Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Operational Aspects of Investment Management

An investment adviser's client wants to hold securities in dematerialised form. Which statement about the role of a depository participant (DP) is correct?

A depository participant is an intermediary between the depository and the investor and maintains the investor's demat account. It handles account opening and transfers. Settlement guarantee belongs to the clearing corporation, and price discovery belongs to the exchange.

  1. AA DP is an intermediary between the depository and the investor and maintains the investor's demat accountCorrect
  2. BA DP guarantees the settlement of trades done on the exchange
  3. CA DP issues the securities on behalf of the company
  4. DA DP fixes the price at which the demat securities are traded

Explanation

A depository participant is the agent of the depository and the link between the depository and the investor. It opens and services demat accounts and processes transfers. Guaranteeing settlement is done by the clearing corporation, issuance by the issuer, and price discovery by the exchange.

Did you get it right without looking?

One question tells you little. A timed set on Operational Aspects of Investment Management shows your real accuracy, how long you take and where you lose marks.

Practise Operational Aspects of Investment ManagementFree diagnostic mock

More Operational Aspects of Investment Management questions