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Question
Justify the following statement.
Depository provides easy and quicker transfer of shares.
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.
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RELATED QUESTIONS
In physical mode, securities are held in ______ form.
Risk of losing certificates exists in _________ mode.
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.
This mode of holding securities may result in loss and theft of certificates.
Write a word or a term or a phrase which can substitute the following statement.
The organization 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.
Depository system began in the USA for the first time in the world.
State whether the following statement is true or false.
Depository system is very similar to banking system.
Find the odd one.
Select the Suitable word for the following.
Dematerialization ____________.
Select the Suitable option for the following.
First depository of world ____________.
Answer in one sentence.
What is Depository System?
Explain any four advantages of Depository system to Investor.
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.
Explain any four advantages of depository system to the company.
