Country Report - National Securities Depository Limited, India

National Securities Depository Limited (NSDL), the India's first and the largest depository witnessed a substantial growth in terms of custody value, settlement volumes, number of client accounts etc. The performance summary in various segments of NSDL is highlighted hereunder for the year 2007:

1) Key Performance Summary:

The number of client accounts opened as well the custody value in NSDL continued to rise as per the details given below.

Client Accounts
(in million) / Custody / Settlement

Demat quantity

(in billion) / Demat Value
(in USD billion) / Demat Quantity
(in billion) / Demat Value
(in USD billion)

Mar 2006

/ 7.6 / 175 / 613 / 5.0 / 23.4
Mar 2007 / 7.9 / 203 / 777 / 3.8 / 17.4

2) Corporate Actions :

Issuers continue to extensively use corporate action facility of NSDL in distributing securities arising out of various corporate actions such as Public Offers (including IPOs), Bonus, Rights etc. This process has eliminated the need for printing security certificates. Also, the securities are delivered quickly and the number of investor grievances has reduced substantially. The table given below gives the details of corporate actions executed over a period of three years:

April to March / No of Corporate Actions / No. of allottees
(in million) / No of securities distributed
(in billion)
2006-07 / 14909 / 11.30 / 46
2005-06 / 12906 / 12.21 / 36
2004-05 / 7108 / 7.75 / 24

3) Performance of NSDL'sInternet based initiatives:

(i)SPEED-e: Using this facility, demat account holders can submit instructions electronically. The number of instructions received through SPEED-e has been on the rise. The details are given hereunder:

No of DPs providing SPEED-e / Clients using SPEED-e / Number of Instructions executed through SPEED-e (in million)

March 2005

/ 46 / 9295 / 7.33

March 2006

/ 60 / 13814 / 14.63

March 2007

/ 73 / 17572 / 25.76

(ii) IDeAS: Using this facility, demat account holders can view balances and transactions in their depository accounts. These details are updated on an online basis and the statements that are available for download are digitally signed by NSDL. The details are given hereunder:

No of DPs / Clients registered for IdeAS

March 2005

/ 93 / 7,766

March 2006

/ 114 / 17,595

March 2007

/ 128 / 24,436

iii) STeADY is the Straight Through Processing (STP) facility of NSDL. STeADY enables transfer of digitally signed trade information (Electronic Contract Notes) with encryption across various market Participants. The details are given hereunder:

Contract Notes / Trade details (in million)

March 2005

/ 2,74,658 / 27.06

March 2006

/ 6,38,612 / 67.87

March 2007

/ 11,07,024 / 127.05

4) BS7799 certification for Depository Operations :

In order to benchmark the IT practices against well accepted international standards and obtain a third party certification as a further confidence building measure for Foreign Institutional Investors in NSDL's system, NSDL has obtained BS7799 certification(now ISO 27001) for all its systems including the depository system, internet based services viz., SPEED-e, IDeAS and STeADY.

5)Dematerialisation of warehouse receipts:

Warehouse receipts (WR) are the documents issued by warehouses in respect of commodities that are deposited with them. These warehouse receipts can be transferred by endorsement and delivery and the holder can claim physical delivery of commodities from the warehouse. Based on the success of dematerialisation of securities, Commodity Exchanges have worked out a scheme to extend depository services for holding and settling trades in commodity futures. The warehouse receipts are held in electronic book entry form, through the Participants of NSDL. Details of dematerialisation of warehouse receipts are :

Particulars / As on March 31, 2007
Number of DPs providing service / 49
Total number of commodities admitted / 32
Number of Accounts having Warehouse receipts / 291
Positions in Commodity Id / 1636
Number of warehouses / 22

6)Tax Information Network (TIN)

NSDL has undertaken a project for setting up a Tax Information Network (TIN) on behalf of the Income Tax department (ITD) of India. TIN is an initiative by ITD for modernization of the current system of collection, processing, monitoring and accounting of direct taxes. TIN is expected to enhance the convenience of record keeping, preparation of tax returns and reduce the cost of compliance. TIN enables deductors of tax to report the details of withholding taxes in an electronic form and the same is matched with the tax deposited with the banks. TIN also provides to every tax assessee the facility to view its tax statement.