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

Mr. Sanjay Iyer says that his Depository Participant is the entity that actually maintains the master record of all securities held by investors across India. Which statement correctly corrects this understanding?

The depository maintains the master record of securities holdings, while the Depository Participant acts as its agent and the investor's point of contact. The DP opens accounts and processes instructions, but records sit with the depository such as NSDL or CDSL.

  1. AThe depository maintains the master record of holdings, while the DP acts as its agent and the investor's interfaceCorrect
  2. BThe DP maintains the master record and the depository only audits it
  3. CThe stock exchange maintains the master record for all demat holders
  4. DThe issuer company's registrar alone maintains all electronic holdings

Explanation

Depositories such as NSDL and CDSL hold the electronic records of beneficial owners' holdings, and DPs are intermediaries that offer depository services to investors as agents of the depository. The other options assign the record-keeping role to the wrong entities.

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