Depository Participant

Depository participants (DPs) act as intermediaries between depositories and investors. They assist in opening and managing Demat accounts and handle transactions such as transfers and pledges of securities.
Depository Participant
3 mins
03 July 2024

Depository Participants (DPs) play a crucial role in facilitating the seamless and efficient trading and settlement of securities. DPs serve as intermediaries between investors and the central securities depository, providing a range of services related to holding and transacting securities in electronic form. This comprehensive article delves into the functions, regulations, and significance of DPs in the Indian financial landscape.

What are depository participants?

A depository participant (DP) is a registered intermediary between the depository and investors in India. They are agents who are registered with a depository and fulfil the minimum net worth criteria as instructed by the Securities and Exchange Board of India (SEBI) and the respective depositories. DPs play a significant role in facilitating the trading process by connecting investors to the depositories in India. They maintain investor-level accounts for securities, while all company accounts of securities are managed by the depository.

Additional read: What is Short Selling

Types of depositories

In India, there are two depositories, namely the National Securities Depository Limited (NSDL) and the Central Depository Services Limited (CDSL). Both NSDL and CDSL are government-registered share depositories that offer similar services of storing and trading securities in electronic form

1. NSDL:

NSDL is the oldest depository in India, established in 1996. It offers depository services to investors, issuers, and intermediaries in theIndian securities market. NSDL provides services such as dematerialisation of securities, rematerialisation, pledge and hypothecation of securities, and electronic settlement of securities trades. It has more than 2 crore active customers and 278 depository participants.

2. CDSL:

CDSL, on the other hand, was established in 1999. It provides convenient, dependable, and secured depository services to the Indian securities market. CDSL offers services such as dematerialisation of securities, rematerialisation, transfers between depositories, off-market transfers, lending of securities, nomination services, collateral, and mortgage of securities. It has 599 depository participants registered with it.


Investor Priya prefers using a brokerage firm for her investments. She chooses ABC Securities (an NSDL DP) for its reputed technological edge and comprehensive service offerings, including research reports and market insights. Alternatively, her friend prefers the straightforward services of PQR Finance (a CDSL DP), valuing their transparent and user-friendly approach.

Role and functions of depository participants

  1. Intermediary between investors and depositories: DPs act as a link between investors and depositories in India. They help investors in opening accounts with the registered depository, facilitate transfer of securities, and settle trades done on the exchange connected to the depository.
  2. Dematerialisation of securities: DPs help investors convert physical securities into electronic form, which is called dematerialisation. This process eliminates the need for physical certificates and reduces the risk of theft, forgery, and loss of certificates.
  3. Rematerialisation of securities: DPs also help investors convert electronic securities back into physical form, which is called rematerialisation. This process is useful when investors want to sell their securities in physical form or transfer them to another account.
  4. Pledge and hypothecation of securities: DPs facilitate the pledge and hypothecation of securities by investors. Pledge is the process of using securities as collateral for a loan, while hypothecation is the process of pledging securities without transferring ownership.
  5. Portfolio management: DPs offer portfolio management services to investors, which include tracking their investments, providing regular statements, and managing their portfolios.
  6. IPO intermediation: DPs also act as intermediaries in Initial Public Offerings (IPOs) by accepting applications from investors and submitting them to the registrar of the issue.

Depository participant vs. stockbroker

While DPs and stockbrokers both play crucial roles in the investment process, DPs focus on the safekeeping and management of securities, whereas stockbrokers are primarily involved in facilitating the trading of those securities.



Depository participant (DP)

Primary function

Facilitates buying and selling of securities on behalf of clients.

Connects investors to the depository, holds, and maintains investor-level Demat accounts for securities. Manages trading activities.

Role in trading

Executes trades, provides market analysis, and investment advice.

Facilitates the movement of securities, manages Demat accounts, and ensures the settlement of trades by connecting investors to the depository.

Account type

Provides trading accounts for buying and selling securities.

Provides Demat accounts for holding securities in electronic form.

Interaction with depositories

Interacts with depositories for trade settlement and clearance.

Directly interacts with depositories (for example, NSDL, CDSL) to manage Demat accounts and facilitate the transfer of securities.

Ownership of assets

Facilitates ownership and transfer of securities in the market.

Safeguards and facilitates the transfer of ownership of securities held in dematerialised form through Demat accounts.

Regulatory oversight

Regulated by the Securities and Exchange Board of India (SEBI).

Regulated by SEBI and acts as an agent of the depository for maintaining Demat accounts.


Charges brokerage fees for buying/selling securities.

Charges DP charges for maintaining Demat accounts and facilitating the transfer of securities. May also charge other account-related fees.

Focus area

Primarily focused on securities trading and investment services.

Primarily focused on facilitating the safekeeping and transfer of securities in electronic form.

Handling of investor accounts

Manages investor accounts related to trading activities.

Manages investor-level Demat accounts and liaises with depositories for the transfer and settlement of securities.


Difference between depository and depository participant

In the context of securities trading and settlement, the terms "depository" and "depository participant" represent distinct entities, each serving a unique function within the system. Here's a breakdown of the key differences between a depository and a depository participant:



Depository Participant (DP)


A centralised institution responsible for holding and maintaining securities in electronic form.

An intermediary appointed by a depository to offer depository services to investors.

Primary role

Custodianship of securities, electronic settlement, corporate actions processing.

Opening demat accounts, settlement of trades, providing account services.


National Securities Depository Limited (NSDL), Central Depository Services Limited (CDSL).

Various brokerage firms, banks, financial institutions appointed by depositories.


Regulated by the Securities and Exchange Board of India (SEBI).

Regulated by the depository and SEBI.


Hold securities in electronic form, facilitate settlement of trades, process corporate actions.

Facilitate opening of demat accounts, settle trades, provide account statements.

Direct interaction

Investors typically don't interact directly with the depository.

Investors interact directly with DPs for demat account-related services.


Acts as the central entity for securities holding and processing.

Acts as the interface between investors and the central depository.


While stockbrokers facilitate the buying and selling of securities, depository participants play a pivotal role in connecting investors to depositories like NSDL and CDSL, managing Demat accounts, and overseeing the secure transfer of securities. This dynamic partnership underscores the importance of a well-integrated system, where each entity contributes uniquely to the overall efficiency and transparency of the trading process, ultimately benefiting investors and fostering a robust financial ecosystem in India.

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more


1. Bajaj Finance Limited (“BFL”) is a Non-Banking Finance Company (NBFC) and Prepaid Payment Instrument Issuer offering financial services viz., loans, deposits, Bajaj Pay Wallet, Bajaj Pay UPI, bill payments and third-party wealth management products. The details mentioned in the respective product/ service document shall prevail in case of any inconsistency with respect to the information referring to BFL products and services on this page.

2. All other information, such as, the images, facts, statistics etc. (“information”) that are in addition to the details mentioned in the BFL’s product/ service document and which are being displayed on this page only depicts the summary of the information sourced from the public domain. The said information is neither owned by BFL nor it is to the exclusive knowledge of BFL. There may be inadvertent inaccuracies or typographical errors or delays in updating the said information. Hence, users are advised to independently exercise diligence by verifying complete information, including by consulting experts, if any. Users shall be the sole owner of the decision taken, if any, about suitability of the same.

Standard Disclaimer

Investments in the securities market are subject to market risk, read all related documents carefully before investing.

Research Disclaimer

Broking services offered by Bajaj Financial Securities Limited (Bajaj Broking) | REG OFFICE: Bajaj Auto Limited Complex, Mumbai –Pune Road Akurdi Pune 411035. Corp. Office: Bajaj Broking., 1st Floor, Mantri IT Park, Tower B, Unit No 9 &10, Viman Nagar, Pune, Maharashtra 411014. SEBI Registration No.: INZ000218931 | BSE Cash/F&O/CDS (Member ID:6706) | NSE Cash/F&O/CDS (Member ID: 90177) | DP registration No: IN-DP-418-2019 | CDSL DP No.: 12088600 | NSDL DP No. IN304300 | AMFI Registration No.: ARN –163403.


Research Services are offered by Bajaj Financial Securities Limited as Research Analyst under SEBI Registration No.: INH000010043.

Details of Compliance Officer: Ms. Kanti Pal (For Broking/DP/Research) | Email: | Contact No.: 020-4857 4486 |

This content is for educational purpose only.

Investment in the securities involves risks, investor should consult his own advisors/consultant to determine the merits and risks of investment.

Frequently asked questions

How to know my depository participant?

You can find out your depository participant by checking your Demat account statement or contacting your bank or broker.

Are the depository participant and broker the same?

No, a depository participant (DP) is not the same as a broker. A DP is an intermediary between the investor and the depository, while a broker is an intermediary between the investor and the stock exchange.

How to change depository participants?

To change your depository participant, you need to fill up a form called the “Client Master form” and submit it to the new DP along with the necessary documents. The new DP will then initiate the transfer process, and your securities will be transferred from the old DP to the new DP.

What is a depository and depository participant?

A depository is an organisation that holds securities in electronic form on behalf of investors. A depository participant (DP) is a registered intermediary between the depository and investors in India. DPs act as a link between investors and depositories, maintain investor-level accounts for securities, and facilitate the trading process by connecting investors to the depositories in India.

What is an example of a depository and depository participant?

An example of depositories in India are NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited). They facilitate the electronic holding and transfer of securities. An example of a depository participant (DP) is Bajaj Broking, which acts as an intermediary between these depositories and investors. 

Show More Show Less