On Monday, investors and traders are not able to place sell orders on online brokerage platforms due to problems with the CDSL system. Zerodha, a stock brokerage firm, informed of a problem with Central Depository Services Limited (CDSL). According to the broker, investors may have difficulty authorizing the sale of equities owing to a depository issue.

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“You may face an issue with authorizing the sale of your stocks due to an issue with CDSL. We are in touch with CDSL to have the issue resolved at the earliest,” Zerodha had informed in a tweet earlier today.

Zerodha further stated that if an investor wishes to trade shares on Zerodha’s Kite until CDSL fixes the authorization problem, the CDSL authorization option can be skipped.

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“You can now skip CDSL authorisation if you wish to sell your holdings on Kite until CDSL resolves the authorisation issue. Please make sure to authorise your holdings by 5 PM,” Zerodha tweeted.

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What is CDSL?

Central Depository Services Limited (CDSL) is India’s second securities depository institution. CDSL, which was founded in 1999, maintains different securities in electronic forms, such as shares, bonds, etc. CDSL is promoted by the State Bank of India, Bank of Baroda, Axis Bank, HDFC Bank, Union Bank of India, and Standard Chartered Bank and works for the Bombay Stock Exchange (BSE). CDSL has around 600 stockbrokers affiliated with it in various capacities. CDSL’s principal goal is to provide safe and dependable depository services.

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How does CDSL work?

CDSL’s working process is similar to that of a bank. The distinction is that, whereas banks hold money from depositors, CDSL holds securities from investors in electronic form. Investors, on the other hand, cannot approach CDSL and create an account directly. They must do it with the assistance of a depository participant, or DP.

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What is DP?

Depository Participant (DP) is a CDSL-authorized agent who serves as a channel between the beneficial owner, the stock exchange, and the issuing firm. The beneficial owner is the one who uses the DP’s services. Banks, financial institutions, and stockbrokers are eligible to serve as DPs under Securities and Exchange Board of India (SEBI) laws. CDSL has authorized DPs to assist investors across the nation in dealing with securities in digital format.