A depository participant (DP) is an intermediary, like a bank or brokerage firm, registered with a depository (like NSDL or CDSL) that connects investors to the depository system, enabling them to hold securities in electronic form (Demat accounts) and facilitate transactions.

Role of a DP:

Intermediary: DPs act as a link between investors and the depositories, allowing investors to access the depository system and manage their securities.

Demat Account Management: DPs maintain investor-level accounts (Demat accounts) where securities are held in electronic form.

Facilitating Transactions: DPs facilitate the purchase, sale, and transfer of securities held in Demat accounts.

Providing Depository Services: DPs provide services related to securities transactions and Demat account operations.

Types of Entities that can be DPs:

Banks

Financial Institutions

Stockbrokers

Custodians

Regulatory Framework:DPs are registered with the Securities and Exchange Board of India (SEBI) and are subject to its regulations. They must meet certain criteria, including minimum net worth requirements, to be registered as a DP.

Key Depositories in India:

National Securities Depository Limited (NSDL)

Central Depository Services India Limited (CDSL)