Sebi committee to review depository system
The depositories work as safe-keepers of various kinds of securities issued by the companies as well as other entities and these entities are regulated by the Sebi (Securities and Exchange Board of India).
The depositories have the mandate to help the companies convert their physical shares or securities into dematerialised or demat form and thereafter maintain those
shares, and also supervise proper conversion and reconciliation of their total share capital by the companies.
A 'Depository System Review Committee' constituted by Sebi has been asked to conduct an overall assessment/adequacy of existing depository framework and identify potential areas for review, a senior official said.
The move comes at a time when efforts are on to expand the ambit of depositories by allowing them to hold new asset classes in demat format.
Sebi has received suggestions from the government to expand the list of asset classes to be held by a depository.
It has been suggested that there are many assets/records such as warehouse receipts, fixed deposits with banks and corporates, insurance policies, Post Office investments and University degree certificates that can be held in demat form.
To begin with, depositories may be be first allowed to hold only those financial assets for which there exists a sectoral regulator, as it might require legal amendments in relevant Acts before Sebi might notify records such as degree certificates as securities,
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