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

A stockbroker, Meridian Securities, wants to also act as a DP of a depository. Which statement correctly describes the requirement and relationship under the depository framework?

A broker wanting to act as a DP must obtain registration from SEBI and enter into an agreement with the depository, becoming the depository's agent. Exchange membership alone does not suffice, and the DP is neither registered with RBI nor appointed by individual investors or issuers.

  1. AIt must be registered with SEBI as a DP and enter into an agreement with the depository, and it acts as the depository's agentCorrect
  2. BIt need only be a member of the stock exchange; no separate registration is needed
  3. CIt must be registered with RBI and then acts as an agent of the issuer
  4. DIt may act as a DP only after being appointed by each investor individually

Explanation

A DP must hold SEBI registration under the Depositories and Participants framework and sign an agreement with the depository, acting as its agent. Exchange membership alone is not enough. RBI registration is not the route, and DPs are not appointed by individual investors or as issuer agents.

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