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NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

Ms. Anita Rao's company Shree Textiles Ltd has signed up with a depository so that its shares can be held in dematerialised form. In this arrangement, which party is referred to as the 'issuer' in the depository's business partner framework?

The issuer is the company whose securities are admitted to the depository, here Shree Textiles Ltd. It signs an agreement with the depository, usually via its registrar. The DP, clearing member and investor play other roles such as agent, settlement intermediary and beneficial owner.

  1. AThe company whose securities are admitted to the depositoryCorrect
  2. BThe DP through which the shares are held
  3. CThe clearing member who settles the trades
  4. DThe investor holding the shares as a beneficial owner

Explanation

The issuer is the company that issues the securities and enters into an agreement with the depository to admit them. The DP is an agent of the depository, the clearing member handles settlement, and the investor is the beneficial owner. So only the company fits the issuer role.

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