NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
Mr. Arjun Mehta wants to know which entity maintains his demat account and acts as the agent of the depository in dealing with him. Which entity does this?
The Depository Participant maintains the demat account. A DP acts as the depository's agent and is the intermediary through which investors access depository services, including account opening, transfers, dematerialisation and pledge, since investors cannot deal with the depository directly.
- AThe Depository ParticipantCorrect
- BThe issuer company's registrar
- CThe stock exchange
- DThe clearing member of the exchange
Explanation
A Depository Participant (DP) is the agent of the depository and the link between the depository and investors. It opens and maintains demat accounts and processes instructions. Registrars, exchanges and clearing members do not maintain beneficial owner accounts in this manner.
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