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प्रश्न
State benefits of the depository to Investors.
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उत्तर
The benefits of the depository to the Investors are:
- Elimination of Risk: All risks associated with physical certificates like delays. lost, theft, mutilation, bad deliveries, etc., are totally eliminated.
- Safety: It is the safest and most secure way of holding securities. The entire system functions under the Depository Act and is monitored by SEBI., e.g. The Investor can keep his account in a 'Freeze/Lock' mode to avoid/prevent unexpected debit or credit or both by giving instructions to the DP.
- Easy Transfer of Shares:
1. Efforts in filling transfer forms and lodging the documents are eliminated.
2. Also the stamp duty levied on the transfer of physical shares is not applicable.
3. Processing time in the transfer of securities is reduced and neither the securities nor the cash is tied/held up for an unnecessarily long time. - Updates and Intimation: The investor is provided with the status of the holdings and transactions by DP and occasionally by the Depository too.
- Security against Loan: Dematerialised securities are preferred by banks and financial institutions as security against loans.
- No concept of 'Lots': The system of odd and even lots stands abolished. The market lot is one share for dematerialized securities.
- Nomination Facility: Individual Investors can avail of the nomination facility. This simplifies the process in the event of the death of the investor.
- Automatic Credit: The account of the investor is automatically credited/debited in case of a change initiated by the company which impacts the securities. This is called 'Corporate Action'. A few examples which can be termed Corporate Action are Payment of Dividends, Issue of Bonus Shares, Offering of Rights Shares, Early Redemption of Debentures, Mergers, and Acquisitions. etc.
APPEARS IN
संबंधित प्रश्न
Write notes on Importance of Depository system.
Risk of losing certificates exists in _________ mode.
Select the correct answer from the options given below and rewrite the statement.
In Depository System, securities are held in ______ form.
Depository Act was passed in __________.
Select the correct answer from the options given below and rewrite the statement.
______ has to pay charges to maintain Demat Account.
State whether the following statement is true or false.
Physical mode of holding securities is risky.
State whether the following statement is true or false.
Depository system is very similar to banking system.
State whether the following statement is true or false.
DP is an agent of Depository.
Complete the sentence.
First Depository of the world started in the year ______.
Select the correct option from the bracket.
| Group ‘A' | Group ‘B' |
| a) Dematerialization | 1) ____________ |
| b) ____________ | 2) DP |
| c) First depository of world | 3) ____________ |
| d) CDSL | 4) ____________ |
(1999, Agent of Depository, Germany, physical to electronic)
Select the correct option from the bracket.
| Group ‘A’ | Group ‘B’ |
| a) First depository in India | 1) ____________ |
| b) ____________ | 2) Rematerialisation |
| c) Fungibility | 3) ____________ |
| d) ____________ | 4) ISIN |
(12 digit code, NSDL, Electronic to physical, No distinctive number)
Answer in one sentence.
Give examples of action termed as corporate action.
Correct the underlined word and rewrite the following sentence.
Electronic mode of holding securities is risky.
Correct the underlined word and rewrite the following sentence.
Banking system leads to a scrip less capital market.
Explain the following term/concept.
Dematerialisation
Justify the following statement.
Depository provides easy and quicker transfer of shares.
Give one word or phrase for the following sentence:
How securities are settled?
Explain any four advantages of depository system to the company.
