NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners
A listed company wants to admit its securities to a depository so they can be held in dematerialised form. Which party does the company need to enter into a tripartite arrangement with for this purpose?
The issuer must sign an agreement with the depository along with its Registrar and Transfer Agent. This tripartite arrangement links the issuer's records with the depository so that securities can be dematerialised and held electronically. Stock exchanges, SEBI and clearing members are not parties.
- AThe depository and its own Registrar and Transfer AgentCorrect
- BThe depository and the stock exchange
- CSEBI and the depository
- DThe clearing member and the depository participant
Explanation
For admitting securities, the issuer signs an agreement with the depository, and the issuer's RTA is also a party. This tripartite agreement establishes electronic connectivity between issuer, RTA and depository. Exchanges, SEBI and clearing members are not parties to it.
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