Regulation 35 - Consideration of application for grant of certificate of registration - Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018

Consideration of application for grant of certificate of registration 35. For the purpose of grant of certificate of registration, the Board shall take into account all matters which are relevant to or relating to the efficient and orderly functioning of a participant and in particular, whether the applicant complies with the following requirements, namely :- (a) the applicant belongs to one of the following categories,- (i) a public financial institution as defined in section 2(72) of the Companies Act, 2013; (ii) a bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934); (iii) a foreign bank operating in India with the approval of the Reserve Bank of India; (iv) a State Financial Corporation established under the provisions of section 3 of the State Financial Corporations Act, 1951 (63 of 1951); (v) an institution engaged in providing financial services, promoted by any of the institutions mentioned in sub-clauses (i), (ii), (iii) and (iv), jointly or severally; (vi) a custodian of securities who has been granted a certificate of registration by the Board under sub-section (1A) of section 12 of the Act; (vii) a clearing corporation or a clearing house of a stock exchange; (viii) a stock broker who has been granted a certificate of registration by the Board under sub-section (1) of section 12 of the Act : 1 [ Provided that the stock broker shall have a networth of rupees three crores {within one year of the date of notification of the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2022}, which shall be increased to rupees five crores {within two years of the date of notification of the Securities and Exchange Board of India (Depositories and Participants) (Amendment) Regulations, 2022}: Provided further that a self-clearing member fulfilling the networth requirements as provided under the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 shall also be eligible to register as a depository participant. ] (ix) a non-banking finance company, having a net worth of not less than rupees fifty lakhs: Provided that such company shall act as a participant only on behalf of itself and not on behalf of any other person: Provided further that a non-banking finance company may act as a participant on behalf of any other person, if it has a net worth of rupees fifty crore in addition to the net worth specified by any other authority; (x) a registrar to an issue or share transfer agent who has a minimum net worth of rupees ten crores and who has been granted a certificate of registration by the Board under sub-section (1) of section 12 of the Act; (b) the applicant is eligible to be admitted as a participant of the depository through which it has made the application to the Board; (c) the applicant has adequate infrastructure, systems, safeguards and trained staff to carry on activity as a participant; (d) the applicant is a fit and proper person 2 [ under the Securities and Exchange Board of India (Intermediaries) Regulations, 2008 ] ; and (e) the grant of certificate of registration is in the interests of investors in the securities market. ************* NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/74 dated 23-02-2022 before it was read as Provided that the stock broker shall have a minimum net worth of rupees fifty lakhs and the aggregate value of portfolio of securities of the beneficial owners held in dematerialised form in a depository through him, shall not exceed hundred times of the net worth of the stock broker: Provided further that if the stock broker seeks to act as a participant in more than one depository, he shall comply with the criteria specified in the first proviso separately for each such depository: Provided also that where the stock broker has a minimum net worth of rupees ten crore, the limits on the aggregate value of the portfolio of securities of the beneficial owners held in dematerialized form in a depository through him shall not be applicable; 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/147 dated 22-08-2023