In the depository system, companies who wish to admit their shares and securities into the system should obtain electronic connectivity with CDSL or avail the services of a registrar and transfer agents (RTA), for connectivity. CDSL functions as the central accounting and record keeping office in respect of the securities admitted by these companies.

CDSL's system is based on centralised database architecture with on-line connectivity with RTAs. Because of this centralisation, the cost for setting up RTA connectivity is significantly less without compromising in any manner on security and safety of the system. RTAs also need not incur high recurring costs in terms of maintaining back-ups and the related data storage. These advantages provide the wherewithal to RTAs to offer services to issuer companies at a significantly lower cost. The centralised architecture also allows the RTAs to provide the companies with a to-the-minute status of the holdings of their shareholders.

All leading RTAs are currently connected to CDSL and are providing services to a number of companies across the country. A company can also obtain direct in-house connectivity with CDSL, the procedure and the cost for doing so is similar to that of a RTA.

SEBI, vide its circular dated 27-12-2002, has advised issuers that "all the work related to share registry in terms of both physical and electronic should be maintained at a single point i.e either in-house by the company or by a SEBI registered R & T Agent".