Question

Explain any four advantages of depository system to the company.

Answer 1

1. Up-to-date Information: The up-to-date information about investors is provided by the depository.
2. Reduction in costs and efforts: Costs, efforts and time involved in printing and distribution of certificates in cases of new issues, bonuses, transfers, etc. are saved.
3. Better Investor-Company Relationships: The complaints arising out of loss of certificates, signature differences, long lapses of time in executing requests, etc. are substantially reduced. It leads to better communication with investors and increased goodwill for the company.
4. International Investment: Under the Depository System, better and quicker services can be provided and this attracts investments from abroad.