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

Under the Depositories Act, 1996, when securities of an investor are held in a depository, who is the registered owner and who is the beneficial owner in the issuer's records?

The depository is the registered owner in the issuer's records, while the investor is the beneficial owner entitled to the rights and benefits of the securities. The depository has no beneficial interest, and the Depository Participant is merely an agent.

  1. AThe investor is both registered owner and beneficial owner
  2. BThe depository is the registered owner and the investor is the beneficial ownerCorrect
  3. CThe Depository Participant is the registered owner and the investor is the beneficial owner
  4. DThe issuer is the registered owner and the investor is the beneficial owner

Explanation

The depository's name appears in the issuer's register as the registered owner, while the investor retains all rights and benefits as the beneficial owner. The depository holds no beneficial interest. The DP is only an intermediary and does not appear as the owner.

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