National Depository System

National Depository System – National Depository System is basically a financial repository and a central place to hold financial securities.

It facilitates transfer of shares, bonds and equities via a computer entry electronically and eliminates the requirement of holding those securities physically. Various investors access this depository system with the help of Depository Participants which are brokers, banks and mutual funds etc. In this way, share trading becomes simpler and faster without the need of any security certificate.

Only the electronic record becomes the proof of trade and not any physical unit. Transfer of shares and ownership is done with the assistance of entries made on electronic ledger books.

Electronic transfers of shares and bonds makes processes easier to control and manage.

Ads by Google

The computer entries make it feasible to keep track of large number of entries without losing any of them. Also, the central hold of these entries make it simpler locate and situate the desired entry if the need arises.

Edited and Updated 08th March 2014

You can leave a response, or trackback from your own site.

Leave a Reply

You must be logged in to post a comment.

Powered by WordPress