Advertisements
Advertisements
Question
The purpose of opening a Demat Account with a Depository Participant (DP) is ______.
Options
For holding and transferring securities in the Demat form
For entering into an agreement with broker
For making payment to stock exchange for any purchase of securities
For enabling cash transactions in the securities market
Advertisements
Solution
The purpose of opening a Demat Account with a Depository Participant (DP) is for holding and transferring securities in the Demat form.
Explanation:
A Demat (dematerialised) account, opened with a Depository Participant (DP), is used to hold securities (shares, bonds, ETFs, etc.) in electronic form and to facilitate electronic transfers/settlements of those securities. DPs act as the investor’s interface to the depositories (NSDL/CDSL) for dematerialisation, transfers, pledging and other Demat services.
