With CDSL, every clearing member is assured of personalized services, timely response, and settlements at low costs.
Clearing Members (CMs) are the members of the Clearing Houses/Clearing Corporations who facilitate settlement of trades done on stock exchanges. They could be a broker or custodian registered with SEBI as such is an important intermediary in the capital market and an essential link in the depository system. The various categories of CMs are:
Trading Members
Custodians
Subsidiary companies formed by regional stock exchanges to facilitate their members to trade on BSE/NSE.
While beneficial owners may have their demat accounts on any of both the depositories it is mandatory on the part of CM to have a demat CM account with both the depositories in terms of SEBI press release ref. no. PR 153/99 dated July9,1999.
CM's main activity is to facilitate pay-in/pay-out of securities to/from Stock Exchanges/Clearing House/Clearing Corporations either on their own behalf or on behalf of their clients. The securities which are due for delivery can be delivered directly from client's account (depending on whether exchange provides this facility) or through CMs to the Stock Exchanges/Clearing House/Clearing Corporations Account. Similarly, pay-out of securities can be delivered directly to client's account on the basis of information given to Clearing House by the CMs or to CMs A/c.
Compulsory settlement of trades in demat, introduction of 'T+2' rolling settlement, higher volume of securities traded daily requires monitoring of CMs demat account on continuous basis. In order to facilitate smooth functioning for CMs CDSL has introduced a special Depository Participant Type i.e. CM DP. Members of the Stock Exchange, Mumbai and Calcutta Stock Exchange who have participated in the equity of CDSL can register as CM DP at concessional rate of deposit.
A CDSL CM DP can derive the following benefits:
He can continuously monitor the deliveries received for pay-in or from pay-out, their movement and subsequent reconciliation of trade settlements very easily.
Can subsequently reduce cost of his operations for himself as well as for his clients.
By offering one stop services to clients both in respect of trading and depository services, not only he increases his business but can effectively monitor client a/c position and insulate from failure in settlement.
