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

Ms. Kavita Rao holds shares of an Indian listed company in dematerialised form. In whose name are these shares legally registered in the company's register of members, under the depository system?

The depository is the registered owner in the issuer's records, while the investor is the beneficial owner entitled to all rights and benefits of the securities. The DP only acts as the depository's agent and is not the registered owner.

  1. AThe depository, as registered owner, while Ms. Rao is the beneficial ownerCorrect
  2. BThe depository participant, as registered owner, while Ms. Rao is the beneficial owner
  3. CMs. Rao, as both registered owner and beneficial owner
  4. DThe clearing corporation, as registered owner, while Ms. Rao is the beneficial owner

Explanation

In a depository system, securities are held in fungible form and the depository's name appears in the issuer's register as the registered owner. The investor remains the beneficial owner with all rights and benefits. The DP is only an agent of the depository and is not the registered owner.

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