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

Mrs. Sunita Iyer asks a DP what advantage dematerialisation gives her compared with physical certificates. Which is a genuine advantage of holding securities in demat form?

The key advantage is removal of risks tied to physical certificates, including loss, theft, forgery, mutilation and delayed transfers, along with reduced paperwork and faster settlement. Demat does not guarantee profits, raise market prices or waive DP charges, which remain payable as per applicable tariffs.

  1. AElimination of risks such as loss, theft, forgery and delay in transfer of certificatesCorrect
  2. BAssured profit on securities held in electronic form
  3. CExemption from paying any charges to the DP
  4. DAutomatic increase in the market value of holdings

Explanation

Demat removes risks linked to physical certificates such as loss, theft, forgery and transfer delays, and reduces paperwork. It neither assures profit nor raises market value, and DPs may charge fees under the tariff permitted by the regulations.

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