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Question
Explain the following term/concept.
Depository system
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Solution
The system under which shares are held, transferred, and settled in electronic form is called a depository system. The depository system maintains accounts of the shareholder, enables transfer, collects dividends, bonus shares, etc. on behalf of the shareholder. This system is also called as scripless trading system.
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RELATED QUESTIONS
Write notes on Importance of Depository system.
Select the correct answer from the options given below and rewrite the statement.
In Depository System, securities are held in ______ form.
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______ is the institute which facilitates electronic holding of securities.
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______ has to pay charges to maintain Demat Account.
Write a word or a term or a phrase which can substitute the following statement.
The organisation which holds the securities in electronic mode.
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Physical mode of holding securities is risky.
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India has a multi Depository System.
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| 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)
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Electronic mode of holding securities is risky.
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India has a single Depository system.
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Dematerialisation
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Depository system is very similar to the banking system.
Explain the advantages of the Depository System to the companies.
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State benefits of the depository to Investors.
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Depository System has a very important role to play in the successful functioning of the capital market.
