Depository Participants (DP) can simply be called agents of the depository, usually, depository participants are also stockbrokers. If a new investor intends to open a Demat account it can only be done through a depository participant.
The common worry in the mind of investors and traders is the safety of their financial assets and transactions. Depository participants play a very important role in helping investors transact smoothly in the stock market.
So what do depository participants actually do? How do they help the investors? And many such related questions will be answered in this article.
Let’s get started!
If you don’t know what a Demat account is, check out this article to learn every small detail about it.
Content:
- What does Depository Participant mean?
- Who is a Depository?
- What are the other services provided by depository participants?
- Difference between depository and depository participant.
- Best depository participant in India.
- How to open a Demat account with Alice Blue?
- Quick Summary
Depository Participant Meaning
Depository Participants (DP) can simply be called agents of the depository, usually, depository participants are also stockbrokers. If a new investor intends to open a Demat account it can only be done through a depository participant.
Depository Participant is the link between investors and the depository, before going any further onto this topic let us understand what depositories are and how DPs link them with the investors.
Who is a Depository?
A depository provides a Demat account where the financial securities are held in an electronic form. In simple words, depositories are like banks that keep shares or any other financial securities of the account holder.
The Demat account services are provided by depositories to the investors through Depository Participants(DPs)/Stock Brokers.
To access the stocks listed in the stock market, you need a trading account. But if you want to hold the stocks for more than 2 days, you need a Demat account. So this is how the Depository Participants/Stock Brokers act as a link between investors and depositories.
Earlier every stockbroker didn’t provide the facility to open a Demat account. But currently, most of the stockbrokers provide Demat account services, Alice blue being one among them.
There are two main depositories in India, NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited), to understand the Difference between NSDL and CDSL – Check out our blog.
Other Services Provided by Depository Participants
- By opening the Demat account with a Depository Participant, clients can avail services of depository like dematerialization and rematerialization of shares.
- DPs facilitate the settlement of trades.
- Transaction of the securities in the Demat account.
- They also allow pledging and un pledging of securities for a loan.
Learn about the Depository Charges here.
Difference Between Depository Participant and Depository
| Depository | Depository Participant (DP) | |
| Definition | The depositories are institutions that provide Demat account services where the shares are stored electronically. | Depository participants are the intermediaries between the investors/traders and the depository. |
| Types | There are two main depositories in India: NSDL (National Securities Depository Limited)CDSL (Central Depository Services Limited) | Any organization or institution that fulfills the guidelines of SEBI is registered under the depositories as Depository Participants. The list of registered DPs are available on the NSDL and CDSL websites. |
| Client Interaction | Depositories don’t directly interact with the clients. | Depository Participants interact with the clients directly. |
| Account Feature | One cannot directly open a Demat account with the depository. | Demat accounts can only be opened through a depository participant. |
Best Depository Participant in India
Alice Blue is one of the best stockbrokers and a registered depository participant (under CDSL). Alice Blue has over a decade of experience in the stockbroking industry and has over 3,00,000 clients nationwide.
Opening a Demat account with Alice Blue has many added advantages:
- Brokerage Plans: We offer two brokerage plans, Trade Pro Plan and Freedom 20 Plan to provide the clients flexibility to choose.
- We are one of the few stockbrokers that provide a single margin for both equity trading and commodity trading.
- Trading Platforms: Our trading platforms are easy to use with advanced and interactive features. We provide the trading platform via desktop, web, and mobile applications.
How to Open a Demat account with Alice Blue in Just 15 Minutes
If your Mobile no is linked with Aadhar, you can open the Trading & Demat Account online.
Follow the simple process given below:
- First, visit our website and click on Open an Account.
- Fill in your Name, Email, Mobile Number, and State and click on Open an Account.
- Upload account opening documents.
- Provide an IPV (In-person verification) by showing your PAN towards the camera along with your face.
- E-sign the documents by verifying your Aadhaar with Mobile Number.
- Your account will be activated within 24 hours.
Want to know more about how to open an account with Alice Blue – Check out our blog.
We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, and hence we bring you the important topics and areas that you should know:
Quick Summary
- The common worry in the mind of investors and traders is the safety of their financial assets and transactions. Depository participants play a very important role in helping investors transact smoothly in the stock market.
- Depository Participants (DP) can simply be called agents of the depository, usually, depository participants are also stockbrokers. If a new investor intends to open a Demat account it can only be done through a depository participant.
- A depository provides a Demat account where the financial securities are held in an electronic form. In simple words, depositories are like banks that keep shares or any other financial securities of the account holder.
- The Demat account services are provided by depositories to the investors through Depository Participants(DPs)/Stock Brokers. They also facilitate the settlement of trades and transactions of the securities in the Demat account. They also allow pledging and un pledging of securities for a loan.
- Alice Blue is one of the best stockbrokers and a registered depository participant (under CDSL). Alice Blue has over a decade of experience in the stockbroking industry and has more than 3,50,000 clients nationwide.
