Managing director of CDSL told The Financial Express that both the depositories have decided on the on-market model, which is expected to be finalised within the next couple of days. "Soon after, we will be developing and putting in the necessary software for on-market inter-depository transfers," he said.

Under the current off-market transfer system, brokers have to open accounts with both CDSL and NSDL. The deal then goes through a tedious process of pay-in and pay-out at both the depository levels. In the on-market system, if delivery is made at the CDSL, that is, if the selling client makes a trade through CDSL while purchase is made through NSDL, the delivery and receipts at the two points can be done directly.

Under on-market, the intervening step of pay-out from CDSL is avoided and takes place directly through NSDL, apparently shortening the time taken for the whole process. NSDL sources, however, said that it would not really make much of a difference either way. Incidentally the number of inter-depository transfers taking place, at present, since membership with CDSL is very low compared to NSDL.

In fact NSDL and CDSL has been thrashing out this entire inter-depository transfers for sometime now and differences are believed to have cropped up at the highest levels. Sources said that the endeavour has been to encourage on-market transfers all along.

C B Bhave, chief of NSDL, when contacted was non-committal about the finalisation of the modalities of inter-depository transfer system. More and more companies are getting into the demat mode, Sebi is set to increase the list of companies under compulsory demat and if CDSL is successful in its drive to increase its membership then the need for inter-depository transfers also become imperative.

Depository participants said that the new model could also lessen arbitraging opportunities which was prevalent in the current model.Incidentally the Sebi appointed Jhunjhunwalla committee on the pricing for inter-depository transfers is yet to take a final view. Pending the committee's recommendations, charges on such transfers have been kept in abeyance.