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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market

Ms. Kavita Rao wants to buy shares of a listed company on the NSE and hold them in electronic form. Which entity maintains the electronic records of her securities holdings so that ownership can be transferred without physical certificates?

A depository, acting through its depository participant, maintains the electronic records of an investor's securities. This allows ownership to be transferred by book entry without physical certificates. Clearing corporations only settle trades, and auditors or merchant bankers do not maintain demat holdings.

  1. AA depository, through its depository participantCorrect
  2. BThe stock exchange clearing corporation only
  3. CThe issuer company's statutory auditor
  4. DThe merchant banker to the issue

Explanation

In India, securities in dematerialised form are held as electronic records in accounts maintained with a depository (NSDL or CDSL) through depository participants. Clearing corporations handle settlement of trades, not the maintenance of investor holding records. Auditors and merchant bankers have no role in maintaining demat holdings.

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