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

In the depository system, who is recorded in the issuer company's register of members as the registered owner of dematerialised securities, and who is the beneficial owner?

The depository appears in the issuer's register as the registered owner, while the investor is the beneficial owner entitled to dividends, bonus and other benefits. The depository holds the securities only as a nominal custodian and has no beneficial interest in them.

  1. AInvestor is registered owner; the depository is beneficial owner
  2. BDepository is registered owner; the investor is beneficial ownerCorrect
  3. CDepository participant is registered owner; the issuer is beneficial owner
  4. DClearing corporation is registered owner; the investor is beneficial owner

Explanation

For securities held in a depository, the depository's name appears in the issuer's register as registered owner, while the investor retains all rights and benefits as beneficial owner. The depository therefore has no beneficial interest in the securities. Option one reverses the roles.

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