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NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

A company wants its shares to be held and traded in dematerialised form. Before the shares can be admitted, the issuer must typically do which of the following with a depository?

An issuer must enter into an agreement with the depository and obtain an ISIN, the unique identification number of the security, so that the securities can be held and transferred in electronic form. A custodian per shareholder or a foreign listing is not required.

  1. AAppoint a custodian for each shareholder
  2. BEnter into an agreement with the depository and obtain an ISIN for the securityCorrect
  3. CGet its shares listed only on a foreign exchange
  4. DOpen a demat account for the stock exchange

Explanation

An issuer signs an agreement with the depository to admit its securities, and the security receives a unique ISIN. Custodians per shareholder and foreign listing are not needed.

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