depositories
Depositories Act, 1996
[22 of 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
Preliminary
Short title, extent and commencement.
1. (1) This
Act may be called the Depositories Act, 1996.
(2) It extends to the whole of
(3) It shall be deemed to have come into force on the 20th day of
September, 1995.
2. (1) In
this Act, unless the context otherwise requires, —
(a) “beneficial owner” means a person whose name is recorded as such
with a depository;
(b) “Board” means the Securities and
Exchange Board of India established under section 3 of the Securities and
Exchange Board of India Act, 1992 (15 of 1992);
(c) “bye-laws”
means bye-laws made by a depository under section 26;
(d) “Company Law Board” means the Board of
Company Law Administration constituted under section 10E of the Companies Act,
1956 (1 of 1956);
(e) “depository”
means a company formed and registered under the Companies Act, 1956 (1 of
1956), and which has been granted a certificate of registration under
sub-section (1A) of section 12 of the Securities and Exchange Board of India
Act, 1992 (15 of 1992);
(f) “issuer” means any person making an issue of securities;
(g) “participant” means a person registered
as such under sub-section (1A) of section 12 of the Securities and Exchange
Board of India Act, 1992 (15 of 1992);
(h) “prescribed” means prescribed by rules made under this Act;
(i) “record” includes the records maintained in the form of books
or stored in a computer or in such other form as may be determined by
regulations;
(j) “registered
owner” means a depository whose name is entered as such in the register of the
issuer;
(k) “regulations” means the regulations made by the Board;
[(ka) “Securities Appellate Tribunal” means a
Securities Appellate Tribunal established under sub-section (1) of section 15K
of the Securities and Exchange Board of India Act, 1992 (15 of 1992);]
(l) “security” means such security as may be specified by the
Board;
(m) “service” means
any service connected with recording of allotment of securities or transfer of
ownership of securities in the record of a depository.
(2) Words and expressions used herein and not defined but defined
in the Companies Act, 1956 (1 of 1956), or the Securities Contracts
(Regulation) Act, 1956 (42 of 1956), or the Securities and Exchange Board of
India Act, 1992 (15 of 1992), shall have the meanings respectively assigned to
them in those Acts.
Certificate of Commencement of Business
3. Certificate of commencement of business by
depositories.
(1) No depository shall act as a depository unless it obtains a
certificate of commencement of business from the Board.
(2) A certificate granted under sub-section (1) shall be in such
form as may be specified by the regulations.
(3) The Board shall not grant a certificate under sub-section (1)
unless it is satisfied that the depository has adequate systems and safeguards
to prevent manipulation of records and transactions :
Provided that no certificate shall be refused under this section unless the
depository concerned has been given a reasonable opportunity of being heard.
Rights and
obligations of depositories, participants,
issuers and beneficial owners
4. Agreement
between depository and participant.
(1) A
depository shall enter into an agreement with one or more participants as its
agent.
(2) Every agreement under sub-section (1) shall be in such form
as may be specified by the bye-laws.
5. Services of depository.
Any person,
through a participant, may enter into an agreement, in such form as may be
specified by the bye-laws, with any depository for availing its services.
6. Surrender of certificate of security.
(1) Any person who has entered into an agreement under section 5
shall surrender the certificate of security, for which he seeks to avail the
services of a depository, to the issuer in such manner as may be specified by
the regulations.
(2) The issuer, on receipt of certificate of security under
sub-section (1), shall cancel the certificate of security and substitute in its
records the name of the depository as a registered owner in respect of that
security and inform the depository accordingly.
(3) A depository shall, on receipt of information under
sub-section (2), enter the name of the person referred to in sub-section (1) in
its records, as the beneficial owner.
7. Registration of transfer of securities
with depository.
(1) Every depository shall, on receipt of intimation from a participant,
register the transfer of security in the name of the transferee.
(2) If a beneficial owner or a transferee of any security seeks
to have custody of such security the depository shall inform the issuer
accordingly.
8. Options to receive security
certificate or hold securities with depository.
(1) Every
person subscribing to securities offered by an issuer shall have the option
either to receive the security certificates or hold securities with a
depository.
(2) Where a person opts to hold a security with a depository, the
issuer shall intimate such depository the details of allotment of the security,
and on receipt of such information the depository shall enter in its records
the name of the allottee as the beneficial owner of
that security.
9. Securities
in depositories to be in fungible form.
(1) All
securities held by a depository shall be dematerialised
and shall be in a fungible form.
[(2) Nothing contained in sections 153, 153A, 153B, 187B, 187C and 372
of the Companies Act, 1956 (1 of 1956), shall apply to a depository in respect
of securities held by it on behalf of the beneficial owners.]
10. Rights of depositories and beneficial
owner.
(1) Notwithstanding anything contained in any other law for the
time being in force, a depository shall be deemed to be the registered owner
for the purposes of effecting transfer of ownership of security on behalf of a
beneficial owner.
(2) Save as otherwise provided in sub-section (1), the depository
as a registered owner shall not have any voting rights or any other rights in
respect of securities held by it.
(3) The beneficial owner shall be entitled to all the rights and
benefits and be subjected to all the liabilities in respect of his securities
held by a depository.
11. Register of beneficial owner.
Every
depository shall maintain a register and an index of beneficial owners in the
manner provided in sections 150, 151 and 152 of the Companies Act, 1956 (1 of
1956).
12. Pledge or hypothecation of securities
held in a depository.
(1) Subject
to such regulations and bye-laws, as may be made in this behalf, a beneficial
owner may with the previous approval of the depository create a pledge or
hypothecation in respect of a security owned by him through a depository.
(2) Every beneficial owner shall give intimation of such pledge
or hypothecation to the depository and such depository shall thereupon make
entries in its records accordingly.
(3) Any entry in the records of a depository under sub-section
(2) shall be evidence of a pledge or hypothecation.
13. Furnishing of information and records by
depository and issuer.
(1) Every depository shall furnish to the issuer information
about the transfer of securities in the name of beneficial owners at such
intervals and in such manner as may be specified by the bye-laws.
(2) Every issuer shall make available to the depository copies of
the relevant records in respect of securities held by such depository.
14. Option to opt out in respect of any
security.
(1) If a beneficial owner seeks to opt out of a depository in
respect of any security he shall inform the depository accordingly.
(2) The depository shall on receipt of intimation under
sub-section (1) make appropriate entries in its records and shall inform the
issuer.
(3) Every issuer shall, within thirty days of the receipt of
intimation from the depository and on fulfilment of
such conditions and on payment of such fees as may be specified by the
regulations, issue the certificate of securities to the beneficial owner or the
transferee, as the case may be.
15. Act 18 of 1891 to apply to depositories.
The
Bankers’ Books Evidence Act, 1891 shall apply in relation to a depository as if
it were a bank as defined in section 2 of that Act.
16. Depositories to indemnify loss in certain
cases.
(1) Without prejudice to the provisions of any other law for the
time being in force, any loss caused to the beneficial owner due to the
negligence of the depository or the participant, the depository shall indemnify
such beneficial owner.
(2) Where the loss due to the negligence of the participant under
sub-section (1) is indemnified by the depository, the depository shall have the
right to recover the same from such participant.
17. Rights and
obligations of depositories, etc.
(1) Subject to the provisions of this Act, the rights and
obligations of the depositories, participants and the issuers whose securities
are dealt with by a depository shall be specified by the regulations.
(2) The eligibility criteria for admission of securities into the
depository shall be specified by the regulations.
ENQUIRY AND
INSPECTION
18. Power
of Board to call for information and enquiry.
(1) The Board, on being
satisfied that it is necessary in the public interest or in the interest of
investors so to do, may, by order in writing,—
(a) call upon any issuer, depository,
participant or beneficial owner to furnish in writing such information relating
to the securities held in a depository as it may require; or
(b) authorise
any person to make an enquiry or inspection in relation to the affairs of the
issuer, beneficial owner, depository or participant, who shall submit a report
of such enquiry or inspection to it within such period as may be specified in
the order.
(2) Every director, manager, partner, secretary, officer or employee of the depository or issuer or the participant or beneficial owner shall on demand produce before the person making the enquiry or inspection all information or such records and other documents in his custody having a bearing on the subject-matter of such enquiry or inspection.
19. Power of Board to give directions in
certain cases.
Save as provided in this Act, if after making
or causing to be made an enquiry or inspection, the Board is satisfied that it
is necessary—
(i) in the interest of investors, or orderly development of
securities market; or
(ii) to prevent the affairs of any depository or participant
being conducted in the manner detrimental to the interests of investors or
securities market,it may issue such directions,—
(a) to any depository or participant or any person associated
with the securities market; or
(b) to any issuer, as may be appropriate in the interest of
investors or the securities market.
19A. [Penalty for failure
to furnish information, return, etc.
Any person, who is required under this Act or
any rules or regulations or bye-laws made thereunder,—
(a) to furnish any information, document,
books, returns or report to the Board, fails to furnish the same within the
time specified therefor, he shall be liable to a
penalty of one lakh rupees for each day during which
such failure continues or one crore rupees, whichever
is less for each such failure;
(b) to file any return or furnish any
information, books or other documents within the time specified therefor in the regulations or bye-laws, fails to file
return or furnish the same within the time specified therefor,
he shall be liable to a penalty of one lakh rupees
for each day during which such failure continues or one crore
rupees, whichever is less;
(c) to maintain
books of account or records, fails to maintain the same, he shall be liable to
a penalty of one lakh rupees for each day during
which such failure continues or one crore rupees,
whichever is less.
19B. Penalty for
failure to enter into an agreement.
If a
depository or participant or any issuer or its agent or any person, who is
registered as an intermediary under the provisions of section 12 of the Securities
and Exchange Board of India Act, 1992 (15 of 1992), and is required under this
Act or any rules or regulations made thereunder, to
enter into an agreement, fails to enter into such agreement, such depository or
participant or issuer or its agent or intermediary shall be liable to a penalty
of one lakh rupees for each day during which such
failure continues or one crore rupees, whichever is
less for every such failure.
19C. Penalty for
failure to redress investors’ grievances.
If any
depository or participant or any issuer or its agent or any person, who is
registered as an intermediary under the provisions of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), after having
been called upon by the Board in writing, to redress the grievances of the
investors, fails to redress such grievances within the time specified by the
Board, such depository or participant or issuer or its agents or intermediary
shall be liable to a penalty of one lakh rupees for
each day during which such failure continues or one crore
rupees, whichever is less.
19D. Penalty for delay
in dematerialisation or issue of certificate of securities.
If any
issuer or its agent or any person, who is registered as an intermediary under
the provisions of section 12 of the Securities and Exchange Board of India Act,
1992 (15 of 1992), fails to dematerialise or issue
the certificate of securities on opting out of a depository by the investors,
within the time specified under this Act or regulations or bye-laws made thereunder or abets in delaying the process of
dematerialisation or issue the certificate of securities on opting out of a
depository of securities, such issuer or its agent or intermediary shall be
liable to a penalty of one lakh rupees for each day
during which such failure continues or one crore
rupees, whichever is less.
19E. Penalty for
failure to reconcile records.
If a
depository or participant or any issuer or its agent or any person, who is
registered as an intermediary under the provisions of section 12 of the
Securities and Exchange Board of India Act, 1992 (15 of 1992), fails to
reconcile the records of dematerialised securities
with all the securities issued by the issuer as specified in the regulations,
such depository or participant or issuer or its agent or intermediary shall be
liable to a penalty of one lakh rupees for each day
during which such failure continues or one crore
rupees, whichever is less.
19F. Penalty for failure to comply
with directions issued by Board under section 19 of the Act.
If any
person fails to comply with the directions issued by the Board under section
19, within the time specified by it, he shall be liable to a penalty of one lakh rupees for each day during which such failure
continues or one crore rupees, whichever is less.
19G. Penalty for contravention where no
separate penalty has been provided.
Whoever
fails to comply with any provision of this Act, the rules or the regulations or
bye-laws made or directions issued by the Board thereunder
for which no separate penalty has been provided, shall be liable to a penalty
which may extend to one crore rupees.
19H. Power
to adjudicate.
(1) For
the purpose of adjudging under sections 19A, 19B, 19C, 19D, 19E, 19F and 19G,
the Board shall appoint any officer not below the rank of a Division Chief of
the Securities and Exchange Board of India to be an adjudicating officer for
holding an inquiry in the prescribed manner after giving any person concerned a
reasonable opportunity of being heard for the purpose of imposing any penalty.
(2) While holding an inquiry, the adjudicating officer shall have
power to summon and enforce the attendance of any person acquainted with the
facts and circumstances of the case to give evidence or to produce any
document, which in the opinion of the adjudicating officer, may be useful for
or relevant to the subject-matter of the inquiry and if, on such inquiry, he is
satisfied that the person has failed to comply with the provisions of any of
the sections specified in sub-section (1), he may impose such penalty as he
thinks fit in accordance with the provisions of any of those sections.
19-I. Factors to be taken into account by adjudicating officer.
While
adjudging the quantum of penalty under section 19H, the adjudicating officer shall
have due regard to the following factors, namely:—
(a) the amount of disproportionate gain or
unfair advantage, wherever quantifiable, made as a result of the default;
(b) the amount of loss
caused to an investor or group of investors as a result of the default;
(c) the repetitive
nature of the default.
19J. Crediting sums realised by way of
penalties to Consolidated Fund of
All sums realised by
way of penalties under this Act shall be credited to the Consolidated Fund of
India.]
Penalty
20. [Offences.
(1) Without prejudice to any award of penalty by the adjudicating
officer under this Act, if any person contravenes or attempts to contravene or
abets the contravention of the provisions of this Act or of any rules or
regulations or bye-laws made thereunder, he shall be
punishable with imprisonment for a term which may extend to ten years, or with
fine, which may extend to twenty-five crore rupees,
or with both.
(2) If any person fails to pay the penalty imposed by the
adjudicating officer or fails to comply with any of his directions or orders,
he shall be punishable with imprisonment for a term which shall not be less
than one month but which may extend to ten years, or with fine, which may
extend to twenty-five crore rupees, or with both.]
(1) Where
an offence under this Act has been committed by a company, every person who at
the time the offence was committed was in charge of, and was responsible to,
the company for the conduct of the business of the company, as well as the
company, shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall render any such person
liable to any punishment provided in this Act, if he proves that the offence
was committed without his knowledge or that he had exercised all due diligence
to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where
an offence under this Act has been committed by a company and it is proved that
the offence has been committed with the consent or connivance of, or is
attributable to any neglect on the part of, any director, manager, secretary or
other officer of the company, such director, manager, secretary or other
officer shall also be deemed to be guilty of the offence and shall be liable to
be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means
any body corporate and includes a firm or other association of individuals; and
(b) “director”, in
relation to a firm, means a partner in the firm.
Miscellaneous
22.[Cognizance
of offences by courts.
(1) No
court shall take cognizance of any offence punishable under this Act or any
rules or regulations or bye-laws made thereunder,
save on a complaint made by the Central Government or State Government or the
Securities and Exchange Board of India or by any person.
(2) No court inferior to that of a Court of Session shall try any
offence punishable under this Act.
22A. Composition of certain offences.
Notwithstanding
anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), any
offence punishable under this Act, not being an offence punishable with
imprisonment only, or with imprisonment and also with fine, may either before
or after the institution of any proceeding, be compounded by a Securities
Appellate Tribunal or a court before which such proceedings are pending.
(1) The Central Government may, on recommendation by the Board,
if the Central Government is satisfied, that any person, who is alleged to have
violated any of the provisions of this Act or the rules or the regulations made
thereunder, has made a full and true disclosure in
respect of alleged violation, grant to such person, subject to such conditions
as it may think fit to impose, immunity from prosecution for any offence under
this Act, or the rules or the regulations made thereunder
or also from the imposition of any penalty under this Act with respect to the
alleged violation :
Provided that no such immunity shall be granted by the Central Government in
cases where the proceedings for the prosecution for any such offence have been
instituted before the date of receipt of application for grant of such
immunity:
Provided further that recommendation of the Board under this
sub-section shall not be binding upon the Central Government.
(2) An immunity granted to a person under sub-section (1) may, at
any time, be withdrawn by the Central Government, if it is satisfied that such
person had, in the course of the proceedings, not complied with the condition
on which the immunity was granted or had given false evidence, and thereupon
such person may be tried for the offence with respect to which the immunity was
granted or for any other offence of which he appears to have been guilty in
connection with the contravention and shall also become liable to the
imposition of any penalty under this Act to which such person would have been
liable, had not such immunity been granted.]
23.Appeals.
(1) Any
person aggrieved by an order of the Board made [before the commencement of the
Securities Laws (Second Amendment) Act, 1999] under this Act, or the
regulations made thereunder may prefer an appeal to
the Central Government within such time as may be prescribed.
(2) No appeal shall be admitted if it is preferred after the
expiry of the period prescribed therefor :
Provided that an appeal may be admitted after the expiry of the period
prescribed therefor if the appellant satisfies the
Central Government that he had sufficient cause for not preferring the appeal
within the prescribed period.
(3) Every appeal made under this section shall be made in such
form and shall be accompanied by a copy of the order appealed against and by
such fees as may be prescribed.
(4) The procedure for disposing of an appeal shall be such as may
be prescribed:
Provided that before disposing of an appeal, the appellant shall be given a
reasonable opportunity of being heard.
23A. [Appeal to Securities
Appellate Tribunal.
(1) Save as provided in sub-section (2), any person aggrieved by
an order of the Board made, on and after the commencement of the Securities
Laws (Second Amendment) Act, 1999, under this Act, or the regulations made thereunder, [or by an order made by an adjudicating
officer under this Act] may prefer an appeal to a Securities Appellate
Tribunal having jurisdiction in the matter.
(2) No appeal shall lie to the Securities Appellate Tribunal from
an order made by the Board with the consent of the parties.
(3) Every appeal under sub-section (1) shall be filed within a period
of forty-five days from the date on which a copy of the order made by the Board
is received by the person referred to in sub-section (1) and it shall be in
such form and be accompanied by such fee as may be prescribed:
Provided that the Securities Appellate Tribunal may entertain an appeal after
the expiry of the said period of forty-five days if it is satisfied that there
was sufficient cause for not filing it within that period.
(4) On receipt of an appeal under sub-section (1), the Securities
Appellate Tribunal may, after giving the parties to the appeal an opportunity
of being heard, pass such orders thereon as it thinks fit, confirming,
modifying or setting aside the order appealed against.
(5) The Securities Appellate Tribunal shall send a copy of every
order made by it to the Board and parties to the appeal.
(6) The appeal filed before the Securities Appellate Tribunal
under sub-section (1) shall be dealt with by it as expeditiously as possible
and endeavour shall be made by it to dispose of the
appeal finally within six months from the date of receipt of the appeal.
23B. Procedure and powers of Securities Appellate Tribunal.
(1) The
Securities Appellate Tribunal shall not be bound by the procedure laid down by
the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the
principles of natural justice and, subject to the other provisions of this Act
and of any rules, the Securities Appellate Tribunal shall have powers to
regulate their own procedure including the places at which they shall have
their sittings.
(2) The Securities Appellate Tribunal shall have, for the purpose
of discharging their functions under this Act, the same powers as are vested in
a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying
a suit, in respect of the following matters, namely :—
(a) summoning and enforcing the attendance of any person and
examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or
documents;
(e) reviewing its decisions;
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside
any order of dismissal of any application for default or any order passed by it
ex parte; and
(h) any other matter which may be prescribed.
(3) Every proceeding before
the Securities Appellate Tribunal shall be deemed to be a judicial proceeding
within the meaning of sections 193 and 228, and for the purposes of section 196
of the Indian Penal Code (45 of 1860) and the Securities Appellate Tribunal
shall be deemed to be a civil court for all the purposes of section 195 and
Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
23C. Right to legal representation.
The appellant
may either appear in person or authorise one or more
chartered accountants or company secretaries or cost accountants or legal
practitioners or any of its officers to present his or its case before the
Securities Appellate Tribunal.
Explanation.—For the purposes of this section,—
(a) “chartered accountant” means a chartered
accountant as defined in clause (b) of sub-section (1) of section 2 of the
Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate
of practice under sub-section (1) of section 6 of that Act;
(b) “company
secretary” means a company secretary as defined in clause (c) of sub-section
(1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who has
obtained a certificate of practice under sub-section (1) of section 6 of that
Act;
(c) “cost accountant” means a cost
accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost
and Works Accountants Act, 1959 (23 of 1959) and who has obtained a certificate
of practice under sub-section (1) of section 6 of that Act;
(d) “legal
practitioner” means an advocate, vakil or an attorney
of any High Court, and includes a pleader in practice.
The
provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply
to an appeal made to a Securities Appellate Tribunal.
23E. Civil court not to have
jurisdiction.
No
civil court shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Securities Appellate Tribunal is empowered by or
under this Act to determine and no injunction shall be granted by any court or
other authority in respect of any action taken or to be taken in pursuance of
any power conferred by or under this Act.
23F. [Appeal to Supreme
Court.
Any person
aggrieved by any decision or order of the Securities Appellate Tribunal may
file an appeal to the Supreme Court within sixty days from the date of
communication of the decision or order of the Securities Appellate Tribunal to
him on any question of law arising out of such order :
Provided that the Supreme Court may, if it is satisfied that the appellant was
prevented by sufficient cause from filing the appeal within the said period,
allow it to be filed within a further period not exceeding sixty days.]]
24. Power of Central Government to make rules.
(1) The
Central Government may, by notification in the Official Gazette, make rules for
carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :—
[(a) the manner of inquiry under sub-section
(1) of section 19H;
(aa) the
time within which an appeal may be preferred under sub-section (1) of section
23;]
(b) the form in
which an appeal may be preferred under sub-section (3) of section 23 and the
fees payable in respect of such appeal ;
(c) the procedure for disposing of an appeal under sub-section
(4) of section 23;
[(d) the form in which an appeal may be filed
before the Securities Appellate Tribunal under section 23A and the fees payable
in respect of such appeal.]
25. Power of Board to make regulations.
(1) Without prejudice to the provisions contained in section 30
of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board
may, by notification in the Official Gazette, make regulations consistent with
the provisions of this Act and the rules made thereunder
to carry out the purposes of this Act.
(2) In particular, and
without prejudice to the generality of the foregoing power, such regulations
may provide for—
(a) the form in which record is to be maintained under clause (i) of sub-section (1) of section 2;
(b) the form in which
the certificate of commencement of business shall be issued under sub-section
(2) of section 3;
(c) the manner in
which the certificate of security shall be surrendered under sub-section (1) of
section 6;
(d) the manner of creating
a pledge or hypothecation in respect of security owned by a beneficial owner
under sub-section (1) of section 12;
(e) the conditions
and the fees payable with respect to the issue of certificate of securities
under sub-section (3) of section 14;
(f) the rights and
obligations of the depositories, participants and the issuers under sub-section
(1) of section 17;
(g) the eligibility
criteria for admission of securities into the depository under sub-section (2)
of section 17.
26. Power of depositories to make bye-laws.
(1) A depository shall, with the previous approval of the Board,
make bye-laws consistent with the provisions of this Act and the regulations.
(2) In particular, and without prejudice to the generality of the
foregoing power, such bye-laws shall provide for—
(a) the eligibility criteria for admission and removal of
securities in the depository;
(b) the conditions subject to which the securities shall be
dealt with;
(c) the eligibility criteria for admission of any person as a
participant;
(d) the manner and procedure for dematerialisation of
securities;
(e) the procedure for transactions within the depository;
(f) the manner in which securities shall be dealt with or
withdrawn from a depository;
(g) the procedure
for ensuring safeguards to protect the interests of participants and beneficial
owners;
(h) the conditions of admission into and withdrawal from a
participant by a beneficial owner;
(i) the procedure for conveying information to the participants
and beneficial owners on dividend declaration, shareholder meetings and other
matters of interest to the beneficial owners;
(j) the manner of
distribution of dividends, interest and monetary benefits received from the
company among beneficial owners;
(k) the manner of creating pledge or hypothecation in respect of
securities held with a depository;
(l) inter se
rights and obligations among the depository, issuer, participants, and
beneficial owners;
(m) the manner and the periodicity of furnishing information to
the Board, issuer and other persons;
(n) the procedure
for resolving disputes involving depository, issuer, company or a beneficial
owner;
(o) the procedure
for proceeding against the participant committing breach of the regulations and
provisions for suspension and expulsion of participants from the depository and
cancellation of agreements entered with the depository;
(p) the internal control standards including procedure for
auditing, reviewing and monitoring.
(3) Where the Board considers it expedient so to do, it may, by
order in writing, direct a depository to make any bye-laws or to amend or
revoke any bye-laws already made within such period as it may specify in this
behalf.
(4) If the depository fails or neglects to comply with such order
within the specified period, the Board may make the bye-laws or amend or revoke
the bye-laws made either in the form specified in the order or with such
modifications thereof as the Board thinks fit.
27. Rules and regulations to be laid before
Parliament.
Every
rule and every regulation made under this Act shall be laid, as soon as may be
after it is made, before each House of Parliament, while it is in session, for
a total period of thirty days which may be comprised in one session or in two
or more successive sessions, and if, before the expiry of the session
immediately following the session or the successive sessions aforesaid, both
Houses agree in making any modification in the rule or regulation or both
Houses agree that the rule or regulation should not be made, the rule or
regulation shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously
done under that rule or regulation.
28. Application of other laws not barred.
The
provisions of this Act shall be in addition to, and not in derogation of, any
other law for the time being in force relating to the holding and transfer of
securities.
29. Removal of difficulties.
(1) If any difficulty arises in giving effect to the provisions
of this Act, the Central Government may, by order published in the Official
Gazette, make such provisions not inconsistent with the provisions of this Act
as appear to it to be necessary or expedient for removing the difficulty :
Provided that no order shall be made under this
section after the expiry of a period of two years from the commencement of this
Act.
(2) Every order made under this section shall be laid, as soon as
may be after it is made, before each House of Parliament.
30. Amendments to certain enactments.
[Repealed by Repealing &
Amending Act, 2001].
31. Repeal and saving.
(1) The
Depositories (Third) Ordinance, 1996 (Ord. 28 of
1996), is hereby repealed.
(2) Notwithstanding such repeal, anything done or any action
taken under the said Ordinance shall be deemed to have been done or taken under
the corresponding provisions of this Act.