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

Ms. Kavita Rao wants to know who the legal owner of her dematerialised shares is in the records of the issuer company. Under the depository system, whose name appears as the registered owner in the company's register of members?

The depository appears as the registered owner in the issuer's register, while Kavita is the beneficial owner. The depository holds legal title only as a custodian-like record keeper; the investor enjoys all the benefits of ownership, such as dividends, bonus and voting rights.

  1. AThe depository, as registered owner, while Kavita is the beneficial ownerCorrect
  2. BKavita Rao, as both registered and beneficial owner
  3. CThe Depository Participant, as nominee of the investor
  4. DThe clearing member through whom the shares were bought

Explanation

In a depository, securities are held in the name of the depository as registered owner, while the investor is the beneficial owner with all rights and benefits such as dividends and voting. The DP and clearing member are not owners.

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