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

Mrs. Meera Nair holds shares in her demat account, and the company is registered as the issuer. In depository records, who is shown as the registered owner and who as the beneficial owner of these shares?

The depository is the registered owner in the issuer's records, while Meera is the beneficial owner. The depository holds legal title as a nominal holder, but all benefits such as dividends, bonus and voting rights belong to Meera as the beneficial owner.

  1. ADepository is the registered owner; Meera is the beneficial ownerCorrect
  2. BMeera is both registered and beneficial owner
  3. CThe DP is the registered owner; the depository is the beneficial owner
  4. DThe issuer is the registered owner; the DP is the beneficial owner

Explanation

When securities are dematerialised, the name of the depository appears in the issuer's register as registered owner, while the investor retains all rights and benefits as beneficial owner. Hence Meera enjoys dividends and voting rights, but legal title in the register is with the depository.

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