• 1. What is a depository?

    A depository is an entity which facilitates the holding and/or transacting securities in book entry/electronic form. It is a kind of “bank for securities” like: shares, debentures, bonds, etc. It also facilitates transactions in the securities held by it.

  • 2. Who is acting in the capacity of depository in Nepal?
    CDS and Clearing Limited (CDSC) is acting in the capacity of depository in Nepal.
  • 3. Who are the parties involved with CDSC?

    The following parties are involved with CDSC:

    1. Beneficial Owner (BO)
    2. Depository Participant (DP)
    3. Issuer
    4. Registrar and Transfer Agent (RTA)
    5. Stock Brokers
  • 4. Who is a BO?
    BO is a person (individual or institution) who has opened a Demat Account with the depository.
  • 5. Who is a DP?

    A DP is an agent of the depository who is authorized to offer depository services to investors.

  • 6. Who can be a DP?

    Bank and financial institutions, stock brokers, registrar and transfer agent, and other as prescribed by SEBON from time to time complying with the requirements prescribed by SEBON can be registered as DP.

  • 7. Who is Issuer?
    Issuer is a company/institution whose securities have been issued publicly.
  • 8. Who is RTA?

    RTA is an institution who on behalf of any corporate body, maintains the records of holders of securities issued by such body corporate and deals with all matters connected with the transfer and redemption of its securities.

  • 9. Who is stock brokers?

    A stockbroker or most commonly known as broker is an institution which executes buy and sell orders for stocks and other securities on behalf of clients.

  • 10. What is demat account?

    Demat account is similar to bank account in which securities like: shares, debentures, mutual fund units are held in the electronic form. When the BO purchases securities, the securities are deposited in BO’s demat account and when the securities are sold, the securities so sold are deducted from the account.

  • 11. What is BOID?

    BOID is a unique 16 digit identification number given to BO which is generated only when BO opens the demat account in CDSC through an authorized DP. BOID must be mentioned in all future transactions. BOID cannot be duplicate. It means two BOs cannot have same BOID which replicates that the securities cannot be transferred into the wrong account. BOID has two sections: DPID and Client ID. The first 8 digits represent the DPID and last 8 digits represent the Client ID.

  • 12. What is Dematerialization?
    “Dematerialization” is a process by which physical certificates are converted into electronic form.
     
  • 13. What is Rematerialization (Remat)?

    Rematerialization is the process of converting securities held in electronic form in a demat account back in physical certificate form.

  • 14. What is an ISIN (International Securities Identification Number)?
    “ISIN” is a unique 12 digit alphanumeric code given to a security like: shares, debentures, mutual fund units etc. when the security is admitted in the depository system. First two digits of the ISIN code indicate country of registration. For all securities registered in depository in Nepal, first two digits of the ISIN code are ‘NP’.
  • 15. Whether different securities issued by the same Issuer will have same ISIN?
    No, different securities issued by the same issuer will have different ISIN code.
  • 16. What are the services provided by a Depository?

    Following services are provided by a depository to the beneficial owners but of course, through a depository participant:

    1. Demat account opening
    2. Dematerialization of securities
    3. Maintaining record of securities in electronic form
    4. Settlement of trades executed on NPESE (On market trades) by transferring/receiving the securities to/from demat account
    5. Settlement of trades executed outside NPESE (Off-market trades)
    6. Facilitating pledge/unpledged/freeze/unfreeze of dematerialized securities
    7. Providing electronic credit in respect of securities allotted by issuers under IPO/Right/Bonus etc.
    8. Providing statement of securities held by the customer
  • 17. Can a demat account be opened directly with Depository?
    No. A demat account cannot be opened directly with Depository. It has to be opened only through a DP of Depository.
  • 18. Can an investor open multiple demat accounts?
    A person can open up to two demat accounts in two different DPs; more than one demat account in same DP is not possible.
  • 19. Is it necessary for an investor to open demat account with the broker through which trading is done?
    No. An investor can open demat account with the DP of his/her choice and carry on trading through broker of his choice.
  • 20. Can a demat account be opened in the name of Joint Holders?
    No. A demat account can be opened in a single name only.
  • 21. Can a Demat account be opened for a minor?

    Yes. However, the account will be operated by a guardian till the minor becomes major. Guardian has to be the father or in his absence mother. In absence of both, father or mother, the guardian can be appointed by court.

  • 22. Is nomination compulsory for a demat account?

    No

  • 23. Is dematerialization of securities compulsory?

    For trading, dematerialization is compulsory. However, the investors already holding securities in physical form can hold the certificates in physical form.

  • 24. Is there any charge for dematerialization of physical certificates?
    Depository does not levy any charge for dematerialization of securities.