What is the difference between custodian and depository participant

Angel Broking. Paytm Money. IIFL Securities. Best Discount Broker in India. Best Full-Service Brokers in India. Unlimited Monthly Trading Plans. Disclaimer and Privacy Statement. All Rights Reserved. This segregation like a Chinese wall ensures the highest level of safety and security to the clients. We also maintain detailed securities movement and control records which maintains details of all asset movements, deposits, and withdrawals, including temporary withdrawals.

To this end, we have developed a comprehensive system for tracking and responding to client queries and problems. Furthermore, we provide each client with a customized Service Level Agreement detailing agreed standards for each element of our service. Dynamic Regulatory requirements and new industry initiatives are creating unique demands for enhanced liquidity management and operational efficiencies across different segments. When you first start investing in the stock market, you will come across a variety of terms.

Here is a distinction between Custodian and Depository that you should be aware of before investing. The functions of a custodian and a depository are very similar. The roles of custodians and depositories are constantly overlapping as the financial world evolves.

However, there are a few key distinctions between custodian and depository which you must know. A custodian is a bank or financial institution that holds financial securities such as stocks, bonds, gold, and other valuables in their custody.

Securities and shares are held in the custody of custodians. It's possible that the securities are held by some banks. SEBI-registered market intermediaries, custodians are primarily responsible for the safekeeping of their clients' securities such as shares. Clients can take advantage of a variety of services, including corporate action reconciliation and clearing and settlement post-trading. A custodian is a company that provides investors and customers with safekeeping services.

The bank or financial institution not only safeguards these assets, but also provides a historical view of their value. Company Profiles. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Personal Finance Banking. What Is a Depository? Key Takeaways A depository is a facility or institution, such as a building, office, or warehouse, where something is deposited for storage or safeguarding.

Depositories may be organizations, banks, or institutions that hold securities and assist in the trading of securities. They provide security and liquidity, use the money deposited to lend to others, invest in securities, and offer a funds transfer system. Article Sources. Investopedia requires writers to use primary sources to support their work.

These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Terms Safekeeping Safekeeping is generally the storage of assets financial or otherwise or additional items of value in a protected area.

Deposits: What You Need to Know A deposit is both a transfer of funds to another party for safekeeping and the portion of funds used as collateral for the delivery of a good. Learn how the DTC lowers risks and costs for investors.