NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
Which of the following is a recognised benefit of the depository system over holding physical share certificates?
The depository system eliminates physical certificate risks such as forgery, loss, theft and bad delivery, because holdings are maintained electronically. It does not guarantee returns or waive brokerage, and investors still trade through brokers.
- AElimination of risks such as bad delivery, forgery and loss of certificatesCorrect
- BGuaranteed capital appreciation on demat shares
- CExemption from brokerage on all trades
- DRemoval of the need for any account with a broker
Explanation
Holding securities electronically removes risks tied to physical certificates, such as forgery, theft, loss and bad delivery. It does not guarantee returns, waive brokerage or remove the need for trading arrangements through a broker.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to Depository shows your real accuracy, how long you take and where you lose marks.
More Introduction to Depository questions
- 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?
- Ms. Rao, a new investor, asks about the minimum requirement to hold securities in a depository. Which statement is correct?
- Mr. Arvind Menon asks why a depository is considered to reduce risks such as bad delivery and forged transfers that arose in physical share …
- Which of the following best describes the legal position of a depository in India with respect to the securities held in a beneficial owner'…
- Which of the following is the primary function of a depository in the Indian securities market?
- Mr. Arvind Mehta wants to know who the legal owner of his shares is recorded as in the company's register of members when his shares are hel…