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Act22
Enacted 1996

The Depositories Act, 1996

In force 60 sections Finance

An Act to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto.

Act 22 of 1996 Enacted 10 Aug 1996 In force 20 Sep 1995 Department Department of Economic Affairs

Administered by. Ministry of Finance, Department of Economic Affairs · Other Acts of 1996

Preamble

THE DEPOSITORIES ACT, 1996

ACT NO. 22 OF 1996

[10th August, 1996.] An Act to provide for regulation of depositories in securities and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Forty-seventh Year of the Republic of India as follows:--

What this Act covers

Summary of the Depositories Act, 1996

Key Provisions

• Establishment and Regulation of Depositories: The Act provides for the establishment and regulation of depositories, which hold securities in electronic form and facilitate their transfer. A depository can commence business only after obtaining a certificate of registration from the Securities and Exchange Board of India (SEBI).

• Dematerialisation and Rematerialisation: The Act enables investors to convert physical securities into electronic form (dematerialisation) and, where permitted, reconvert electronic holdings into physical certificates (rematerialisation).

• Depository Participants (DPs): Investors access depository services through Depository Participants, who act as intermediaries between the depository and the beneficial owner.

• Rights of Beneficial Owners: While the depository is recorded as the registered owner of the securities for the limited purpose of effecting transfers, the beneficial owner retains all rights and benefits attached to the securities, including voting rights, dividends, and other entitlements.

• Transfer of Securities: The Act provides for the transfer of securities through electronic book entries, eliminating the need for physical transfer deeds and certificates.

• Pledge and Hypothecation: It enables securities held in a depository to be pledged or hypothecated in accordance with prescribed procedures.

• Records and Inspection: Depositories are required to maintain accurate records, and SEBI is empowered to inspect and regulate their operations.

• Rule-making and Regulations: The Central Government may make rules, while SEBI may make regulations for implementing the provisions of the Act.

Sections

Type to filter. 60 sections.

  1. 1Short title, extent and commencement
  2. 2Definitions
  3. 3Certificate of commencement of business by depositories
  4. 4Agreement between depository and participant
  5. 5Services of depository
  6. 6Surrender of certificate of security
  7. 7Registration of transfer of securities with depository
  8. 8Options to receive security certificate or hold securities with depository
  9. 9Securities in depositories to be in fungible form
  10. 10Rights of depositories and beneficial owner
  11. 11Register of beneficial owner
  12. 12Pledge or hypothecation of securities held in a depository
  13. 13Furnishing of information and records by depository and issuer
  14. 14Option to opt out in respect of any security
  15. 15Act 18 of 1891 to apply to depositories
  16. 16Depositories to indemnify loss in certain cases
  17. 17Rights and obligations of depositories, etc
  18. 18Power of Board to call for information and enquiry
  19. 19Power of Board to give directions in certain cases
  20. 19APenalty for failure to furnish information, return, etc
  21. 19BPenalty for failure to enter into an agreement
  22. 19CPenalty for failure to redress investors‟ grievances
  23. 19DPenalty for delay in dematerialisation or issue of certificate of securities
  24. 19EPenalty for failure to reconcile records
  25. 19FPenalty for failure to comply with directions issued by Board under section 19 of the Act
  26. 19FAPenalty for conduct business in a fair manner
  27. 19GPenalty for contravention where no separate penalty has been provided
  28. 19HPower to adjudicate
  29. 19-IFactors to be taken into account by adjudicating officer
  30. 19-IASettlement of Administrative and Civil Proceedings
  31. 19-IBRecovery of amounts
  32. 19-ICContinuance of proceedings
  33. 19JCrediting sums realised by way of penalties to Consolidated Fund of India
  34. 20Offences
  35. 21Offences by companies
  36. 22Cognizance of offences by courts
  37. 22AComposition of certain offences
  38. 22BPower to grant immunity
  39. 22CEstablishment of Special Courts
  40. 22DOffences triable by Special Courts
  41. 22EAppeal and revision
  42. 22FApplication of Code to proceedings before Special Court
  43. 22GTransitional provisions
  44. 23Appeals
  45. 23AAppeal to Securities Appellate Tribunal
  46. 23BProcedure and powers of Securities Appellate Tribunal
  47. 23CRight to legal representation
  48. 23DLimitations
  49. 23ECivil Court not to have jurisdiction
  50. 23FAppeal to Supreme Court
  51. 23GPowers of Board not to apply to International Financial Services Centre
  52. 24Power of Central Government to make rules
  53. 25Power of Board to make regulations
  54. 26Power of depositories to make bye-laws
  55. 27Rules and regulations to be laid before Parliament
  56. 28Application of other laws not barred
  57. 29Removal of difficulties
  58. 30Repealed
  59. 30AValidation of certain acts
  60. 31Repeal and saving

Schedules

This Act has 1 schedule. A schedule is published as a document of its own; the text is reproduced on its page where it has been read, and the document is mirrored here either way.

Amending Acts

2 Acts amending this enactment, passed by Parliament of India. The text above is the consolidated text as published.

  • The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 201622 of 2016
  • The Securities Laws (Amendment) Act, 201422 of 2014

Rules made under this Act

3 sets of Rules. India Code publishes Rules as a record and a document rather than as text, so these are indexed here and not reproduced. All Rules.

  • the Depositories (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 2005.2005
  • the Depositories (Appeal to Securities Appellate Tribunal) Rules, 2000.2000
  • the Depositories (Appeal to the Central Government) Rules, 1998.1998

Related Acts

Ordinances

India Code records no parent Act for an ordinance, so these are tied to this Act by their own titles and their dates rather than by anything the source states. An ordinance is made when Parliament is not sitting and lapses six weeks into the next session unless it is enacted.

  • The Depositories (Second) Ordinance, 1996.enacted as this Act · 1996
  • The Depositories (Third) Ordinance, 1996.enacted as this Act · 1996
  • The Depositories Ordinance, 1996.enacted as this Act · 1996

All Ordinances

Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Every one of the 60 sections of this Act has its own page. This page is not a substitute for legal advice.