Skip to content

CS Executive · Capital Market and Securities Laws · Laws Governing Depositories and Depository Participants

Under the Depositories Act, 1996, which of the following is a matter on which depository bye-laws must provide?

Depository bye-laws must provide for the procedure of proceeding against a participant who breaches the regulations, including suspension, expulsion and cancellation of the agreements entered with the depository. Taxation, offer pricing and issuer director qualifications fall under other laws and are not bye-law matters.

  1. AThe rate of income tax on dividends distributed to beneficial owners
  2. BThe procedure for proceeding against a participant committing breach of the regulations, including suspension, expulsion and cancellation of agreements with the depositoryCorrect
  3. CThe price at which issuers must offer shares to the public
  4. DThe qualifications of directors of issuer companies

Explanation

Section 26(2)(o) requires bye-laws to cover the procedure against a participant in breach, with suspension, expulsion and cancellation of agreements. Tax rates, public offer pricing and issuer director qualifications are governed by other laws, not depository bye-laws.

Did you get it right without looking?

One question tells you little. A timed set on Laws Governing Depositories and Depository Participants shows your real accuracy, how long you take and where you lose marks.

Practise Laws Governing Depositories and Depository ParticipantsFree diagnostic mock

More Laws Governing Depositories and Depository Participants questions