Smart Card / e-Token User
Also written Smart Card · e-Token User · Smart Card User
The hardware-authenticated way of accessing NSDL's SPEED-e facility, required for any Clearing Member and carrying no cap on the number of accounts an ordinary user can instruct.
In plain language
SPEED-e offers two ways in. One runs on a password alone. The other needs a physical credential: a smart card or an e-token. A Smart Card / e-Token User authenticates with that hardware, not just a typed password.
The difference is not just security. It is capability. Only a Smart Card/e-Token User can act as a Clearing Member on SPEED-e at all, and only this kind of user can freeze or unfreeze the demat account directly through the facility.
How it works
From Chapter 5, sections 5.3.1–5.3.2: a demat account holder or Clearing Member accesses IDeAS/SPEED-e either as a Password User or a Smart Card/e-Token User. A Clearing Member must be a Smart Card/e-Token User to access SPEED-e at all — a Password User cannot fill that role. Unlike a Password User, capped at six Pre-Notified Clearing Member accounts, a Smart Card/e-Token User can submit instructions in favour of any number of accounts, and can also freeze or unfreeze the account through SPEED-e. At NSDL, a client registered for e-Token-based SPEED-e access can also submit pledge instructions the same way (Chapter 9).
A worked example
Suvidha Securities, a Clearing Member, must register as a Smart Card / e-Token User to use SPEED-e at all — registering merely as a Password User is not open to a CM.
As a Smart Card/e-Token User, Suvidha submits delivery instructions in favour of 9 separate Clearing Member accounts in a single week, with no cap stopping it, and can freeze its own demat account directly through SPEED-e if it ever needs to.
Mr Iqbal, an ordinary retail investor who is not a Clearing Member, also chooses to register as a Smart Card/e-Token User. He now has no 6-account cap, unlike a Password User, but this credential alone still does not make him a Clearing Member — he would need to actually be one.
Why NISM asks about it
Chapter 5, section 5.3.2, sets the Smart Card/e-Token User against the Password User as SPEED-e's two access modes. Expect a question on the requirement that a Clearing Member specifically be a Smart Card/e-Token User, and on the unique freeze/unfreeze capability this user type carries.
Common exam traps
- A Clearing Member on SPEED-e must be a Smart Card/e-Token User — a Password User cannot fill that role.
- No cap on the number of CM accounts a Smart Card/e-Token User can instruct in favour of — contrast the Password User's cap of six.
- Holding this credential does not, by itself, make someone a Clearing Member — it is a precondition for a CM, not a substitute for being one.
Check yourself
1.IDeAS is a facility that allows a demat account holder to:
- a)Submit delivery instructions over the internet
- b)View balances and transactions in the demat account, updated online with a delay of maximum 30 minutes
- c)Pledge and unpledge securities online
- d)Open a demat account online
Show the answer
Answer: (b) View balances and transactions in the demat account, updated online with a delay of maximum 30 minutes
IDeAS is the facility for viewing balances and transactions in the demat account updated on an online basis with a delay of maximum 30 minutes.
NSDL has launched a facility called IDeAS from January 1, 2004 for investors to view balances and transactions in demat accounts updated on an online but not real time basis.
It views; it does not transact. That is the whole distinction from SPEED-e, and option A describes SPEED-e: SPEED-e enables demat account holders (including Clearing Members) to submit delivery instructions directly on the Internet.
What IDeAS shows: IDeAS enables Clients (Beneficial owners) to view the latest balances and transactions that have taken place in the last five days... Clients now are able to view the transactions for a period of past 30 days. Clients can select the period upto 30 days from the current date.
Who can use it: the users of SPEED-e, clearing members who have subscribed to IDeAS and to those clients whose DPs are registered for IDeAS, either as a Password or a Smart Card/e-Token User.
Enhancements display values for mutual fund units (security type code '20')... based on the NAVs, price/face value and indicative value... in respect of non-convertible debentures, bonds, ETFs, unlisted equity shares, and the price as of the previous date and value in respect of ISINs pertaining Sovereign Gold Bonds.
For clearing members: they can view and download latest balances and transactions executed in their CM Pool accounts in respect of settlements for the current pay-in date, previous four and next four pay-in dates.
The CDSL equivalent is easi — Electronic Access to Securities Information — whereby beneficial owner can view their demat account holding, download the transaction statements.
2.A Password User of SPEED-e can debit his demat account:
- a)In favour of any account
- b)Only in favour of specified Pre-Notified Clearing Member accounts, up to six
- c)Only in favour of accounts held with the same DP
- d)Not at all — password users can only view
Show the answer
Answer: (b) Only in favour of specified Pre-Notified Clearing Member accounts, up to six
Password Users can debit their demat accounts only in favour of specified Pre-Notified Clearing Member accounts (upto six), while Smart Card/e-Token User can submit instructions in favour of any number of accounts.
Option A describes the Smart Card/e-Token user. Option D confuses SPEED-e with IDeAS — SPEED-e is the instruction facility; IDeAS is the facility for viewing.
The credential also determines who may use it at all: a demat account holder will have the option of accessing SPEED-e either as a Password User or as a Smart Card/e-Token User. A Clearing Member must be a Smart Card/e-Token User to be able to access SPEED-e.
And one function is reserved for the stronger credential: as a smart card user, clients can also freeze or unfreeze their accounts by giving instructions through SPEED-e.
Both classes of user share some features: the launch of redemption of mutual fund units through SPEED-e facility... enable both type of users viz., password and e-Token users to give request to redeem the mutual fund units.
And password users have their own facility: SIMPLE, a facility that enables the password based users of SPEED-e facility to submit Client to Clearing Member Pool Account transfer instructions, on SPEED-e website through their mobile phones (enabled with GPRS).
Background: NSDL launched SPEED-e (pronounced as speedy) in September, 2001. Any DP of NSDL can subscribe to SPEED-e, the common infrastructure of NSDL. SPEED-e is available only to those DPs who have subscribed to it.
Where this is taught
Free preparation for NISM Series VIRelated terms
- PledgeA charge created over demat securities in favour of a lender who may appropriate them unilaterally on default — created by book entry under section 12 of the Depositories Act, not by handing over anything.
- 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.
- Password UserA SPEED-e access mode that lets a demat account holder submit delivery instructions online but only to a maximum of six pre-notified Clearing Member accounts, unlike a Smart Card/e-Token user who faces no such cap.
- SPEED-eNSDL's internet-based facility, launched in September 2001, letting demat account holders and Clearing Members submit delivery instructions directly online instead of on paper.
- IDeASInternet-based Demat Account Statement: NSDL's viewing facility, launched January 1, 2004, showing demat balances and transactions online, not real time, with a delay of at most 30 minutes.