CMA Intermediate · Financial Management and Business Data Analytics · Financial Institutions
Under the Indian securities market structure, which of the following is a function of a depository such as NSDL or CDSL?
A depository holds securities in dematerialised form and facilitates their transfer through book entries via depository participants. It does not set the repo rate, which the RBI does, nor underwrite issues, nor regulate exchanges, which is SEBI's role.
- AHolding securities in dematerialised form and enabling their transfer by book entryCorrect
- BFixing the repo rate for banks
- CUnderwriting public issues of equity shares
- DRegulating stock exchanges and framing market rules
Explanation
A depository holds investors' securities in electronic form and effects transfers through book entries, through depository participants. Repo rate is set by the RBI, underwriting is done by underwriters, and regulation of exchanges is done by SEBI.
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