CM-BP-ID
Also written Clearing Member Business Partner Identification Number
The identification number NSDL allots to a clearing member's settlement account, combining with the Clearing Corporation's CC-CM-ID and the DP's Client-ID to identify the account uniquely.
In plain language
A broker's settlement account needs its own identity in the depository system, separate from any ordinary demat account. That identity is built out of three numbers, not one.
At NSDL, the clearing member first registers with the Clearing Corporation and receives a CC-CM-ID. The depository then allots a second number: the CM-BP-ID. The DP itself adds a third piece, the Client-ID. Together, these three numbers identify one clearing member account uniquely.
CDSL runs this step differently. It has no separate CM-BP-ID at all — instead its system simply generates a 16-digit ID, similar to an ordinary BO ID.
How it works
Before a clearing member account can be opened at NSDL, the DP sends the depository the clearing member's account opening form, the letter from the Clearing Corporation confirming its CC-CM-ID, and a copy of its SEBI registration certificate. The depository then allots the CM-BP-ID. Based on that allotment, the DP activates the account and generates a Client-ID, and the date of account opening is communicated electronically to the depository.
Generally there is only one CM account per broker per stock exchange at NSDL, though a broker dealing on more than one exchange needs a separate set of CM accounts for each. CDSL, by contrast, requires a CM to open multiple accounts and dispenses with the CM-BP-ID concept, generating a 16-digit account ID instead.
The CM-BP-ID also appears operationally outside account opening: a tender offer delivery instruction, for example, must state the CM-BP-ID of the target clearing member account, so the depository system can route the blocked shares correctly.
A worked example
Suvidha Securities registers as a trading member of NSE and receives a CC-CM-ID from the National Clearing Corporation. It then sends its DP the account-opening form, the CC-CM-ID letter and its SEBI registration certificate.
NSDL allots Suvidha Securities a CM-BP-ID, say 12034, and the DP generates a Client-ID for the account, say 00. Together, CC-CM-ID, CM-BP-ID and Client-ID identify Suvidha Securities' settlement account uniquely across the depository system — a client submitting a delivery instruction to move 1,000 shares worth Rs 4,50,000 into that account for pay-in must quote the correct CM-BP-ID, or the instruction cannot be matched to the right settlement account.
Had Suvidha Securities instead opened its clearing member account with CDSL, none of this CM-BP-ID allotment would apply — CDSL would simply generate a 16-digit account ID, the same format as an ordinary demat account.
Why NISM asks about it
Chapter 4, section 4.4.1, sets out the NSDL clearing-member account-opening sequence in detail, and the CM-BP-ID is also referenced in Chapter 10's tender-offer instruction requirements. The NSDL-versus-CDSL contrast here is a frequent exam point.
Expect a question asking which entity allots the CM-BP-ID (the depository, at NSDL) and which depository dispenses with the concept altogether (CDSL, which issues a 16-digit ID instead).
Common exam traps
- CM-BP-ID is an NSDL concept; CDSL has no equivalent, using a 16-digit ID similar to a BO ID instead.
- Three separate numbers identify an NSDL clearing member account: CC-CM-ID from the Clearing Corporation, CM-BP-ID from the depository, and Client-ID from the DP. Do not treat any one of these as sufficient on its own.
- Generally one CM account per broker per exchange at NSDL, but CDSL requires a CM to open multiple accounts — the opposite pattern from what many candidates assume.
Check yourself
1.How many clearing member accounts may a broker maintain per stock exchange?
- a)As many as required, in both depositories
- b)Generally one per stock exchange; in NSDL only one, while CDSL permits additional CM accounts for F&O and SLBM
- c)Exactly two in every case
- d)None — a broker uses his beneficiary account for settlement
Show the answer
Answer: (b) Generally one per stock exchange; in NSDL only one, while CDSL permits additional CM accounts for F&O and SLBM
Generally, there will be only one CM account per broker for a stock exchange.
The depository difference: a Clearing Member may open only one CM Account. However, a Clearing Member may open additional CM Account(s) with the Participant for the purpose of Futures & Options (F&O) and/or Securities Lending and Borrowing Mechanism (SLBM) transactions and the Clearing Corporation shall allot additional CC-CM-IDs to the Clearing Member for this purpose. This is not applicable in NSDL, as Clearing Members maintaining CM Accounts with DPs of NSDL can open and maintain only one CM Account per stock exchange.
Option D reverses the position: clearing members and brokers have to open a beneficiary account if they have to deal with their own holdings — the beneficiary account is for own holdings, the CM account for settlement.
And the CM account may not be used for holding: the clearing account should only be used for clearing and settlement purposes and not for any other purpose, e.g., holding of securities. All the securities received in a settlement account should be transferred to respective beneficial accounts as soon as possible, but in no case later than the time prescribed by the depository/stock exchange/SEBI.
How an NSDL clearing account is identified: the clearing account is identified by the combination of CC-CM-ID given by the clearing corporation, CM-BP-ID given by the depository and the Client-ID given by the DP. In CDSL, the concept of CM-BP-Id is not there and the system generates a 16-digit ID similar to the BO ID.
Who is a clearing member: all the members of a stock exchange are clearing members; and custodians who have been permitted by the stock exchange to act as a clearing member.
Where this is taught
Free preparation for NISM Series VIRelated terms
- Depository participantThe SEBI-registered agent through whom an investor reaches a depository — NSDL and CDSL cannot open investor accounts themselves, so every demat account is opened and operated through a DP.
- Clearing member accountThe special demat account a broker or custodian opens to settle exchange trades, through which clients' sold shares go to the clearing corporation and bought shares arrive; also called the pool account.
- DP-IDThe unique identification number a depository issues to a Depository Participant once its system connectivity is activated in the live environment, allowing it to start functioning.