The Securities and Exchange Board of India (SEBI) has settled adjudication proceedings against National Securities Depository Limited (NSDL) following an inspection of its operations during FY 2023-24.
The case was closed after NSDL paid a settlement amount of ₹15.57 crore, according to the settlement order issued by the regulator.
The action followed an inspection that reviewed NSDL’s compliance with several SEBI circulars and regulatory requirements.
Based on the findings, SEBI issued a show-cause notice in October 2024 under the SEBI Act, 1992 and the Depositories Act, 1996, initiating adjudication proceedings against the depository.
SEBI observed delays in freezing promoter and non-compliant promoter group shareholdings after instructions were received from stock exchanges. In certain cases, freezes were imposed after unfreeze directions had already been communicated.
The regulator also recorded delays of up to 77 days in implementing SEBI orders, citing concerns over internal turnaround timelines.
The inspection highlighted gaps in controls related to Client Unpaid Securities Accounts (CUSA/CUSPA). Trading and clearing members were found releasing or disposing of unpaid securities beyond the permitted five trading days.
SEBI also noted instances where entire CUSA accounts were unfrozen instead of limiting unfreezing to specific securities and quantities, contrary to the prescribed process.
SEBI pointed to delays and backdated outsourcing agreements with vendors. This included delays in finalising contracts for core information technology services.
In one case, an agreement covering a specific period was signed after the contract term had already ended, as recorded in the order.
The regulator also flagged shortcomings in ensuring that eligible demat accounts were converted into Basic Services Demat Accounts (BSDA).
SEBI noted that NSDL had not effectively ensured conversion by depository participants or obtained opt-out confirmations from beneficial owners in a timely and meaningful manner.
NSDL filed a settlement application in 2024 without admitting or denying the findings. SEBI’s Internal Committee recommended a settlement amount of ₹15.57 crore after reviewing corrective steps and actions taken against officers-in-default.
The recommendation was approved by the High-Powered Advisory Committee and SEBI’s Panel of Whole Time Members, leading to disposal of the proceedings after payment in November 2025.
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As of December 18, 2025, 9:58 am, National Securities Depository Ltd (NSDL) share price trading at ₹1,046.65, a 0.46% decrease from the previous closing price.
The payment of the settlement amount has led to the disposal of adjudication proceedings initiated after SEBI’s inspection of NSDL during FY 2023-24. The closure remains subject to conditions outlined in the settlement framework.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Dec 18, 2025, 11:25 AM IST
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