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Question
Explain the following term/concept:
Depository system
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Solution
Under Depository System, securities are held in electronic form. The transfer and settlement of securities are done electronically. The Depository System maintains the accounts of the shareholder, enables transfer and collects dividends, bonus shares, etc., on behalf of the shareholder. This system is also called a scripless trading system. In India, the Depository System was introduced by passing the Depository Act in 1996. Under this Act, a competitive multi-depository system consisting of two depositories, viz., NSDL and CDSL, was set up. The world’s first Depository was set up in 1947 in Germany.
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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.
______ is the institute which facilitates electronic holding of securities.
Match the pairs.
| Group ‘A' | Group ‘B' |
| a) Bad Delivery | 1) 1956 |
| b) Depository Act | 2) A 12 digit number/code. |
| c) ISIN | 3) Connects Government and Bank. |
| d) Depository participant | 4) Second Depository in India. |
| e) CDSL | 5) The Issuer Company. |
| f) Depository | 6) Problem faced in physical mode. |
| g) Beneficial owner | 7) A 10 digit number/code. |
| 8) Connects Depository and Investor. | |
| 9) First Depository in the world. | |
| 10) Coustodian of securities in electronic form. | |
| 11) Problem faced in electronic mode. | |
| 12) 1996 | |
| 13) Government Organisation. | |
| 14) The Investor. |
Write a word or a term or a phrase which can substitute the following statement.
The organisation which holds the securities in electronic mode.
Write a word or a term or a phrase which can substitute the following statement.
This system allows faster and easier transfer of securities.
Write a word or a term or a phrase which can substitute the following statement.
The Agent of the Depository.
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 began in the USA for the first time in the world.
State whether the following statement is true or false.
India has a multi Depository System.
Find the odd one.
Complete the sentence.
First Depository of the world started in the year ______.
Select the Suitable word for the following.
Dematerialization ____________.
Select the Suitable option for the following.
CDSL ____________.
Answer in one sentence.
What is Depository System?
Explain the following term/concept.
Depository system
Explain any four advantages of a depository system to an investor.
Justify the following statement.
Depository provides easy and quicker transfer of shares.
Justify the following statement.
The depository system results in reduced time, cost, and efforts.
Explain the advantages of the Depository System to the companies.
Give one word or phrase for the following sentence:
How securities are settled?
