CS Professional · Strategic Management and Corporate Finance · Role of Intermediaries in Fund Raising
In the Indian securities market, which entity is the depository participant (DP) primarily an agent of?
A depository participant is an agent of the depository. It offers depository services such as demat account opening, holding and transfer of securities to investors. It is not an agent of the stock exchange, the issuer company or the RBI.
- AThe depository, through which investors access its servicesCorrect
- BThe stock exchange on which the investor trades
- CThe issuer company whose shares are held
- DThe Reserve Bank of India
Explanation
Under the Depositories Act, a DP acts as an agent of the depository and offers its services to investors. It is not an agent of the exchange, the issuer or the RBI. The investor opens a demat account with the DP, which links the investor to the depository.
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