Depository System — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeDepository System4 Marks
Question
Depository provides easy and quicker transfer of shares.
✓
Answer
Under the Depository system, securities are held in electronic form.
Not only the transfer and settlement of securities are done electronically but it also maintains the accounts of the shareholder, collects dividends, bonus shares, etc. on behalf of the shareholder.
Depository Participant acts as a link between the Depository and the Investor.
No stamp duty is levied on the depository system.
Processing time in the transfer of securities is reduced and neither the securities nor the cash is held up for an unnecessarily long time.
Hence it is also called a “Scripless trading system”. Thus, it is rightly justified that the Depository provides easy and quicker transfer of shares.
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