Operational guidelines for adding beneficiary demat accounts, as per SEBI Circular No. SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/139 dated August 08, 2023, require to facilitate a user-friendly process for investors and DPs to add and verify beneficiaries before executing off-market transfers, in line with NSDL Circular nos. NSDL/POLICY/2023/0103 dated August 09, 2023, and NSDL/POLICY/2023/0175 dated December 15, 2023.

To adhere to these guidelines, users should communicate clear procedures, using simple language and step-by-step instructions for adding and verifying beneficiaries, ensuring a streamlined process that minimizes erroneous transfers. Additionally, it is essential to provide training and support to guide participants through the new procedures and address any queries, maintain comprehensive documentation for reference and audit purposes, and stay updated on further guideline changes for timely implementation.

Your cooperation in implementing these operational guidelines is appreciated, and for any clarifications, please feel free to reach out.

1. Addition of Target Beneficiary demat account(s):

A. Procedure for adding Target Beneficiary Demat Account(s) by Participant through File upload facility provided at eDPM:

• To add target beneficiary demat accounts, kindly fill out the physical form provided (see Annexure) and submit it to your participant.
• For an easy process, we have introduced the Addition/Deletion Beneficiary Upload feature under the Upload/Download option on the eDPM System. (Ref: NSDL Circular no. NSDL/POLICY/2023/0175 dated December 15, 2023)
• When adding beneficiary target demat accounts, we perform the following checks:

           a. Make sure to fill out the provided physical form accurately.

           b. Utilize the Addition/Deletion Beneficiary Upload feature for a smoother process on the eDPM System.

Intra- Depository

i. When you want to add a new beneficiary demat account from NSDL, we will check the transferee client’s details like PAN, DP ID, and Client ID. We will verify these details with the information in the target beneficiary demat account.

ii. If the validation goes well, NSDL will send a link to the transferor client’s registered mobile number and email ID. This link is for authentication.

iii. Once you click on the link, you will be taken to a web page. After confirming your identity, you will see the details of the target beneficiary demat account that you want to add. Confirm by entering the OTP, and your request will be processed. The target beneficiary demat account will then be added to your list of beneficiaries.

Inter-Depository

i. Inter Depository Off-Market Transfer: When adding a beneficiary demat account for inter depository off-market transfer, we won’t check the transferee client’s details like PAN, DP ID, and Client ID against the beneficiary target demat account in NSDL. This validation happens later, done by the target depository when processing the transfer instruction from the source depository.

ii. Authentication Link: NSDL will send a link to your registered mobile number and email ID for authentication.

iii. Confirmation Process:

• Click the link to be redirected to a web page.
• After confirming your identity, you’ll see the details of the target beneficiary demat account awaiting your confirmation.
• Confirm by entering the OTP, and your request to add the target beneficiary demat account will be processed. It will then be added to your list of beneficiaries.

In case OTP confirmation is not completed till EOD of the request initiation date, pending requests for adding target Beneficiary demat account will be rejected in EOD. DP can re-initiate such rejected requests for OTP confirmation.

B. Procedure for adding Target Beneficiary Demat Account by client using SPEED-e facility for password and e-Token based users.

1. Client shall login to NSDL SPEED-e Portal using password or e-token based option and click on TAB of ‘Add Beneficiary’ under inquiries and Submit request for Addition of target Beneficiary demat account.

2. Validations done at the time of addition of target beneficiary demat account are as follows:

Intra- Depository:

I. Adding a Beneficiary Demat Account:

• To add a beneficiary demat account in NSDL, you need to provide details like PAN, DP ID, and Client ID for the target beneficiary demat account.

II. Validation Process:

• Click the validate button, and we’ll check your PAN, DP ID, and Client ID against the details in the target beneficiary demat account.
• If the details match, you’ll see the name of the transferee client on the SPEED-e website.
• If there’s a mismatch, the SPEED-e system will show an appropriate error message.

III. OTP Authentication:

• Click the Add button, and an OTP will be generated.
• This OTP will be sent to your registered mobile number and email ID for authentication.

IV. Final Step:

• After successfully entering the OTP, the target beneficiary demat account will be added to your list of beneficiaries.

Inter-Depository:

I. Adding a Beneficiary Demat Account from Another System:

• If you’re adding a beneficiary demat account from a different depository system, provide details like PAN, DP ID, and Client ID.

II. Validation Process:

• Unlike NSDL demat accounts, we won’t check the transferee client’s details against the target beneficiary demat account during the addition process.
• This validation happens later, conducted by the target depository when processing inter depository off-market transfer instructions from the source depository.

III. OTP Authentication:

• Click the Add button, and an OTP will be generated.
• This OTP will be sent to your registered mobile number and email ID for authentication.

IV. Special Note for Other Depositories:

• When adding a target beneficiary demat account from another depository system, there won’t be a validation option available.

V. Final Step:

• After successfully entering the OTP, the target beneficiary demat account will be added to your list of beneficiaries.

C. Procedure for Deleting Target Beneficiary Demat Account (Intra and Inter Depository) by Participant through File upload provided at eDPM:

1. Deleting a Beneficiary Demat Account:
   1. To remove a target beneficiary demat account, submit a physical form (see Annexure) to your depository participant.
2. User-Friendly File Upload:
   1. Use the file upload feature on the eDPM system to easily delete a target beneficiary demat account. (Ref: NSDL Circular no. NSDL/POLICY/2023/0175 dated December 15, 2023)
3. Validation Check:
   1. The details (PAN, DP ID, & Client ID) provided in the deletion file will be checked against the target beneficiary demat accounts already added to your demat account.
4. Authentication Link:
   1. After successful validation, NSDL will send a link to your registered mobile number and email ID for authentication.
5. Confirmation Process:
   1. Click the link to access a webpage.
   1. After authenticating, see the details of the target beneficiary demat account pending your confirmation.
   1. Confirm the deletion request by entering the OTP, and the target beneficiary demat account will be removed from your list of beneficiaries.
6. Completion Deadline:
   1. If OTP confirmation is not done by the end of the request initiation date, pending deletion requests will be rejected. You can re-initiate such requests for OTP confirmation.

Procedure for off-Market transfers:

1. Procedure for off-Market transfer instruction processing Screen based/manual mode of instruction execution or through File upload provided at eDPM:

Continuing the Current Process: Carry on with the existing steps for executing off-market instructions on the screen or uploading transaction files through eDPM.

Intra-Depository Transfers: For transfers within the same depository, NSDL will check if the target beneficiary demat account matches those already added in your demat account.

If the details match, NSDL will proceed with processing the off-market instruction as usual.

Inter-Depository Transfers: When transferring between different depositories, the source depository will first validate the details of the target beneficiary demat account against your list of beneficiaries.

After successful validation, the source depository will send the transferee client’s details (PAN, DP ID, & Client ID) to the target depository for further validation.

Target Depository Validation: The target depository will then validate the details of the target beneficiary demat account (PAN, DP ID, & Client ID).

Once successfully validated, the instruction will be processed using the existing mechanism.

  B.Procedure for Off-Market Transaction execution by Client through SPEED-e using eToken.

1. Submitting Off-Market Transfer Instruction: Log in to NSDL SPEED-e Portal using an e-token and choose the appropriate option under the “Submit Instruction” tab, following the usual process.
2. Easy Beneficiary Selection: Use the drop-down menu to effortlessly select the target beneficiary demat account from your list of added beneficiaries.
3. Intra-Depository Transfers: For transfers within the same depository, stick to the existing process to process the instruction.
4. Inter-Depository Transfers: When transferring between different depositories, NSDL will share the transferee client’s details (PAN, DP ID, & Client ID) with the target depository for validation.
5. Target Depository Validation: The target depository will check and validate the details of the target beneficiary demat account (PAN, DP ID, & Client ID). After successful validation, the instruction will be processed using the current mechanism.

Important Updates:

• Changes related to the addition/deletion of beneficiary demat accounts through file upload by participants were implemented in NSDL depository system on December 26, 2023.
• Changes in the SPEED-e system, regarding adding target beneficiary demat account details by clients and validating them with the list of beneficiaries in NSDL depository system, will be in effect by the end of December 29, 2023.

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