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CS Executive · Capital Market and Securities Laws · Laws Governing Depositories and Depository Participants

A newly set up depository wants to specify how it will convey information on dividend declarations and shareholder meetings to participants and beneficial owners. Under the Depositories Act, 1996, where must this procedure be provided?

The procedure must be in the depository's bye-laws, made with SEBI's previous approval. The Act requires bye-laws to cover how information on dividend declaration, shareholder meetings and other matters of interest is conveyed to participants and beneficial owners.

  1. AIn the depository's bye-laws, made with the previous approval of SEBICorrect
  2. BIn the issuer's articles of association only
  3. CIn an agreement between each beneficial owner and the issuer
  4. DIn the Companies Act rules framed by the Central Government

Explanation

The Act lists, among matters the bye-laws must provide for, the procedure for conveying information to participants and beneficial owners on dividend declaration, shareholder meetings and other matters of interest. Bye-laws are made with the previous approval of the Board (SEBI) and must be consistent with the Act and regulations.

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