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Question
Justify the following statement.
DP is an important constituent of Depository system.
Solution
- Depository Participant (DP) is the agent of depository. It is an intermediary appointed by depository.
- DP is registered under the SEBI Act. It enjoys rights and obligations as specified under SEBI (Depository and Participants) Regulations of 1996.
- DP acts as a link between depository and the investor.
- It directly deals with customers. It sends statement of accounts periodically.
- It functions like a securities bank. The DP maintains account of securities of each investor.
- It facilitates dematerialisation. It settles trade electronically.
- It credits securities in the event of rights issue, bonus issue, etc. It handles instant transfers of pay-outs like dividend, interest, etc.
- Thus, DP is an important constituent of depository system.
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Answer in one sentence.
What is a DP?
Correct the underlined word and rewrite the following sentence.
Demat accounts are opened and maintained by the Depository.
Study the following case/situation and express your opinion.
Mr. L wants to demat his 25 shares of Peculiar Co. Ltd. bearing certificate No. 100 and distinctive No. 76-100.
- Which form is he required to fill as a written request to the DP?
- Does he have to fill the instrument of transfer if he wishes to transfer the same after demat?
- Does he have to quote certificate no. and distinctive no. if he wishes to transfer his shares after it is in demat form?
Explain Depository as constituent of Depository System.
Answer in brief.
Explain DP as the constituent of Depository system.
Explain the following term/concept:
Depository Participant (DP)
