NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository
Which of the following is a recognised benefit to an investor of holding securities in dematerialised form compared with physical form?
Holding securities in demat form reduces the risks of loss, theft, forgery and bad delivery, and speeds up transfer and settlement. It does not eliminate charges, guarantee returns or exempt gains from tax, which remain unaffected by the form of holding.
- AElimination of all brokerage and DP charges
- BGuaranteed returns on the securities held
- CReduced risk of loss, theft, forgery and delays in transferCorrect
- DExemption from capital gains tax on sale of securities
Explanation
Demat removes risks like bad delivery, forged transfers, theft and loss, and speeds up transfer. It does not remove charges, guarantee returns, or give tax exemption, so those options are wrong.
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