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CS Executive · Capital Market and Securities Laws · Basics of Capital Market

Rahul holds dematerialised shares. His account is opened with a SEBI-registered entity that acts as an agent of the depository and gives him access to depository services such as holding and transferring securities electronically. In depository terminology, this entity is a:

The entity is a depository participant. A depository participant acts as an agent of the depository and is the link between the depository and investors, opening demat accounts and processing holding and transfer of securities electronically. A clearing member relates to trade settlement, not demat account services.

  1. ADepository participantCorrect
  2. BClearing member
  3. CSub-broker of the depository
  4. DCustodian of the depository

Explanation

A depository participant is the agent of the depository through whom investors access depository services and open demat accounts. A clearing member deals with settlement of trades on the exchange side. The other options are not the standard term for the depository's investor-facing agent.

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