NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
Which of the following is a key benefit of a depository system for investors compared with holding physical share certificates?
A key benefit is the elimination of risks tied to physical certificates, such as forgery, theft, loss, and bad delivery. Electronic holding also speeds settlement and transfer. It does not guarantee returns, waive charges, or protect investors from market price movements.
- AElimination of risks such as forgery, theft and loss of certificates and bad deliveryCorrect
- BA guaranteed return on all securities held
- CExemption from all charges on transfer
- DImmunity from market price fluctuations
Explanation
Holding securities in electronic form removes the risks of loss, theft, forgery and bad delivery associated with paper certificates. It does not guarantee returns, remove charges or protect against price changes.
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