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

Mrs. Meera Iyer opens a demat account through a Depository Participant (DP). With which entity does she enter into the agreement for the account, and what does the DP act as?

The investor signs the account-opening agreement with the Depository Participant, which acts as an agent of the depository. The DP is the intermediary offering depository services to investors; the issuer and SEBI are not parties to this agreement.

  1. AShe signs with the DP, which acts as an agent of the depositoryCorrect
  2. BShe signs directly with the depository, and the DP is only a stock broker
  3. CShe signs with the issuer company, and the DP acts as its registrar
  4. DShe signs with SEBI, and the DP acts as its regulator

Explanation

The investor enters into an agreement with the DP, which is an agent of the depository and the intermediary through which depository services are offered. Neither the issuer nor SEBI is a party to the account-opening agreement.

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