NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners
Mr. Arjun Mehta wants to open a demat account. With which of the following does he enter into an agreement when the account is opened?
Arjun enters into an agreement with the Depository Participant when he opens the demat account. This agreement sets out the rights and obligations of both investor and DP. He does not sign with issuers, the clearing corporation or the Registrar of Companies.
- AThe Depository ParticipantCorrect
- BThe issuer of every security he will hold
- CThe clearing corporation
- DThe Registrar of Companies
Explanation
The investor signs the account opening form and a standard agreement with the DP, which sets out the rights and duties of both. The investor does not contract separately with each issuer, the clearing corporation or the Registrar of Companies for this purpose.
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