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

Which of the following is a condition for an entity to be eligible to act as a depository under the Depositories Act and SEBI regulations?

A depository must be a company incorporated under the Companies Act, 2013 and must obtain a certificate of registration from SEBI after meeting the prescribed requirements, such as net worth. Partnerships, trusts or banks as such are not the prescribed form.

  1. AIt must be a company formed and registered under the Companies Act and hold a certificate of registration from SEBICorrect
  2. BIt must be a partnership firm approved by the stock exchange
  3. CIt must be a trust registered with the RBI
  4. DIt must be a bank licensed by the RBI to hold securities

Explanation

A depository must be a company incorporated under the Companies Act, with prescribed minimum net worth, and be granted a certificate of registration by SEBI. It is not a partnership, a trust or necessarily a bank; the other options describe entities not contemplated by the Act.

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