Depositories are financial intermediaries that have the investors’ DEMAT accounts in which digital shares are held. The two depositories in India are – National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
To open a depository account, investors must approach a Depository Participant (DP), which can be a bank, financial institution, or broker. Once opened, the investor’s DP account is registered with a Depository like CDSL or NSDL.
Then come Clearing Corporations which ensure that transactions are settled seamlessly on the stock exchange. They work to eliminate the possibility of defaults by counterparties (buyers & sellers). In India, NSCCL and ICCL are NSE and BSE’s clearing corporations, respectively.