Can you elaborate on the services offered by CDSL and how these facilitate efficient and secure transactions in the Indian market? What are the key features and benefits of CDSL’s CSD services for investors and market participants in India?
Central Depository Services (India) Limited (CDSL) offers a variety of services designed to facilitate efficient and secure holding and operations of demat accounts in the Indian capital market.
As Asia Pacific’s only listed depository, managing over 125 million demat accounts, CDSL collaborates with more than 570 depository participants (DPs) to provide seamless services for a diverse range of securities across multiple asset classes.
Our services include:
Segregated demat accounts: CDSL enables investors to convert their physical securities into electronic format, ensuring the safe and easy transfer of shares. CDSL maintains segregated accounts for its investors, ensuring clear and distinct ownership of securities. This enhances security, transparency, and complete control to the investors.
Account maintenance: CDSL provides secure maintenance of demat accounts, providing real-time access to account information, transaction history, and market data through its mobile and web platforms. This ensures that investors manage their investments efficiently and make informed decisions.
Transaction services: We enable swift and secure transfer of securities through state-of-the-art, automated processes, ensuring fastest turnaround time (TAT) in transactions, pioneering India’s T+1 settlement landscape and even introducing T+0 settlement for cash and securities in 2024 for select stocks.
Surveillance and compliance: CDSL’s surveillance portal also provides bulk upload facilities, enabling DPs to promptly submit their remarks and due diligence confirmations. This ensures timely resolution of surveillance alerts and compliance with regulatory requirements.
Support infrastructure: Over 13 live branches and dedicated expert help desks, ensure that investors receive support, queries addressed and receive tailored solutions.
CDSL’s commitment to innovation, technology, and investor empowerment established it as a leader in the financial industry. Its services streamline processes, support regulatory oversight, and enhance the user experience, facilitating efficient and secure transactions while empowering financial inclusion in the Indian capital markets.
Can you provide insights into CDSL’s role in enhancing market transparency and reducing settlement risks through its CSD services?
Innovative initiatives by depositories significantly enhance market transparency and reduce settlement risks. A key innovation is the Electronic Delivery Instruction Slip (eDIS), which enables investors to make secure and efficient electronic debit requests without the need for physical delivery instructions. This innovative model has revolutionised the landscape, as it operates as a distinctive B2B endeavour, facilitated by B2C authorisation, thus conferring ultimate control to investors.
Additionally, the introduction of two-factor authentication (2FA) on the Easi/Easiest portal adds an extra layer of security, protecting investors’ demat accounts from unauthorised access. Depositories’ e-Voting and e-AGM platforms facilitate wider shareholder participation by enabling remote voting and attendance at AGMs. Mutual Fund Central (MF Central) provides a comprehensive view of mutual fund holdings, simplifying the investment process. The introduction of Electronic Gold Receipts (EGR) promotes secure and transparent gold trading on exchanges, increasing market liquidity, and reducing settlement risks in the commodities market.
We provide a consolidated account statement (CAS) to all investors who have opted for this service. Investors can choose their regional language for the CAS, currently available in 23 Indian languages. Additionally, the ‘CDSL Buddy Sahayta (Help) 24*7’ chatbot on www.assetservicingtimes.comCentral Depositories 24 the website ensures inclusivity and makes demat information accessible to a broader audience.
What technological innovations has CDSL implemented to improve the efficiency and reliability of its CSD operations?
We have leveraged advanced technology to enhance the efficiency and reliability of central securities depository (CSD) operations.
Application programming interfaces (APIs) for depository participants: By enhancing digital access, depositories have established ‘digital trust’ through a robust suite of APIs that facilitate secure and seamless data processing between DPs and the depositories, ensuring efficient and accurate transactions. CDSL has been a favourite of DPs, especially fintechs, ensuring that its APIs deliver top-tier performance and security.
Electronic Margin Pledge: The electronic Margin Pledge system is a groundbreaking API interface provided to DPs, enabling investors to set up online margin pledges or margin funding requests effortlessly. This innovation also fortifies the overall security of financial operations, with CDSL at the forefront of implementing such secure systems.
Electronic system-driven disclosures (SDD): We have implemented system-driven disclosures (SDD) to ensure transparency and regulatory compliance in trading equity shares. This system-driven approach enhances market integrity and investor confidence.
T+0 rolling settlement cycle: In a significant step towards enhancing market efficiency, depositories introduced a beta version of the T+0 rolling settlement cycle in the equity cash markets for select stocks, effective March 2024. This optional system operates alongside the existing T+1 settlement cycle. This initiative contributes its commitment to advancing financial market infrastructure and reducing operational risks.
What are some notable milestones that CDSL has achieved in the Indian Asset Servicing industry?
CDSL’s extraordinary milestones signify business success as well as a heartfelt commitment to investor education and empowerment over the last 25 years.
CDSL became the first depository to surpass the milestone of 125 million demat accounts, a phenomenal growth of nearly 100 million demat accounts in five years, which is a testament to the investors’ trust in us.
The milestones that reflect our vision of empowering investors are embodied in our goal to be the ‘Atmanirbhar Investor’, ie a self-sufficient investor. This vision is deeply embedded in our ethos.
During our 25th anniversary year in 2024, we launched the Neev campaign, aimed at spreading financial literacy across 25 Indian cities through over 2,000 investor awareness programmes. This campaign, besides spreading financial literacy, reached out to diverse communities, including defence forces personnel and rural areas, ensuring that everyone, regardless of their location or background, has access to essential financial knowledge.
These milestones are a testament to CDSL’s dual focus on achieving business success and making a heartfelt, meaningful impact on society and the economy.
Can you discuss any recent developments or initiatives undertaken by CDSL to address emerging needs and trends in the Indian market?
CDSL has undertaken several initiatives to increase India Central Depositories accessibility to capital markets and empower investors. The reduction of the debit transaction tariff, eDIS, the introduction of the consolidated account statement in 23 Indian languages, and the ‘CDSL Buddy Help 24*7’ chatbot are some of these initiatives. Last year, CDSL successfully concluded ‘Neev,’ a comprehensive financial literacy campaign spanning 25 cities.
How does CDSL support diversification of investment products and services available to investors in India through its CSD infrastructure?
CDSL offers a comprehensive range of services that cater to the diverse investment needs of investors, corporations, and other market participants. These services promote seamless and secure solutions, enhancing ease of business, compliance, and investor participation through operational efficiency, high economies of scale, and innovative service implementation.
For beneficial owners and investors, CDSL provides the Easi and Easiest services for online account monitoring and transaction submissions, the Myeasi app and SMART message services for enhanced accessibility and timely alerts, and the electronic consolidated account statement (eCAS) in 23 languages for inclusivity.
For Depository Participants, CDSL offers various APIs for seamless data processing, including account opening, eDIS for electronic debit requests, and the Online Account Opening (OLAO) application for quick and accurate account setup.
Issuers and corporations benefit from CDSL’s e-voting platform for improved corporate governance.
Other notable services include centralised KYC registration, Aadhaar-based eSign services, and support for the account aggregator (AA) ecosystem, enhancing transparency, data privacy, and financial inclusion.
How does CDSL collaborate with other market infrastructure institutions to streamline and optimise the asset servicing ecosystem in India?
As a Market Infrastructure Institution (MII), CDSL plays a pivotal role through active collaboration with a wide array of stakeholders as regulators, industry participants, custodians, market participants, investor associations, and transfer agent (TA) companies.
CDSL works in close partnership with other market infrastructure institutions such as stock exchanges and clearing corporations. This collaboration is crucial for ensuring seamless settlement processes, efficient clearing mechanisms, and timely reconciliation of transactions.
CDSL extensively partners with banks and depository participants to enhance the reach and accessibility of its services. CDSL can provide its services to a broader audience, ensuring that more investors can benefit from its secure and efficient asset servicing solutions.
CDSL’s collaborative efforts extend to technological advancements. The implementation of robust APIs facilitate secure and seamless data processing between depository participants and CDSL, enhancing operational efficiency and reliability. Innovations such as the electronic margin pledge system and system-driven disclosures further streamline processes and improve market transparency.
These partnerships and innovations reflect CDSL’s commitment to fostering a transparent, secure, and inclusive financial ecosystem, driving growth and confidence in the market.
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