BOs at intervals. On the other finger, at the time of issuing dividends, companies listed on BSE can consult CDSL on data about the shareholders and transfer the amount to them.

What are the Benefits of CDSL EASIEST?

Access to your Demat Account

With the EASIEST portal, you can access your demat account anytime and anywhere in the world. You can view, download, and print transaction and holding statements.

Transfer of Securities

As you’ve already seen above, you can quickly initiate the online transfer of securities through EASIEST. No longer we have to do it manually by filling and submitting DIS to your depository participant.

Single Point Login

Thanks to EASIEST, even if you possess multiple demat accounts with CDSL, you can access all of them under a single roof with just one login.

Maximum Security

All the transactions that you make through EASIEST are safe, secure, and encrypted. Even the transfer of securities can only be made after multiple checks and authorizations on your part.

Conclusion

As you can see, EASIEST offers a lot of conveniences to demat account holders. If you don’t already possess a Demat account but would like to have one, visit Motilal Oswal right away. You can also open an online demat account without any payment within minutes.