CDSL Full Form
CDSL Full Form-What is CDSL? CDSL is the first listed Indian central securities depository based in Mumbai. Central Depository Services Limited was initially promoted by the BSE Ltd. which thereafter divested its stake to leading banks.
CDSL Full Form
|Central Depository Services Limited|
What is CDSL?
Central Depository Services Limited, is the first listed Indian central securities depository based in Mumbai. Central Depository Services Limited was initially promoted by the BSE Ltd. which thereafter divested its stake to leading banks CDSL has an excellent retail distribution network. Besides the eight domestic major banks, it has an equally strong network of foreign banks as also foreign branches and subsidiaries of Indian banks and foreign banks with offices in India. CDSL caters to customers in cities with population greater than one million and also in Tier II and III cities and towns. It provides state-of-the-art computerised system for transmitting trade data (notified under Listing Standards of SEBI) from depository participants to CDSL.
What are the benefits of CDSL?
Central Depository Services Limited allows the shareholders to trade directly with one another without having to travel to a stock exchange or dealing with brokers and bank branches. The depository provides trading venues for equity shares and all other equity derivative contracts (equity futures, equity options and equity forwards) on various stock exchanges across the country.
What are the risks of CDSL?
The private entities are not part of India’s stock market regulatory regime, the Centre for Efficiency and Transparency in government Services, and Central Depository Services. Therefore, these entities are liable to be regulated only by the existing stock exchanges. A rapid increase in shareholding by non-NSE entities through secondary market trades is expected to result in a decline in the valuation of the depository, as a result of which stockholders can lose money in the event of a default. This also raises questions on the prudent use of capital and liquidity in the market. The interest rate on the Depository Interest rate on Depository Receipts (DISR) is paid at 12.25% to the issuer in three equal annual installments.
How are trade confirmations handled at CDSL?
Depository on average processing about 60,000 trades on an average per day. This number is growing as the BSE is closing an average of 1000 trades per day. CDSL also has a broad set of alternative settlement mechanisms. The trade confirmations of the depository go through seven days of counting. About 60% of the trade confirmations are done in 3 working days. What is the money trading facility? CDSL provides both INR cash and INR futures settlement to its clients. Depository of INR securities is optional for investors and customers. Many of the depository clients are not very active on futures trade and choose INR cash settlement instead.
CSDL’s IPO is a positive one for its investors as the company is likely to raise around Rs 1,750 crore, which would help it provide benefit to its investors.
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