Limited Participant
A stockbroker admitted by NSDL as a DP with net worth between Rs 1 crore and Rs 3 crore, permitted to operate only with restrictions on business or for a limited period.
In plain language
A stockbroker normally needs Rs 3 crore net worth to become an NSDL DP. What happens to one with less?
NSDL does not simply turn it away if it has at least Rs 1 crore. It can still be admitted, but as a Limited Participant — one whose business is restricted, or whose admission runs only for a limited period, as the depository decides.
It is a middle path: not full DP status, but not a flat refusal either.
How it works
From Chapter 3, section 3.2 (Net Worth):
NSDL prescribes a minimum net worth of Rs 3 crore for a stockbroker-DP. A stockbroker with net worth lower than Rs 3 crore but higher than Rs 1 crore can become a Limited Participant, subject to restrictions on business and/or for a limited period, as decided by the depository.
CDSL, by contrast, prescribes a flat Rs 5 crore for stockbrokers and has no equivalent Limited Participant category described in the workbook.
The restriction is the depository's call, not a fixed statutory list — the workbook does not give a further table of what exactly is restricted, only that business and/or the period of participation can be curtailed.
A worked example
Nandan Securities, a stockbroker, has a net worth of Rs 1.8 crore and wants to become an NSDL DP.
| Net worth | Category |
|---|---|
| Below Rs 1 crore | Not eligible at all |
| Rs 1 crore to Rs 3 crore | Limited Participant — restricted business and/or limited period |
| Rs 3 crore and above | Full DP |
Nandan Securities is admitted as a Limited Participant. If its net worth later rises to Rs 3.2 crore and it submits a fresh Net worth Certificate, it can be admitted as a full DP without the restrictions NSDL had imposed.
Why NISM asks about it
Chapter 3, section 3.2, sets the Limited Participant band directly beside the main net worth table. Expect a question on the exact band (Rs 1 crore to Rs 3 crore) and on the fact that this is an NSDL concept tied to the depository's discretion, not a fixed SEBI category.
Common exam traps
- The band is Rs 1 crore to Rs 3 crore, not Rs 3 crore to Rs 5 crore (that gap is the SEBI 2022 amendment's staged increase for all stockbroker-DPs, a different rule).
- Restrictions are decided by the depository, not fixed by SEBI regulation.
- This is an NSDL-specific admission route. CDSL's workbook text does not describe an equivalent category.
Where this is taught
Free preparation for NISM Series VIRelated terms
- Certificate of registrationThe SEBI registration without which a depository cannot deal in securities, no entity may act as a DP, and no FPI may invest. It is valid unless SEBI suspends or cancels it.
- 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.
- Net worth certificateA chartered accountant-certified statement of an intermediary's net worth, computed from audited books, submitted to the depository in the format its bye-laws prescribe — an annual filing obligation for every DP.