CH 9 - DEPOSITORY SYSTEM

S.Y.J.C. (Commerce) Prof.
Vijay Patil
CHAPTER 9 - DEPOSITORY SYSTEM
Q.1. What is Depository System? Explain its Advantages.

Ans: MEANING:
Under depository system, securities are held in electronic form. The transfer
& settlement of securities are done electronically. The depository system
maintains accounts of the shareholder, enables transfer, collects dividend, bonus
shares, etc. on behalf of the shareholder.
ADVANTAGES:
Depository system is advantageous to Investors & Companies:
A] TO INVESTORS:
1. Facility of nomination:
 The Depository System allows individual investors to avail the nomination
facility.
 In case of death of investor, securities are transferred to the account of
nominees.
2. Automatic Credit / Debit:

 The account of investor is automatically credited / debited in case of a
change by the company.
 This is called ‘Corporate Action’.
 Example: Payment of dividend, issue of bonus shares, offering of rights
shares, etc.
3. Risk elimination:
 All risks associated with physical certificates like delays, loss, bad delivery,
etc. are totally eliminated with depository system.
4. Security against loan:

 Banks and financial institutions also provide loans against demterialised
securities as a security.
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S.Y.J.C. (Commerce) Prof. Vijay Patil
5. Assure safety:
 The depository system is the safest and secure way of folding securities. The
entire system functions under the Depository Act and is monitored by SEBI.
6. No concept of lots:
 In the physical mode, it was compulsory to buy shares in certain lots i.e.
lot of 10, lot of 100, etc.
 This system of lots has been abolished with depository system.
 The market lot is one share for depository system.
7. Easy transfer of shares:

 It does not require filing transfer forms and loading of documents.
 Also stamp duty levied on transfer of physical shares is not applicable.
FARSAN Easy
F - Facility of nomination
A - Automatic Credit / Debit
R - Risk elimination
S - Security against loan
A - Assure safety
N - No concept of lots
Easy - Easy transfer of shares
B] TO COMPANIES:
1. Better investor-company relationships:
 The complaints like loss of certificates, signature of difference, etc. is
reduced.
 It leads to better communication with investors.
 It increased goodwill for the company.
2. Reduction in costs and efforts:

 Costs, efforts, time involved in printing & distribution of certificates in cases
of new issues, bonus, transfers, etc. is saved.
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3. Up-to-date information:
 The up-to-date information about investors is provided by the depository.
4. International investment:
 Under depository system, better & quick services can be provided.
 And this attracts international investment.
C] CONCLUSION:
The depository is the custodian of the securities in electronic form.
BRU Inter
B - Better investor-company relationships

R - Reduction in costs and efforts
U - Up-to-date information
Inter - International investment
Q.2. Explain the Constituents of Depository System.

Ans: A] MEANING:
B] CONSTITUENTS OF DEPOSITORY SYSTEM:

1. Depository:
 It is an organisation where securities are held in electronic form at investor’s
request.
 It also provides different services related to different transactions in such
securities.
 It is responsible for safe-keeping of the investor’s securities.
 There is no direct access of investor with the depository.
 It works as a link between the company and investors.
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2. Depository Participant [DP]:

 It is an intermediary appointed by depository.
 DP acts as a link between depository and the investor.
 It directly deals with customers. It sends statement of accounts periodically.
 DP maintains account of securities of each investor. It facilitates
dematerialisation.
 Financial institutions, Banks, Approved Foreign Banks, Custodians, Stock
Brokers, Clearing Corporation, Non-Banking Financial Corporations,
Register & Share Transfer agents can work as DPs.
3. Beneficial Owner [BO]:

 BO is the investor of securities who has availed the services of DPs.
 BO is entitled to all rights and benefits and is subject to all liabilities with
respect to securities held by depository.
 BO can also be called as client of Depository and DP.
 BO client is required to open a Demat A/c with the DP for electronic holding
of securities.
 BO is given a unique account number.
4. Issuer company:
 It is the company which has issued securities which are dematerialised.
 It must register with depository.
C] CONCLUSION:
The depository is the custodian of the securities in electronic form.
Q.3. Write a note on ‘Depositories in India’.

Ans: A] MEANING:
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B] TYPES:
1. National Security Depository Limited [NSDL]:
 NSDL is the first and largest Depository in India established in Nov., 1996.
 It is promoted by IDBI, unit Trust of India & National Stock Exchange.
 NSDL has its headquarters in Mumbai. It is a Public Limited Company.
 NSDL provides various services to investors and other players.
 It renders services like account maintenance, dematerialization and
rematerialization, nomination, transmission, dividend distribution, investor
grievances, etc.
2. Central Depository Services Limited [CDSL]:

 CDSL began its operations in Feb., 1999.
 It was promoted by Bombay Stock Exchange jointly with several banks.
 It has its headquarters in Mumbai.
 CDSL has wide DP network.
 It offers the Demat services similar to NSDL across the country.
C] CONCLUSION:
Both these institutions have played a tremendous role in success of
depository system in India.
Q.4. Write a short note on the terms / concepts related to depository system.
Ans: A] MEANING:
B] TERMS / CONCEPTS RELATED TO DEPOSITORY SYSTEM:

1. Dematerialisation [Demat]:
 The process of conversion of physical certificates into electronic mode is
called Dematerialisation.
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 It uses Dematerialisation Request Form [DRF] from investor to the DP.

 This is an initial process. It is a primary & principal function of the
depository.
 Demated Securities have no distinctive numbers.
 It is an easy process. Also it is not a time consuming process.
2. Rematerialization [Remat]:
 The process of conversion of electronic holding of securities into physical
certificates is called as Rematerialization.
 It uses Rematerialization Request Form [RRF].
 This is a reverse process. It is a secondary and supporting function of
depository.
 Remated securities have distinctive numbers.
 Remat is not only a time consuming but also a complex process.
3. Fungibility:
 In financial terms, Fungibility means state of being interchangeable.
 Some financial assets are fungible while some are not fungible.
 Securities held in demat / electronic form are fungible.
 They are interchangeable, substitutable and cannot be distinguished from
each other.
 Securities bear no features like distinctive number, certificate number or
folio number.
4. International Securities Identification Number [ISIN]:

 It is a standard numbering system which is accepted globally.
 In India, ISINs are assigned by SEBI to NSDL. SEBI works as National
Numbering Agency [NNA] in India.
 For government securities, allotment of ISIN is done by the RBI.
 ISIN consists of 12 digits alpha-numeric code which is divided in three
parts.
 Company has to apply for ISIN for its securities with documents like
prospectus.
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Q.5. What is Dematerialisation? Explain the procedure of Dematerialisation.

Ans: A] MEANING:
The process of conversion of physical certificates into electronic mode is
called as Dematerialisation.
B] METHODS OF DEMATERIALISATION:
The process of conversion is different as per different situations which as
follows:
1. In case of Conversion of Physical Certificates into Electronic Form:
 Investor submits 3 copies of DRF & physical certificates to DP.
 DP enters the demat request in its system and sends it to depository.
 DP dispatches the physical certificates and copy of DRF to the issuer.
 The issuer verifies & confirms to depository about demating of the
securities.
 Depository records the request in the system and forwards it to the issuer.
 Depository credit demated securities to Demat A/c of investor. Depository
intimates the DP.
 DP issues a statement of account to the investor.
2. In case of Initial Public Offer [IPO]:

 The investor [BO] submits his application for securities to the issuer
company.
 The issuer company verifies details of BO with the depository.
 After verification of BO details, the depository gives its report to the issuer
company.
 Issuer Company gives details of allotment of securities to depository.
 Depository credits the account of BO.
 Depository intimates the DP about crediting BO’s account.
 DP issues statement of account to BO.
C] CONCLUSION:
Under Depository System, the transfer & settlement of securities are done
electronically.
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Q.6. Distinction Between:
Dematerialisation Rematerialisation
1. Meaning:
The process of conversion of physical The process of conversion of electronic
certificates into electronic mode is called holding of securities into physical
as Dematerialisation. certificates is called as Rematerialization.
2. Use of Form:
It uses Dematerialisation Request Form It uses Rematerialization Request Form
[DRF] from investor to the DP. [RRF].
3. Sequence:
This is an initial process. It is a primary & This is a reverse process. It is a secondary
principal function of the depository. and supporting function of depository.
4. Identification:
Demated Securities have no distinctive Remated securities have distinctive
numbers. numbers.
5. Complex Degree:
It is an easy process. Also it is not a time Remat is not only a time consuming but
consuming process. also a complex process.
6. A Liquidity:
Dematerialisation helps in increasing Rematerialisation reduces liquidity.
liquidity.
OBJECTIVE TYPE QUESTIONS
A) Select the correct option and rewrite the statements.

1. In physical mode, securities are held in ____________ form.
(a) Paper (b) Dematerialization (c) Electronic
2. Risk of losing certificates exist in ____________ mode.

(a) Physical (b) Dematerialization (c) Digital
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3. In Depository system, securities are held in ____________ form.

(a) Scrip based (b) Electronic (c) Physical
4. ____________ is the institute which facilitates electronic holding of securities.

(a) Depository Participant (b) Issuer (c) Depository
5. There is no payment of ____________ when securities are demated.

(a) Octroi (b) Wealth Tax (c) Stamp Duty
6. Depository Act was passed in ____________

(a) 1919 (b) 1996 (c) 1999
7. India has a ____________ depository system.

(a) Sole (b) Multi (c) Single
8. ____________ is a constituent of depository system.

(a) Government (b) Issuer (c) Trust
9. ____________ is the oldest depository in India.

(a) Dow Jones (b) NSDL (c) CDSL
10. Demat account is opened by ____________

(a) Beneficial owner (b) CDSL (c) SEBI
11. Demated shares are ____________

(a) Non-transferable (b) Fungible (c) Bearer
12. ____________ is a unique code given to a security.

(a) IBM (b) BBM (c) ISIN
13. In India ISIN for corporate securities is allotted by ____________

(a) NSDL (b) Central Government (c) State Government
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14. ____________ has to apply for ISIN.

(a) Company (b) Depository Participant (c) Depositors
15. ____________ has to pay charges to maintain Demat Account.

(a) Investor (b) Issuer (c) Depositor
16. NSDL is promoted by ____________

(a) NSE (b) BSE (c) FTSE
17. CDSL is promoted by ____________

(a) NSE (b) BSE (c) FTSE
18. Depository Participant has ____________ for identification.

a. ID Nos. b. PAN c. Index No.
19. An institution which regulates and controls the activities of the stock exchange is
called ____________
a. NSE b. BSE c. SEBI
B) Write a word or a term or a phrase:
1. This mode of holding securities may result in Physical mode of

loss and theft of certificates. securities
2. The organization holds the securities in Depository
electronic mode.
3. This system eliminates storing of certificates. Depository system
4. This system allows faster and easier transfer of Depository system
securities.
5. The oldest Depository of India. NSDL
6. The country where the Depository system Germany
started for the first time.
7. The registered owner of securities. Beneficial Owner
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8. The agent of the Depository. Depository Participant

9. This process converts securities into an Dematerialization
electronic form from a physical form.
10. This process converts securities into physical Rematerialization
form from electronic form.
11. This means securities are without distinctive Fungibility
identity numbers.
12. This is the unique code for security given in the International Securities
Depository system. Identification Number
13. The organisation which acts as an intermediary Depository Participant
between investors & depositories.
14. A Depository promoted by BSE jointly with CDSL
several banks.
15. The trade done through stock brokers on a Market Trade
Stock Exchange.
C) State whether the following statements are True or False.

1. The physical mode of holding Securities is risky. True
2. Allotment of Securities takes a longer time when in physical mode. True
3. Transfer of Securities is easier in electronic mode. True
4. Bad delivery is likely in the Depository system. False
5. The depository system began in the USA for the first time in the False
world.
6. India has a multi-depository system. True
7. The depository system is very similar to the banking system. True
8. DP is a constituent of the Depository system. True
9. DP is an Agent of the Depository. True
10. A bank can work as a DP. True
11. DRF is required for conversion from physical to electronic. True
12. ISIN is a unique code given to the specific Securities. True
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D) Find the odd one:

1. Elimination of storage of certificates, theft of certificates, torn certificates.
2. NSDL, CDSL, NBFC.
3. Depository, DP, RBI.
4. DP, BO, State Government.
5. Issuer, BO, Central Government
6. DRF, RRF, PPF.
E) Complete the sentences:

1. Central location for keeping Securities in demated form Depository
is ____________.
2. Freezing of debit/credit of Securities is possible in Dematerialized
____________. Securities
3. First Depository of the world started in the year 1947
____________.
4. The Indian Depository Act was passed in the year 1996
____________.
5. Link between Depository and investor is ____________. Depository
participant
6. Account of Securities of the investor is maintained by Depository
____________. Participant
7. The process which converts physical Securities in Dematerialization
electronic form is ____________.
8. The process which converts digital Securities in physical Rematerialization
form is ____________.
9. The issuer company must register with ____________. Depository
10. The unique code identifying a security is ____________. ISIN
11. The first Depository of India is ____________. NSDL
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F) Select the correct option from the bracket.

(1999, Agent of Depository, Germany, Physical to electronic)
Sr. Sr.
Group ‘A’ Group ‘B’
No. No.
1) Dematerialization a) ………………………….
2) …………………………. b) DP
3) First Depository of world c) ………………………….

4) CDSL d) ………………………….
Ans:
Sr.
Group ‘A’ Ans.
No.
1) Dematerialization Physical to Electronic
2) Agent of Depository DP
3) First Depository of world Germany
4) CDSL 1999
G) Correct the underlined words and rewrite the following sentences.
1. The electronic mode of holding Securities is risky. physical

2. Allotment and Transfer of Securities are time- physical
consuming in electronic mode.
3. Banking system leads to a script less capital Depository
market.
4. Storage of certificates is not required in electronic
the physical mode of holding.
5. India has a single Depository system. multi
6. Depository participant in India has to register under Depository Act
the Partnership Act.
7. Demat accounts are opened and maintained by Depository
the Depository. Participant
8. Securities are fungible in physical mode. Electronic
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9. ISIN is a code given to a company. Security of company.

10. ISIN of Indian Government Securities is issued RBI
by NSDL.
H) Arrange in proper order:
1. Gets statement of Account, Open Demat Account, Submit DRF

Ans: Submit DRF, Open Demat Account, Gets statement of Account.
2. Investor (BO) submits an application for Securities to the issuer company,

Depository intimates the DP about crediting Bo’s Account, Issuer Company gives
details of allotment to Depository.
Ans: Investor (BO) submits an application for Securities to the issuer company,
Issuer Company gives details of allotment to Depository, Depository
intimates the DP about crediting BO’s Account.
3. Conversion of physical certificate into demat form –

i. Depository credits demated securities to BO’s A/c.
ii. Investor (BO) submits DRF in triplicate & Certificate to DP.
iii. Issuer confirms to Depository about Demating.
Ans: Conversion of physical certificate into demat form –
i. Investor (BO) submits DRF in triplicate & Certificate to DP.
ii. Depository credits demated securities to BO’s A/c.
iii. Issuer confirms to Depository about Demating.
I) Explain the following Concepts:

1. Depository System:
Ans: Explanation:
 Under depository system, securities are held in electronic form.
 The transfer & settlement of securities are done electronically.
 The depository system maintains accounts of the shareholder, enables transfer,
collects dividend, bonus shares, etc. on behalf of the shareholder.
 Depository system is advantageous to Investors & Companies
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2. Dematerialization:
Ans: Explanation:
 The process of conversion of physical certificates into electronic mode is called as
Dematerialisation.
 This is an initial process. It is a primary & principal function of the depository.
 Dematerialisation helps in increasing liquidity.
3. Rematerialization:
Ans: Explanation:
 This is a reverse process. It is a secondary and supporting function of depository.
4. Fungibility:
Ans: Explanation:
 In financial terms, Fungibility means state of being interchangeable.
 Some financial assets are fungible while some are not fungible.
 Securities held in demat / electronic form are fungible.
 They are interchangeable, substitutable and cannot be distinguished from each
other.
 Securities bear no features like distinctive number, certificate number or folio
number.
5. ISIN:
Ans: Explanation:
 It is a standard numbering system which is accepted globally.
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 In India, ISINs are assigned by SEBI to NSDL. SEBI works as National Numbering
Agency [NNA] in India.
 ISIN consists of 12 digits alpha-numeric code which is divided in three parts.
 Company has to apply for ISIN for its securities with documents like prospectus.
6. Depository Participant [DP]:

Ans: Explanation:
 DP maintains account of securities of each investor.
 It facilitates dematerialisation.
Brokers, Clearing Corporation, Non-Banking Financial Corporations, Register and
Share Transfer agents can work as DPs.
7. Beneficial Owner [BO]:

Ans: Explanation:
 BO is the investor of securities who has availed the services of DPs.
 BO is entitled to all rights and benefits and is subject to all liabilities with respect
to securities held by depository.
 BO can also be called as client of Depository and DP.
 BO client is required to open a Demat A/c with the DP for electronic holding of
securities.
 BO is given a unique account number.
J) Justify the following statement:

1. Electronic holding of securities is safer than physical holding.
Ans: This statement is True.
Explanation:
 Under Depository System, the transfer & settlement of securities are done
electronically.
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 Physical certificates can be lost, damaged, torn, stolen, misplaced during transit.
 Delivering such certificates creates problems in buying & selling of securities.
 Under Depository System, the transfer & settlement of securities are done
electronically.
 It leads to elimination of storage & handling of certificates.
 So, all risks related to physical holding are eliminated by electronic holding of
securities.
 Hence, electronic holding of securities is safer than physical holding.
--------------------------------------------------------------------------------------------------------------------------------
2. Depository system is very similar to banking system.

Explanation:
 As a bank keeps the money safe. Similarly, a depository system keeps the
securities safe.
 As a bank, accounts having unique numbers. Similarly, in depository system,
securities are held in accounts having unique IDs.
 Like a bank, there is no physical handling of securities during allotments,
transfer, etc.
--------------------------------------------------------------------------------------------------------------------------------
3. Depository provides easy and quicker transfer of shares.

Explanation:
 It does not require filing transfer forms and loading of documents.
 Also stamp duty levied on transfer of physical shares is not applicable.
 The account of investor is automatically credited / debited in case of a change by
the company.
 This is called ‘Corporate Action’.
 Hence, Depository provides easy and quicker transfer of shares.
--------------------------------------------------------------------------------------------------------------------------------
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4. Depository system results in reduced time, cost and efforts.

Explanation:
 The complaints like loss of certificates, signature of difference, etc. is reduced.
 It leads to better communication with investors.
 It increased goodwill for the company.
 Costs, efforts, time involved in printing & distribution of certificates in cases of
new issues, bonus, transfers, etc. is saved.
 Hence, Depository system results in reduced time, cost and efforts.
--------------------------------------------------------------------------------------------------------------------------------
5. DP is an important constituent of depository system.

Explanation:
 DP maintains account of securities of each investor. It facilitates
dematerialisation.
Brokers, Clearing Corporation, Non-Banking Financial Corporations, Register &
Share Transfer agents can work as DPs.
 Hence, DP is an important constituent of depository system.
--------------------------------------------------------------------------------------------------------------------------------
6. Depository system allows both – physical to electronic and electronic to

physical conversion.
Explanation:
1. Dematerialisation [Demat]:
 The process of conversion of physical certificates into electronic mode is called
Dematerialisation.
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 This is an initial process. It is a primary & principal function of the depository.
--------------------------------------------------------------------------------------------------------------------------------
2. Rematerialization [Remat]:
 This is a reverse process. It is a secondary and supporting function of depository.
--------------------------------------------------------------------------------------------------------------------------------
7. ISIN is necessary component of demat.

Explanation:
 ISIN is a standard numbering system which is accepted globally.
 In India, ISINs are assigned by SEBI to NSDL. SEBI works as National Numbering
Agency [NNA] in India.
 ISIN consists of 12 digits alpha-numeric code which is divided in three parts.
 Company has to apply for ISIN for its securities with documents like prospectus.
 Hence, ISIN is necessary component of demat.
--------------------------------------------------------------------------------------------------------------------------------
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STUDY THE FOLLOWING CASE / SITUATION &

EXPRESS YOUR OPINION.
Q.1. Mr. Z holds 100 shares of peculiar Co. Ltd. In physical mode and wishes to
convert the same in electronic mode:
(a) Mr. Z holds a savings bank account with CFDH Bank Ltd. Can he deposit his
shares in this account for Demat?
Ans: No, Mr. Z cannot deposit his shares in saving bank account with CFDH Bank Ltd.
(b) What type of account is needed for the same?

Ans: A Demat A/c is needed for converting physical shares into electronic mode.
(c) Is it the RBI that will be the custodian of shares of Mr. Z after demating?
Ans: No, RBI will not be custodian of shares of Mr. Z. After demating, NSDL or CDSL
will be custodian of shares of Mr. Z.
--------------------------------------------------------------------------------------------------------------------------------
Q.2. Mr. R holds 100 shares of Peculiar Co. Ltd. In Demat mode.
(a) He wants to transfer one share each to his wife, daughter, and son. Can he
do so?
Ans: If Mr. R have a Demat A/c, then he can transfer one share each to his wife,
daughter and son.
(b) Does he need to submit DRF or DIS if he wants to transfer his shares?
Ans: DRF means Demat Requestion Form. DIS means Delivery Instruction Slip. So, he
has to submit DIS to transfer his shares.
(c) Can he nominate his wife in his Demat account?

Ans: So, Mr. R can nominate his wife in his Demat A/c.
--------------------------------------------------------------------------------------------------------------------------------
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3. Mrs. Z wishes to open a Demat account in her name.
(a) Can she open the account going to the Mumbai office of NSDL?
Ans: No, Mrs Z cannot open a Demat A/c by going to Mumbai Office of NSDL. She has
to open Demat A/c with Depository Participant.
(b) Is she required to pay for the opening of the account and its maintenance?
Ans: Yes, she has to pay for opening of account & its maintenance.
(c) Does she have to send the shares to the respective company for demating?
Ans: No, she does not have to send the shares to respective company for demating. She
has to send physical certificates and DRF in triplicate to the DP.
--------------------------------------------------------------------------------------------------------------------------------
4. Mr. L wants to demat his 25 shares of Peculiar Co. Ltd. bearing certificate
no. 100 and distinctive no. 76-100.
(a) Which form is he required to fill as a written request to the DP?

Ans: Mr. L has to fill Demat Requisition Form [DRF] as a written request to the DP.
(b) Does he have to fill instrument of transfer if he wishes to transfer the same
after demat?
Ans: After Demat, if he wishes to transfer the shares, he does not have to fill instrument
of transfer. However, he will have to submit Delivery Instruction Slip [DIS] to DP.
(c) Does he have to quote certificate no. and distinctive no. if he wishes to
transfer his shares after it is in Demat form?
Ans: The securities in demat form are fungible. They do not have any certificate no.
and distinctive nos. Mr. L does not have to quote any such number after demating
shares.
--------------------------------------------------------------------------------------------------------------------------------
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5. Mr. S. holds 50 shares of Peculiar Co. Ltd in Demat form. The company
has declared a dividend of Rs 5. Per-share and Bonus of 1 : 1 to its
shareholders.
(a) How will Mr. S get his dividend?

Ans: Under Depository system, account of the investor is automatically credited in case
of corporate action. So, Mr. S will get his dividend through the depository.
(b) Will he get a Bonus share in Physical or Demat?

Ans: Since, Mr. S holds the shares in demat form, he will get bonus shares in demat
form.
(c) Who is entitled to dividend and Bonus: Mr. S or the depository? (NSDL in
this case).
Ans: Mr. S is the Beneficial Owner [BO] and he is entitled to the dividend and bonus.
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CH 9 - DEPOSITORY SYSTEM

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S.Y.J.C. (Commerce) Prof.

CHAPTER 9 - DEPOSITORY SYSTEM

Q.1. What is Depository System? Explain its Advantages.

2. Automatic Credit / Debit:

4. Security against loan:

7. Easy transfer of shares:

2. Reduction in costs and efforts:

B - Better investor-company relationships

Q.2. Explain the Constituents of Depository System.

B] CONSTITUENTS OF DEPOSITORY SYSTEM:

2. Depository Participant [DP]:

3. Beneficial Owner [BO]:

Q.3. Write a note on ‘Depositories in India’.

2. Central Depository Services Limited [CDSL]:

B] TERMS / CONCEPTS RELATED TO DEPOSITORY SYSTEM:

 It uses Dematerialisation Request Form [DRF] from investor to the DP.

4. International Securities Identification Number [ISIN]:

Q.5. What is Dematerialisation? Explain the procedure of Dematerialisation.

2. In case of Initial Public Offer [IPO]:

Q.6. Distinction Between:

OBJECTIVE TYPE QUESTIONS

A) Select the correct option and rewrite the statements.

2. Risk of losing certificates exist in ____________ mode.

3. In Depository system, securities are held in ____________ form.

4. ____________ is the institute which facilitates electronic holding of securities.

5. There is no payment of ____________ when securities are demated.

6. Depository Act was passed in ____________

7. India has a ____________ depository system.

8. ____________ is a constituent of depository system.

9. ____________ is the oldest depository in India.

10. Demat account is opened by ____________

11. Demated shares are ____________

12. ____________ is a unique code given to a security.

13. In India ISIN for corporate securities is allotted by ____________

14. ____________ has to apply for ISIN.

15. ____________ has to pay charges to maintain Demat Account.

16. NSDL is promoted by ____________

17. CDSL is promoted by ____________

18. Depository Participant has ____________ for identification.

B) Write a word or a term or a phrase:

1. This mode of holding securities may result in Physical mode of

8. The agent of the Depository. Depository Participant

C) State whether the following statements are True or False.

D) Find the odd one:

E) Complete the sentences:

11. The first Depository of India is ____________. NSDL

F) Select the correct option from the bracket.

3) First Depository of world c) ………………………….

G) Correct the underlined words and rewrite the following sentences.

1. The electronic mode of holding Securities is risky. physical

9. ISIN is a code given to a company. Security of company.

H) Arrange in proper order:

1. Gets statement of Account, Open Demat Account, Submit DRF

2. Investor (BO) submits an application for Securities to the issuer company,

3. Conversion of physical certificate into demat form –

I) Explain the following Concepts:

6. Depository Participant [DP]:

7. Beneficial Owner [BO]:

J) Justify the following statement:

2. Depository system is very similar to banking system.

3. Depository provides easy and quicker transfer of shares.

4. Depository system results in reduced time, cost and efforts.