The Central Depository Services (India) Limited (CDSL) on July 31, 2026, issued the Comprehensive Surveillance Framework for Depository Participants (DPs).
The following has been stated:
• The framework requires DPs to establish and periodically review a comprehensive Surveillance Policy and Standard Operating Procedures (SOPs) covering alert generation, client due diligence, monitoring, reporting, record-keeping, and compliance with the Prevention of Money Laundering Act (PMLA). DPs shall generate and dispose of surveillance alerts within 45 days (extended to 60 days for specified half-yearly multiple-account alerts), report adverse observations to CDSL within 7 days, maintain robust KYC processes, implement maker-checker controls, ensure periodic staff training, and submit quarterly surveillance reports within 15 days of the end of each quarter, including NIL reports where applicable.
• The framework also strengthens the responsibilities of Compliance Officers and Internal Auditors, requiring quarterly MIS reporting to the Board, periodic review of surveillance parameters, validation of SOP implementation, and assessment of alert quality. It prescribes a detailed penalty framework for delayed reporting and non-compliance, including monetary penalties for delayed submission of quarterly reports and surveillance alert responses, with repeated violations subject to referral to the Member Committee for disciplinary action. Additionally, DPs are required to report suspicious demat account activities through the CDAS Surveillance System after due diligence and ensure timely, accurate, and well-supported submissions.
• The communiqué supersedes and consolidates all previous surveillance-related instructions, providing a single comprehensive reference for DP surveillance obligations.
[Notification no. – CDSL/DP/SURV/2026/521]
