In order to promote dematerialisation of securities, NSE joined hands with leading financial institutions to establish the National Securities Depository Ltd. (NSDL), the first depository in the country with the objective of enhancing the efficiency in settlement systems as also to reduce the menace of fake/forged and stolen securities. The second depository in the country, CDSL promoted by the BSE and a few commercial banks, was granted certificate of commencement of business in February 1999.
This has ushered in an era of dematerialised trading and settlement. SEBI has made dematerialised settlement mandatory in an ever-increasing number of securities in a phased manner, thus bringing about an increase in the proportion of shares delivered in dematerialised form. Today, more than 99% of settlement of securities takes place in dematerialised form
NSE CLEARING has established connectivity with both the depositories for electronic settlement of securities.