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Question
Explain the following term/concept:
Depository system
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
Select the correct answer from the options given below and rewrite the statement.
______ is the institute which facilitates electronic holding of securities.
Select the correct answer from the options given below and rewrite the statement.
______ has to pay charges to maintain Demat Account.
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 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.
Find the odd one.
Complete the sentence.
First Depository of the world started in the year ______.
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 word for the following.
Dematerialization ____________.
Select the Suitable option for the following.
First depository of world ____________.
Answer in one sentence.
Give examples of action termed as corporate action.
Correct the underlined word and rewrite the following sentence.
Banking system leads to a scrip less capital market.
Justify the following statement.
The electronic holding of securities is safer than physical holding.
Justify the following statement.
The depository system results in reduced time, cost, and efforts.
Explain the advantages of the Depository System to the companies.
In Depository System, securities are held in ______ form.
