Section 16 of the Depositories Act, 1996 makes a depository liable to indemnify the beneficial owner for the losses caused to him on account of a DP's negligence. Condemning the current practice where the onus of liability falls entirely on the depository and the benefits are passed on to the DPs, the committee has said that the liability can also be shared by the DPs."Losses caused due to the negligence of the DP should not be borne by the depository, but by the DPs," said Dhanuka. The committee is also of the view that stamp duty exemption offered to the depository should be extended to the transfer of allsecurities, debentures and bonds.

"Stamp duty may be levied at the stage of `issue' of securities and not at the stage of transfer," explained Dhanuka. The committee, which also examined the existing Sebi Act, 1992 and the SCRA, 1956, has drafted new rules to be called the Securities Act, 1998.