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NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

Which statement correctly describes the position of the registered owner and beneficial owner when securities are held in a depository?

For dematerialised securities, the depository appears as the registered owner in the issuer's records, while the investor is the beneficial owner. The investor receives all rights and benefits, such as dividends and voting. The depository holds only a nominal ownership role and cannot exercise rights over those securities.

  1. AThe depository is the registered owner in the issuer's records, while the investor is the beneficial ownerCorrect
  2. BThe investor is both registered owner and beneficial owner, and the depository has no entry
  3. CThe DP is the registered owner and the depository is the beneficial owner
  4. DThe registrar is the registered owner and the investor has no rights

Explanation

Under the Depositories Act, the depository's name appears as registered owner in the issuer's register for dematerialised securities, but it has no voting or other rights. The investor is the beneficial owner entitled to all benefits such as dividends and voting. The other options misassign these roles.

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