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

Mr. Sameer Joshi has securities in a demat account with a DP of NSDL. He wants to understand which entity is responsible for maintaining the records of holdings and balances of beneficial owners at the investor level. Which is correct?

Investor demat accounts are opened and serviced through the Depository Participant using the depository's system, while the depository maintains the electronic master record of balances. The issuer's register shows only the depository as registered owner, and clearing corporations do not keep ownership records.

  1. AThe depository maintains the records of all investors' holdings, while the DP maintains none
  2. BThe Depository Participant maintains the investor-level account records through the depository's system, with the depository keeping the master record of balancesCorrect
  3. CThe issuer company alone maintains investor balances after dematerialisation
  4. DThe clearing corporation maintains all demat balances

Explanation

Investor accounts are opened through DPs who operate them via the depository's system, and the depository maintains the electronic record of balances in each beneficial owner's account. The issuer's register shows only the depository as registered holder, and clearing corporations do not hold demat balances as records of ownership.

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