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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository

A depository's net worth requirement and ownership are regulated by SEBI. Which of the following correctly reflects the SEBI (Depositories and Participants) framework regarding who may act as a depository in India?

Only a company that has obtained a certificate of registration from SEBI can act as a depository in India. Registration is required under the Depositories Act and SEBI regulations; neither unregistered companies, brokers nor the RBI can authorise a depository to operate.

  1. AAny company registered under the Companies Act may start a depository without SEBI approval
  2. BOnly a company that obtains a certificate of registration from SEBI can act as a depositoryCorrect
  3. CA stock exchange broker may operate a depository without registration
  4. DThe RBI grants the certificate of registration for all depositories

Explanation

A depository must be a company that has obtained a certificate of registration from SEBI under the Depositories Act and the SEBI regulations. Operating without SEBI registration is not allowed, and RBI is not the registering authority for depositories.

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