Depository SystemsIntroduction What is Depository? An organization where the securities of an investor are held in electronic form at the request of the investor and which carries out the securities transactions by book entry through the medium of a depository participant. What is a Depository System? A system whereby transfer of securities takes place by means of book entry on the ledgers of the Depository without physical movement of scripts.Legal framework Depositories Act !""# provides for the establishment of single or multiple depositories. $ach depository must be formed and registered as a company under the %ompanies Act!". 'he Depositories Act provides for detailed regulations to be framed by ($)I and detailed bye*laws to be framed by depositories with the approval of ($)I.+echanism of Depository (ystem 'he Depositories Act envisages that each depository will have its agents to be known as ,depository participants- .D/s0 who shall be a crucial link between the investors and the depository. As per ($)I guidelines financial institutions banks stock brokers etc can become D/s after following the norms prescribed under ($)I.Depositories and /articipants0 1egulations !""# and other applicable conditions.2pen a 3D$+A' A%%245'6with a depository participant .D/0 of anydepositoryD/ selection by investor done on the basis of fee payable pro7imity service levels etc.8ill up account opening form i.e. supported by /2I and /2A.anyone approved document i.e. specified by ($)I09erification of original documents by an authorized official of the D/(ign an agreement with D/ .Depository prescribed format0 that details rights and duties of investor and D/D/ should provide the investor with a copy of agreement and schedule charges for his future reference Account number of D/ :)2ID .)eneficiary 2wner Identification 5umber0A%%245' 2/$5I5; In a circular .?!>