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Question
Justify the following statement.
The depository system results in reduced time, cost, and efforts.
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. So, the cost involved is also eliminated.
- Even at the company end, costs, efforts, and time involved in printing and distribution of certificates in cases of new issues, bonuses, transfers, etc. are saved.
- Thus, the depository system results in reduced time, cost, and efforts.
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Answer in one sentence.
Give examples of action termed as corporate action.
Correct the underlined word and rewrite the following sentence.
Electronic mode of holding securities is risky.
Correct the underlined word and rewrite the following sentence.
Allotment and Transfer of securities are time consuming in electronic mode.
Correct the underlined word and rewrite the following sentence.
Banking system leads to a scrip less capital market.
Explain the following term/concept.
Depository system
Justify the following statement.
Depository provides easy and quicker transfer of shares.
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.
Explain any four advantages of depository system to the company.
Explain the following term/concept:
Depository system
