The Securities and Exchange Board of India’s (Sebi) decision to move to a single-registration policy for depository participants has received plaudits from the brokerage industry for ‘simplifying’ the process.
At Sebi’s board meet here on Wednesday, the board members reached agreement to grant “single registration for the application of initial registration as well as the permanent registration for operating with both the depositories”.
Brokers believe the new process will condense the registration process and save time. “The new policy will make the process for getting registered as DP shorter. While it is difficult to quantify whether this will lead to a rise in number of DPs, it will reduce the time required for registrations and bring down the paper-work,” said Vinay Agrawal, executive director at Angel Broking. Nirmal Jain, founder and chairman of IIFL Holdings, adds that Sebi has simplified the process, which is a positive for the industry.
Under the current regulations, the applicants are granted initial registration for five years and three months before the expiry of the initial registration, the KYC Registration Agency (KRA) can apply for a permanent registration. Further, the depository participants are required to obtain separate registration for both the depositories.
Raamdeo Agrawal, managing director and co-founder of Motilal Oswal Financial Services, feels that more such steps should be taken by the market regulator. “A simpler KYC process will significantly improve the retail participation in markets. However, the thought process behind this move is laudable,” Agrawal said.
Throwing further light on what could be the new DP registration process, an official with the Central Depository Services (CDSL) said that now once a broker is registered with one depository as a DP, he just needs to approach another depository with the Sebi registration details to get registered with that depository.
The official added that while both the major depositories in India have 40-50 banks registered with them, CDSL services a relatively more number of brokers. According to data available on depository’s websites, the number of depository participants on National Securities Depository (NSDL) stood at 273 as on October 31, 2014, while the number of depository participants on CDSL stands at 575.