NSDL -BYELAWS -2000 CH-9 9. ACCOUNTS/TRANSACTIONS BY BOOK ENTRY 9.1. ACCOUNT OPENING 9.1.1. The Depository shall keep accounts separately in respect of each Participant. The Depository shall keep a record of each Client's account which shall be updated on a daily basis. 9.1.2. The Participant shall maintain separate accounts in respect of each Client and its own account. The Participant shall intimate the balances held in its own account and Client account to Depository on a daily basis. 9.1.3. Any prospective Client who wishes to avail the services of the Depository will have to open an account with the Depository through a Participant. 9.1.4. The Client will have to make an application for this purpose to the Participant in the format specified under the Business Rules 9.1.5. *The Client will be required to enter into an agreement with the Participant in accordance with the provisions of Chapter 6 of these Bye Laws. *(Amended w.e.f. March 6, 1997. Prior to this amendment, Bye Law 9.1.5 read as follows : 9.1.5. The Client will be required to enter into an agreement with the Participant as per the draft laid out in Annexure B of these Bye Laws.) 9.1.6. Once the application has been accepted by the Participant, the applicant will be issued a Client account number. 9.2. DEMATERIALISATION 9.2.1. Credit of securities into the Depository shall be made either on account of dematerialisation of physical securities or on the fresh issue of securities in the dematerialised form. 9.2.2. A Client may convert his physical holdings of securities into dematerialised form by making an application to the Participant in a Dematerialisation Request Form (hereinafter referred to as DRF) in the form prescribed under the Business Rules along with the relevant security certificates. 9.2.3. The Participant shall forward the DRF so received, along with the security certificates, to the Issuer or its Registrar & Transfer Agent after electronically registering such request with the Depository. Such DRF shall be forwarded by the Participant not later than seven days of accepting the same from its Client. 9.2.4. The Depository will electronically intimate, on a daily basis, all dematerialisation requests to the respective Issuer or its Registrar & Transfer Agent. 9.2.5. The Issuer or its Registrar & Transfer Agent shall verify the validity of the security certificates as well as the fact that the DRF has been made by the person recorded as a member in its Register of Members. 9.2.6. After verification as aforesaid, the Issuer or its Registrar & Transfer Agent shall intimate the Depository authorising an electronic credit for that security in favour of the Client. On receipt of such intimation, the Depository shall cause necessary credit entries to be made in the account of the Client concerned. 9.2.7. No credit of any securities to the accounts of any Client shall be made unless the Depository has received an intimation from the Issuer or its Registrar & Transfer Agent or its agents as set out in Bye Law 9.2.6 above. 9.2.8. Where the Issuer or its Registrar & Transfer Agent rejects any dematerialisation request, it shall electronically intimate the Depository regarding such rejection within a period of fifteen days. 9.2.9. On the Issuer or its Registrar & Transfer Agent intimating to the Depository in the manner specified in Bye Law 9.2.8 above, the Issuer or its Registrar & Transfer Agent shall return the DRF along with the relevant security certificates unless the reasons for such rejections are :- i) the security certificates are stolen or; ii) the security certificates are fake or; iii) in the event of an order from a court or a competent statutory authority prohibiting the transfer of such securities or; iv) in case duplicate certificates have been issued in respect of the securities with the same distinctive numbers. 9.2.10. In the event of an intimation being received by the Depository from Issuer or Registrar & Transfer Agent to credit the account of the Client with securities which do not match with the details of the Client or Participant, the balance shall be held in suspense account and shall be reconciled as provided in 9.7.1. 9.2.11. In the event of any person making a claim to the securities that are held in the name of the Client with the Depository after the same are so registered, such claim must be settled amongst the Participants, Clients and Issuer or its Registrar & Transfer Agent. 9.2.12. The Issuer or its Registrar & Transfer Agent giving intimation as set out in Bye Law 9.2.6 above, represents and warrants to the Depository that such securities exist and are validly issued and is entitled/or has full authority to transfer such securities with the Depository in the name of the Client. 9.2.13. *If a Client is desirous of dematerialising the shares sent for transfer, then it may do so as per the provisions of the Guidelines for dematerialisation of shares sent for transfer issued by the Securities and Exchange Board of India and in the manner laid out in the Business Rules. In such a case, for the purpose of Bye Laws 9.2.2 and 9.2.3 above, in lieu of security certificates the letter issued by the Issuer or its Registrar & Transfer Agent in accordance with the said guidelines shall be submitted by the Client to the Participant for forwarding it to the Issuer or its Registrar & Transfer Agent *(Inserted w.e.f. October 16, 1998) 9.3. ACCOUNT FREEZING 9.3.1. The Participant shall freeze the account of a Client maintained with him on written instructions received by the Participant in that regard from the Client concerned in the form specified under the Business Rules. 9.3.2. The Participant shall freeze the account of a Client on written instructions received by him in this regard from the Depository pursuant to the orders of the Central or State Government, Securities and Exchange Board of India or any order passed by the court, tribunal, or any statutory authority in this regard. Provided further that the frozen account shall be released on instructions from the Client in the case of Bye Law 9.3.1 above and the orders of the relevant authority in the case of Bye Law 9.3.2 above. 9.3.3. The Depository shall freeze the account of a Participant to the extent the securities are held in the Participants name :- i) on the orders of the Central or State Government or the Securities and Exchange Board of India or any court or tribunal or any statutory authority in this regard; ii) on the orders passed by the Disciplinary Action Committee on disciplinary grounds to that effect set out in Chapter 11 of the Bye Laws relating to Disciplinary Action; iii) if the Participant becomes insolvent, bankrupt or in case of a body corporate, being wound up. Provided further that the frozen account may be released on instructions of the relevant authority in the case of Bye Law 9.3.3 above. 9.4. REMATERIALISATION 9.4.1. A Client may withdraw its security balances with the Depository at any point of time by making an application to that effect to the Depository through its Participant. 9.4.2. A Participant holding its own securities in the Depository may withdraw its security balances with the Depository by making an application to that effect to the Depository. 9.4.3. The Client shall make the request for withdrawal of the balance in his account in the Rematerialisation Request Form (hereinafter referred to as RRF) as specified in the Business Rules. 9.4.4. On receipt of the RRF, the Participant shall check whether sufficient free relevant security balance is available in the account of the Client. If there is sufficient balance, the Participant shall accept the said RRF and block the balance of the Client to the extent of the rematerialisation quantity and electronically intimate the request to the Depository. 9.4.5. On receipt of the request referred to in Bye Law 9.4.4 above, the Depository shall block the balance of the Participant to the extent of rematerialisation quantity in Depository system. 9.4.6. The Depository will intimate electronically all such accepted rematerialisation applications to the Issuer or its Registrar & Transfer Agent on a daily basis. 9.4.7. The Participant shall forward the RRF to the Issuer or its Registrar and Transfer Agent within seven days of accepting such request from the Client. The Issuer or its Registrar & Transfer Agent after validating the RRF will confirm electronically to the Depository that the RRF has been accepted. Thereafter the Issuer or its Registrar and Transfer Agent shall despatch the share certificates arising out of the rematerialisation request within a period of thirty days from receipt of such Rematerialisation Request   Form. 9.4.8. On receipt of such acceptance from the Issuer or its Registrar and Transfer Agent, the Depository shall remove the balances from the respective Participant's account and the Participant shall remove the balance from the respective Client's account. 9.5. ACCOUNT CLOSURE 9.5.1. A Client wanting to close an account shall make an application, in the format specified to that effect in the Business Rules to the Participant. 9.5.2. The Client may close its account if no balances are standing to its credit in the account. In case any balances exist, then the account may be closed in the following manner :- i) by rematerialisation of all its existing balances in its account; and/or; ii) by transferring its security balances to its other account held either with the same Participant or with a different Participant. 9.5.3. The Participant shall ensure that all pending transactions as well as suspended accounts have been adjusted before closing such account. After ensuring that there are no balances in the Client account, the Participant shall execute the request for closure of the Client's account. 9.6. TRANSFER OF BALANCES 9.6.1. The Participant shall not execute any debit or credit in the account of the Client without authorisation from such Client. 9.6.2. The mode and the form of authorisation shall be specified in the Business Rules. 9.6.3. Where there is transfer of balance from the Client of one Participant to the Client of another Participant, both the delivering and the receiving Participant must enter instructions for delivery and receipt respectively. After the instructions are matched in the Depository system, such transfer shall be executed in the Participant 's account in the Depository and the Participant shall in turn execute such transfer in the Client's account. 9.6.4. In the event of a Participant ceasing to be a Participant for the Depository, the Client of that Participant may, either request for rematerialisation of securities or request for the transfer of balances in its account with another Participant. 9.6.5. The Depository may on receipt of a court order transfer the balances standing in the Participant 's account to another Participant account. 9.7. SECURITIES HELD IN SUSPENSE 9.7.1. The Depository may place any balance of relevant securities in a suspense account held with the Depository if it is unable to effect or give credit of a security to the account of a Participant and/or the Client as a result of incorrect electronic intimation received from the Issuer or its Registrar & Transfer Agent. Such balances shall be reconciled within a period of fifteen days failing which the Depository shall authorise the Issuer or its Registrar and Transfer Agent to issue physical securities to the concerned investors. 9.8. CORPORATE BENEFITS 9.8.1. The Issuer or its Registrar & Transfer Agent shall intimate the Depository of the corporate actions which would herein mean and include any action taken by the Issuer relating to prescribing dates for book closures, record dates, dates for redemption or maturity of security, dates of conversion of debentures, warrants, call money dates and such other action from time to time. 9.8.2. On receiving the intimation as stated above, the details of the holdings of the Clients shall be provided electronically by the Depository to the Issuer and/or its Registrar and Transfer Agent as of relevant cut off date for the purpose of corporate actions and distribution of corporate benefits. 9.8.3. *The Issuer or its Registrar and Transfer Agent shall distribute dividend, interest or other monetary benefits directly to the eligible beneficial owners on the basis of the list provided by the Depository. Provided however that the Issuer or its Registrar and Transfer Agent may opt to distribute the dividend, interest or other monetary benefits to the eligible beneficial owners through the Depository with the concurrence of the Depository. *(Amended w.e.f July 28, 1998. Prior to this amendment, Bye Law 9.8.3 read as follows : 9.8.3. The Issuer or its Registrar and Transfer Agent shall distribute dividend, interest and other monetary benefits directly to the Clients on the basis of the list provided by the Depository.) 9.8.4. The Issuer or its Registrar & Transfer Agent may, if the benefits are in the form of securities, distribute such benefits to the Clients through the Depository provided that :- i) the newly created security is an eligible security; ii) the concerned Client has consented to receive the benefits through the Depository. 9.8.5. In such case, the Issuer or its Registrar and Transfer Agent shall provide allotment details of all Clients to the Depository. 9.8.6. On receipt of allotment details, the Depository shall cause necessary credit entries to be made in the account of the Client concerned. 9.8.7. *The Clauses 9.8.1 to 9.8.6 shall not apply in case of Government securities issued by a State or the Central Government. Provided however that, the payment of interest or the principal amount or any amount in respect of Government Securities shall be in accordance with the terms of issue of Government Securities *(Inserted w.e.f. November 5, 1998) 9.9. *PLEDGE AND HYPOTHECATION *(Amended on November 13, 1997. Prior to this amendment, Bye law 9.9 read as follows : 9.9 PLEDGES AND HYPOTHECATION 9.9.1 If a Client intends to create a pledge or hypothecation on a security owned by him, he shall make an application in this regard in the form specified in the Business Rules to the Depository through the Participant, who has his account in respect of such security in the manner specified under Bye Laws 9.9.3 to 9.9.10 below. 9.9.2 The pledgor and the pledgee must have an account in the Depository to create a pledge. However, the pledgor and  the pledgee may hold an with through two different Participants. 9.9.3 If the security intended to be pledged or hypothecated is unencumbered, the Participant shall, after making a note in its records, of the notice of pledge or hypothecation, forward the application of the Client to the Depository for its approval 9.9.4 On receipt of the application of the Client through  the Participant, the Depository shall make such investigation as it may consider necessary and if it approves the creation of the pledge or hypothecation, it shall enter the details of the intended pledge or hypothecation in its records within fifteen days of the receipt of application and where it does so, intimate the Participant who shall also amend its records accordingly and immediately intimate the Client. 9.9.5 On receipt of the intimation under Bye Law 9.9.4 above, the Client may create a pledge or hypothecation and where he does so, he shall intimate the Depository through the Participant of the creation of such pledge or hypothecation. 9.9.6 The Participant, on receipt of the intimation under Bye Law 9.9.5 above, shall substitute, for the notice of the pledge or hypothecation in its records, an entry of pledge or hypothecation as the case may be and shall inform the pledgee through its Participant and the Depository. 9.9.7 On receipt of the intimation under Bye Law 9.9.6 above, the Depository shall make in its records the changes referred to in Bye Law 9.9.6 above. 9.9.8 Where the Depository disapproves the creation of the pledge or hypothecation, it shall record the reasons for such disapproval and intimate the Participant, who in turn shall inform the Client and the Client shall not create a pledge or hypothecation in respect of the securities. 9.9.9 The entry of pledge or hypothecation made under Bye Law 9.9.6 above shall be cancelled by the Participant when the Client redeems the pledge or hypothecation and makes a request, with the concurrence of the pledgee, to the Participant to cancel the entry of pledge or hypothecation, and the Participant shall inform the Depository accordingly. 9.9.10 On receipt of the intimation under Bye Law 9.9.9 above, the Depository shall make, in its records, the changes referred to in Bye Law 9.9.9 above. 9.9.11 No transfer of the security in respect of which a notice of pledge or entry of pledge is in force, shall be effected by a Participant without the concurrence of the pledgee. 9.9.12 Where the pledgee satisfies the Depository that owing to the default of the Client, the pledgee is entitled to be registered as the Beneficial Owner of the pledged securities or part thereof, the Depository may, after giving the Client a reasonable opportunity to make such representation as he may wish to make, direct the Participant to register the pledgee as the Client of such securities or part thereof and amend its own records accordingly. 9.9.13 On receipt of the direction under Bye Law 9.9.10 above, the Participant shall immediately carry out the necessary corrections in its records.) 9.9.1. If a Client intends to create a pledge on a security owned by him, he shall make an application in this regard in the form specified in the Business Rules to the Depository through the Participant, who has his account in respect of such securities. 9.9.2. The pledgor and the pledgee must have an account in the Depository to create a pledge. However, the pledgor and the pledgee may hold an account with two different Participants. 9.9.3. The Participant after satisfaction that the securities are available for pledge shall make a note in its records, of the notice of pledge, and forward the application to the Depository. 9.9.4. The Depository, after receiving confirmation from the Participant of the pledgee through an application made by the pledgee to the Participant in the form specified in Business Rules in this regard, shall within fifteen days of the receipt of the application create and record the pledge and send an intimation of the same to the Participants of pledgor and pledgee. 9.9.5. On receipt of the intimation under Bye Law 9.9.4 above, the Participants of both the pledgor and the pledgee shall inform the pledgor and the pledgee respectively of the entry of creation of the pledge. 9.9.6. If the Depository does not create the pledge, it shall within fifteen days of the receipt of application under Bye Law 9.9.1 send alongwith the reasons, an intimation to the Participants of the pledgor and the pledgee. 9.9.7. The pledgor or pledgee may request cancellation of the entry of pledge made under Bye Law 9.9.4 by making an application in the form specified in this regard in the Business Rules to the Depository through its Participant. 9.9.8. The Participant shall make a note in its records, of the cancellation of the entry of pledge and forward the request to the Depository. 9.9.9. The Depository, after receiving prior confirmation from the Participant of the pledgee through an application made by the pledgee to the Participant in the form specified in Business Rules in this regard, shall cancel the entry of pledge made under Bye Law 9.9.4 and send an intimation of the same to the Participants of pledgor and pledgee. 9.9.10. The pledgee may invoke the pledge made under Bye Law 9.9.4, subject to the provisions of the pledge document, by making an application in the form specified in this regard in the Business Rules, to the Depository through its Participant. 9.9.11. The Participant shall make a note in its records, of the request of invocation of the entry of pledge and forward the request to the Depository. 9.9.12. The Depository, on receipt of a request under Bye Law 9.9.11, shall invoke the pledge and amend its record accordingly to register the pledgee as a beneficial owner of the securities and shall thereafter, send intimation of the same to the Participants of the pledgor and the pledgee. 9.9.13. On receipt of the intimation under Bye Law 9.9.12 above, the Participants of both the pledgor and the pledgee shall inform the pledgor and the pledgee respectively of the invocation of pledge. 9.9.14. i) If the Client intends to create a hypothecation on the securities owned by him, he may do so in accordance with the provisions of Bye Laws 9.9.1 to 9.9.13. ii) The provisions of Bye Law 9.9.1 to 9.9.13 shall mutatis mutandis apply in such cases of hypothecation except in so far as Bye Law 9.9.4, the Depository shall invoke the entry of hypothecation made under Bye Law 9.9.4 after receiving confirmation from the Participant of the hypothecator through an application made by the hypothecator to the Participant in the form specified in this regard in the Business Rules. 9.9.15. No transfer of security in respect of which a notice or entry of pledge or hypothecation is in force shall be effected by a Participant without the prior concurrence of the pledge or the hypothecate as the case may be. 9.10. *TRANSMISSION OF SECURITIES *(Inserted w.e.f October 16, 1998) 9.10.1. NSDL shall effect the transmission of security balances of any Client due to death, lunacy, bankruptcy, insolvency or by any other lawful means other than transfer. 9.10.2. In case where the deceased was one of the joint holders in the Client account, the surviving Client (s) shall be the person (s) recognized by NSDL as having any title to the security balances in that joint Client account. 9.10.3. In case where the deceased was a sole holder of the Client account, his legal heir (s) or the legal representative (s) shall be the only person (s) recognised by NSDL as having any title to the security balances in that sole Client account. 9.10.4. Such surviving joint holder (s) or legal heir (s) or legal representative (s) shall be required to produce such evidence and follow the procedures prescribed in the Business Rules for the purpose of transmission of security balances in their favour. 9.11. *DEMATERIALISATION OF GOVERNMENT SECURITIES. *(Inserted w.e.f. October 16, 1998) 9.11.1. Credit of securities into the Depository shall be made on account of dematerialisation of physical securities or on account of transfer from Subsidiary General Ledger (SGL) accounts maintained by other eligible entities or on fresh issue of securities in dematerialised form. 9.11.2. A Client may convert his physical holding of securities into dematerialised form by making an application to the Participant in the Dematerialisation Request Form (DRF-GS) along with relevant security certificate and Form of transfer prescribed by RBI as contained in the Business Rules. 9.11.3. A Client may transfer his holdings in dematerialised form held in an SGL account with other eligible entity by making an application to the Participant in the Dematerialisation Request Form (DRF-GS) as prescribed under the Business Rules along with SGL transfer documents as prescribed under Rule 7 of P.D. Rules of RBI duly executed by the other eligible entity from whose SGL account the transfer is sought. 9.11.4. The Participant shall forward the DRF-GS and the documents so received, along with the security certificates, wherever applicable, to the Depository after electronically registering such a request in the DPM. Such DRF-GS shall be forwarded by the Participant to the Depository not later than seven days of accepting the same from its Client. 9.11.5. The Depository shall cause the necessary credit entries to be made in the account of the Client concerned, after obtaining prior approval from RBI for conversion of physical securities into SGL balances or for transfer of balances from SGL account maintained by other eligible entities, as the case may be. 9.11.6. Where any dematerialisation request is rejected by RBI, the Depository shall electronically intimate the Participant regarding such rejection within a period of seven days. 9.11.7. On receipt of rejection of the dematerialisation request, the Depository shall return the DRF along with the relevant security certificates and documents submitted by the Client unless the reasons for such rejections are :- a) the security certificates lodged by the Client are reported to be stolen; b) the security certificates are reported to be forged or fake; c) an order from a court or a competent statutory authority restraining the Depository from doing so; d) any other reason which in the opinion of RBI, that it would not be proper to return the security certificates. 9.12. *WITHDRAWAL OF GOVERNMENT SECURITIES FROM THE DEPOSITORY *(Inserted w.e.f October 16, 1998) 9.12.1. A Client or a Participant holding its own securities in the Depository may withdraw the same and seek physical certificate or seek transfer to an SGL account of other eligible entity by making an application to that effect to the Depository in the Rematerialisation Request Form (hereinafter referred to as RRF-GS) as specified in the Business Rules. 9.12.2. On receipt of the RRF-GS, the Participant shall check whether sufficient free relevant security balance is available in the account of the Client. If there is sufficient balance, the Participant shall accept the said RRF-GS and block the balance of the Client to the extent of the requested quantity and electronically intimate the request to the Depository. 9.12.3. On receipt of the request referred to in Bye Law 9.12.2 above, the Depository shall block the balance of the Participant to the extent of rematerialisation quantity in Depository system. 9.12.4. The Participant shall forward the RRF-GS to the Depository within seven days of accepting such request from the Client. The Depository shall forward the rematerialistion request to RBI in the form prescribed by RBI. 9.12.5. In case the request was for physical certificates, the Depository shall receive from RBI the physical certificates in its name and execute a form of transfer as prescribed by RBI in favour of the Client. The Depository shall confirm the acceptance of RRF-GS electronically and forward the physical certificates along with the form of transfer to the Client directly. 9.12.6. In case the request was for transfer to an SGL account with other eligible entity, the Depository shall confirm the acceptance of RRF electronically to the Participant, after obtaining approval from RBI. 9.12.7. On receipt of such confirmation from RBI as mentioned in Clause 9.12.5 and 9.12.6 above, the Depository shall remove the balances from the respective Participant's account and the Participant shall remove the balances from the respective Client's account. 9.13. *SECURITIES LENDING *(Inserted w.e.f November 5, 1998) 9.13.1. Any entity having an account with a Participant in the Depository, desirous to lend or borrow securities, may do so in the manner laid down under SEBI (Stock Lending Scheme), 1997 or any amendment thereof and under the Business Rules.