NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
A depository's business partners include the issuer, the Registrar and Transfer Agent (RTA) and Clearing Corporations. A company wants its shares to be held in dematerialised form with a depository. What must the company do first?
The company must enter into an agreement with the depository so that its securities are admitted for dematerialisation and assigned an ISIN. No RBI licence is needed, and neither shareholder DP status nor conversion to debentures is required.
- ASign an agreement with the depository and make the securities eligible for demat, obtaining an ISINCorrect
- BObtain a licence from the Reserve Bank of India to hold shares electronically
- CAppoint each shareholder as a DP
- DConvert all its shares into debentures
Explanation
An issuer must enter into an agreement with the depository, which gets the securities admitted and an ISIN allotted. RBI licensing, making shareholders DPs, or converting into debentures is not required.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to Depository shows your real accuracy, how long you take and where you lose marks.
More Introduction to Depository questions
- Ms. Kavita Rao wants to know how the depository and the Depository Participant relate to each other. Which description is correct?
- Mr. Iyer holds shares in demat form and wants to sell them. In the depository system, which statement correctly describes the role of the de…
- Which of the following best describes the role of a Depository Participant (DP) in relation to the depository?
- Mrs. Leela Menon wants to know why transfer of securities is faster in the depository system than in the physical system. Which feature is t…
- Which of the following is a depository in India, as per the structure of the Indian capital market?
- Which entity acts as the link between an investor and the depository, offering depository services to clients?