1. An application for the grant of a certificate of registration as a participant shall be made to the Board through each depository in which the applicant proposes to act as a participant accompanied by proof of payment of fee specified.

2. The depository shall forward to the Board the application as early as possible, but not later than thirty days along with its recommendations and certifying that the participant complies with the eligibility criteria including adequate infrastructure as provided for in these regulations and the bye- laws of the depository.

3. After considering the application of the Participant, with reference to the matters specified below, if the Board is satisfied that the applicant is eligible for grant of certificate of registration, grant the certificate of Registration.(Regulation 20)

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 belongs to one of the following categories,-

1. a public financial institution;

2. a bank included for the time being in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);

3. a foreign bank operating in India with the approval of the Reserve Bank of India;

4. a state financial corporation established under the provisions of section 3 of the State Financial Corporations Act, 1951 (63 of 1951);

5. an institution engaged in providing financial services, promoted by any of the institutions mentioned in sub clause (i), (ii), (iii), (iv) jointly or severally;

6. a custodian of securities who has been granted a certificate of registration by the Board ;

7. a clearing corporation or a clearing house of a stock exchange;

8. a stock broker who has been granted a certificate of registration by the Board. The stock-broker should have a minimum net worth of rupees 50 lakhs and the aggregate value of the portfolio of securities of the beneficial owners held in dematerialised form in a depository through him, shall not exceed 8*[100 times of the net worth of the stock broker. If the stock broker seeks to act as a participant in more than one depository, he shall comply with the criteria specified above separately for each such depository; or

9. a non-banking finance company, having a net worth of not less than rupees fifty lakhs. Such company is eligible act as a participant only on behalf of itself and not on behalf of any other person. However a non-banking finance company may act as a participant on behalf of any other person, if it has a networth of Rs. 50 crores in addition to the networth specified by any other authority

10. a registrar to an issue or share transfer agent who has a minimum net worth of Rs.50 lakhs and who has been granted a certificate of registration by the Board

11. the applicant is eligible to be admitted as a participant of the depository through which it has made the application to the Board;

12. the applicant has adequate infrastructure, systems, safeguards and trained staff to carry on activity as a participant; and

13. the applicant is a fit and proper person as defined by SEBI.

14. the grant of certificate of registration is in the interests of investors in the securities market.

The grant of certificate of registration shall be subject to the following namely:-

1. the participant shall pay the registration fee specified in Part A of the Second Schedule in the manner specified in Part B thereof, within fifteen days of the receipt of intimation from the Board;

2. the participant shall comply with the provisions of the Act, Depositories Ordinance, the bye-laws, agreements and these regulations;

3. the depository through which an application for certificate of registration has been forwarded holds a certificate of commencement of business under regulation 14;

4. if any information previously submitted by the participant to the Board is found to be false or misleading in any material particular, or if there is any change in such information, the participant shall forthwith inform the Board in writing;

5. the participant shall redress the grievances of beneficial owners within thirty days of the date of the receipt of the complaint and keep the depository informed about the number and the nature of redressals; and

6. the participant shall pay annual fees prescribed in the manner specified in the regulations.