NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
Which of the following best describes the role of a Depository Participant (DP) in relation to the depository?
A Depository Participant is an agent of the depository, serving as the link between the depository and investors. Through the DP, investors open demat accounts, dematerialise securities and transfer holdings. A DP is not a regulator, an issuer or a settlement guarantor.
- AAn agent of the depository that offers depository services to investorsCorrect
- BA regulator that supervises the depository on behalf of SEBI
- CAn issuer that allots securities directly to investors
- DA clearing member that guarantees settlement of trades
Explanation
A DP acts as an agent of the depository and is the intermediary through which investors access depository services such as account opening, demat and transfers. It does not regulate the depository, issue securities or guarantee trades.
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