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Question
Justify the following statement.
Depository provides easy and quicker transfer of shares.
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Solution
- Under the depository system, securities are held in electronic form.
- The transfer and settlement of securities are done electronically.
- The efforts that were required in filling transfer forms and lodging the documents are eliminated in the depository system.
- 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.
- Further, stamp duty levied on the transfer of physical shares is also not applicable.
- Hence, the depository provides easy and quicker transfer of shares.
RELATED QUESTIONS
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.
State whether the following statement is true or false.
Allotment of securities take longer time when in physical mode.
State whether the following statement is true or false.
A Bank can work as a DP.
Find the odd one.
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 Suitable option for the following.
____________ DP.
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)
Correct the underlined word and rewrite the following sentence.
India has a single Depository system.
Explain the following term/concept.
Depository system
Explain the following term/concept.
Dematerialisation
Explain any four advantages of a depository system to an investor.
Explain four advantages of Depository system to the Company.
Justify the following statement.
The depository system results in reduced time, cost, and efforts.
Justify the following statement.
Depository system is very similar to the banking system.
Explain the advantages of the Depository System to the companies.
Give one word or phrase for the following sentence:
How securities are settled?
India has a single depository system.
Justify the following statement.
Depository System has a very important role to play in the successful functioning of the capital market.
