Recognised depositories must maintain a sound risk management system and infrastructure capable of comprehensively managing risks. Risk-management arrangements must support operational resilience and address risks arising from recognised market-infrastructure functions.

A recognised depository must permit a participant to withdraw or transfer its account where the request complies with conditions contained in the depository's bye-laws. The participant's entitlement is subject to the procedural and substantive requirements of that bye-law framework.

Protection of beneficial owners requires every recognised depository to adopt adequate protective measures against risks arising from its activities as a recognised depository. Such measures must include insurance to safeguard beneficial owners' interests against activity-related risks.

Investor protection mechanism is mandatory for every recognised depository and must adequately safeguard persons buying and selling securities held in the depository.

Recognised depositories must maintain continuous electronic communication with participants, issuers or issuers' agents, clearing houses, clearing corporations of stock exchanges, and other depositories. The connectivity requirement supports uninterrupted coordination across the depository and market-infrastructure ecosystem.

A recognised depository must arrange an annual inspection of its controls, systems, procedures and safeguards. It must forward a copy of the resulting inspection report to the Authority under Regulation 50 of the International Financial Services Centres Authority (Market Infrastructure Institutions) Regulations, 2021.

Recognised depositories must maintain the integrity of automatic data-processing systems and protect records against loss, destruction or tampering. Sufficient backup records must be available at a different location at all times to ensure preservation and recoverability where records are lost or destroyed.

Recognised depositories must maintain adequate mechanisms for reviewing, monitoring and evaluating their controls, systems, procedures and safeguards. The general operational requirement covers each internal control element and requires mechanisms capable of performing review, monitoring and evaluation functions.

Recognised depositories must maintain systems and procedures that enable coordination with issuers or their agents and participants for daily reconciliation of securities ownership records. The requirement is directed at ensuring accurate and current ownership records within the depository framework.

Dematerialisation of securities requires an issuer to enter into an agreement with a recognised depository when the issuer or an investor exercises the option to hold securities in dematerialised form. No agreement is required where the depository is itself the issuer or where government securities are issued by the Central Government of India or a State Government. Where a Registrar to the Issue or Share Transfer Agent is appointed, the depository, issuer and registrar or agent must execute a tripartite agreement for securities declared eligible for dematerialised holding.

Regulation 45 requires a recognised depository to enter into an agreement with one or more participants acting as its agents. The arrangement establishes the required agency relationship between the depository and its participant or participants.

Securities defined under the SCRA and other eligible instruments under the IFSCA Act may be held in dematerialised form in a recognised depository.

Priority of clearing corporation recovery applies to dues arising from clearing members' clearing and settlement functions. A recognised clearing corporation may recover these dues from the clearing members' collateral, deposits and assets, with priority over every other liability of or claim against the clearing members.

Recognised clearing corporations handling physically settled commodity derivatives must ensure a financial guarantee for trade settlement, including good delivery. Good delivery requires goods to be capable of transferring title and to conform to the quality and quantity specifications of the relevant exchange contract.

Payment and settlement must follow netting or gross procedures contained in approved bye-laws of recognised stock exchanges and recognised clearing corporations. Such settlements are final, irrevocable and binding once the payable money, securities or other transaction obligations are determined, even without actual payment or delivery. Following finality, rights to appropriate contributed collateral, deposits and margins for settlement or other obligations take priority over other liabilities or claims against trading members, clearing members or clients.

Bye-laws governing contracts and clearing and settlement must be made by recognised stock exchanges and recognised clearing corporations only with the Authority's prior approval. Amendments to those bye-laws, and to constitutional documents concerning matters under the SCRA or the Market Infrastructure Institutions Regulations, also require prior approval.

Recognised stock exchanges must preserve prescribed books, account documents, and further specified records in electronic retrieval form for at least twenty years. Recognised clearing corporations are subject to the same retention format and period for governance minutes, clearing member and settlement account details, transaction and deposit records, margin information, accounting books, bank statements, and further specified records.

Equal, fair and transparent access to clearing and settlement services requires recognised clearing corporations to maintain and publish a non-discriminatory access framework. The framework must state the basis for shareholder stock exchange access and the requirements non-shareholder stock exchanges must satisfy to obtain access. Recognised stock exchanges and clearing corporations must provide equal, unrestricted and transparent access to all persons without favouring associates or related entities.

Utilization of profits and investments by a recognised stock exchange or recognised clearing corporation must comply with norms specified by the Authority. Deployment of funds generally requires prior approval. Treasury investments are exempt where they comply with a governing-board-approved investment policy. Activities involving fund deployment or otherwise unrelated or not incidental to market infrastructure functions may be undertaken through a separate legal entity, subject to the Authority's approval.

Recognised stock exchanges and recognised clearing corporations must maintain a Business Continuity Plan and a Disaster Recovery Site. The arrangements must preserve data and transaction integrity in the manner specified by the Authority from time to time.