Skip to main content

QUALIFIED DEPOSITORY PARTICIPANTS

Image
By

Eligibility Criteria: To become a qualified Depository Participant, a SEBI registered DP shall furnish the following:

(i) DP shall have net worth of Rs. 50 Crores or more.

(ii) DP shall be either a clearing bank or clearing member of any of the clearing corporations;

(iii) DP shall demonstrate that it has systems and procedures to comply with Standards, Prevention of Money Laundering (PML)Act, Rules and SEBI Circulars from time to time.

(iv) DP shall obtain prior approval of SEBI before commencing the activities relating to Qualified Foreign Investor. 

Role & Responsibilities of QDP:

■ Comply with the Laws, Rules and Regulations of jurisdictions;

■ In case of any violations by QFI a qualified DP is obliged to bring such instances to the notice of concerned depository and SEBI.

■ QDP shall not perform any acts or deeds with regard to QFI that puts any of his other clients to an disadvantageous position. QDP shall deal with its QFI clients in a fair and impartial manner.

■ QDP shall obtain appropriate declarations/undertakings as prescribed by depositories from time to time. 

■ QDP shall report QFI holdings in the format prescribed by the depositories from time to time.

■ QDP will route the order of QFI to the broker only after checking applicable limits.  

Responsibility on QDP with respect to the regulator:

■ Each day QDP should provide QFI wise, ISIN wise and company wise buy/ sell information and any other transaction or any related information to their respective depositories as per time lines stipulated by depositories. 

■ Notify information of any penalty, pending litigations or proceedings, findings of inspections or investigations for which action may have been taken or is in the process of being taken by an overseas regulator against QDP / QFI forthwith, to the attention of SEBI, depositories and stock exchanges.  

Concern need to be taken by QDP while registering a QFI:

(i) QDP shall ensure that only those entities are allowed to open Demat account as QFI whose ultimate beneficial ownership is not resident in India.

(ii) Entities having opaque structure such that the details of ultimate beneficiary are not accessible or where the beneficial owners are ring fenced from each other or where the beneficial owners are ring fenced with regard to enforcement shall not be allowed to open Demat account as QFI.

(iii) In case of any direct/ indirect change in structure or beneficial ownership of the QFI, the QFI shall bring the same to the notice of its QDP forthwith. The QDP shall assess the eligibility of that QFI afresh, before allowing it to undertake any further transactions.

(iv) QDP shall open a Demat account for QFI only after ensuring compliance with the requirements as per PML Act, rules and regulations, Financial Action Task Force (FATF) Standards and SEBI circulars and shall also ensure that QFI comply with these requirements on an ongoing basis;

(v) QDP shall at all times ensure compliance with laws, rules and regulations. 

Undertakings that QDP’s need to obtain from the QFI’s:

(i) QFI does not hold any other Demat account in any capacity whatsoever in India.

(ii) The ultimate beneficial ownership is not a person resident in India.

(iii) QFI to transact only through one bank account.

(iv) QFI to furnish on an ongoing basis, details of any penalties, litigations or proceedings, findings of inspection or investigation by any overseas regulator.

(v) At all times, QFI shall in relation to their activities as QFI in India, be subject to Indian Laws, rules and regulations, circulars as applicable from time to time.

(vi) Authorize the QDP to furnish such QFI information as may be required by any of the Indian Regulators from time to time.

Comments

Post a Comment

Popular posts from this blog

BANKING BACKGROUND AND ITS GROWTH:

By
BANKING BACKGROUND AND ITS GROWTH For having a healthy economy there has to be a sound and effective banking system. The banking system of India should be able to meet new challenges posed by the technology and any other internal and external factors. For the past three decades several significant achievements have been observed in Indian banking system especially towards credit facilities. In fact, Indian banking system has reached gradually to remote places of the country also. The government’s regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks in India. The first bank in India (although conservative/rigid) was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct stages. Stage-I:  Early phase from 1786 to 1969 of Indian Banks. Stage-II: Nationalization of Indian Banks and unto 1991 prior to Indian banking sector reforms. Stage-III:   New ...
3 comments
Read more

MORTGAGE BACKED SECURITIES

By
Mortgage – backed securities (MBS) are bonds secured by home and other real estate loans. They are created when a number of these loans, usually with similar characteristics, are pooled together. These securities assure a fixed return which is derived from the performance of the specific assets. They are issued with a maturity period of 3 to 10 years and backed by pooled assets like mortgages, credit card receivables, etc.  Example: A bank offering home loan might round up Rs.20 crore worth of such loans. That pool is then sold to a Government Agency or a government sponsored – enterprise (GSE), or to others to be used as the collateral for the new MBS.  Features of assets to be securitized: The assets to be securitized shall have the following features:- (a) The cash flows generated from the assets should be received periodically in accordance with a Pre – determined schedule. (b) The actual cash flows generated from the assets should be predictable. (...
Post a Comment
Read more

HEDGE FUNDS

By
Hedge means Fence, Barrier & Hurdle (other meaning – Protection & Security). In other words, it is a process of reducing and controlling future risk by taking some steps in advance.  Hedge fund refers to an alternative investment vehicle that is designed to protect investment portfolios from market uncertainty, while generating positive returns in both up and down markets. Hedge funds are unregistered private investment partnerships, funds or pools that may invest and trade in many different markets, strategies and instruments (including securities, non – securities and derivatives) to provide certain periodic and standardized pricing and valuation information to investors.  In short, it is an alternative investment that is designed to protect the Capital (investment amount) of an investor from market uncertainty and generate positive returns from the market fluctuations.  What is Hedging Concept?  Case Study: STEEL INDUSTRY  Facts: An...
Post a Comment
Read more