What is the difference between broker and DP ?
- A stock broker links buyers & seller through stock exchanges. He charges broking charges which is called brokerage. On the other hand, depository participant keeps the securities in safe electronic form. This means they acts a custodian of securities
- Though they work the same for a customer like a broker since there is a slight difference between them where a Broker buys and sells securities related to stocks for clients through exchanges while DP holds stocks of investments in Demat form.
Example :
Is Zerodha a DP or broker?
Zerodha is a depository participant of the CDSL depository. This means Zerodha works as a service agent for a Demat account which is held by CDSL, one of two central depositories.