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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository

Under the depository system in India, in whose name are securities held in the depository's records when an investor holds them in a demat account with a Depository Participant (DP)?

The depository is the registered owner of dematerialised securities in the issuer's records, while the investor is the beneficial owner entitled to dividends, bonus and other benefits. The DP merely acts as the depository's agent and the stock exchange plays no ownership role.

  1. AThe depository is the registered owner and the investor is the beneficial ownerCorrect
  2. BThe DP is the registered owner and the investor is the beneficial owner
  3. CThe investor is both the registered owner and the beneficial owner
  4. DThe stock exchange is the registered owner and the investor is the beneficial owner

Explanation

In a depository system the securities are registered in the name of the depository as the registered owner, while the investor is the beneficial owner entitled to all rights and benefits. The DP is only an agent of the depository and does not own the securities. The exchange has no ownership role.

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