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Depository System — Secretarial Practice STD 12 Commerce / Arts — Question

Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeDepository System4 Marks
Question
The depository system has some advantages to the Investor.
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Answer

  • The depository system holds certificates of the Investor in an electronic form.
  • Safety is ensured as the entire system functions under the Depository Act and is monitored by SEBI.
  • The investor even can freeze his account to avoid fraud.
  • Investors can easily transfer the securities in electronic form.
  • The investor receives a statement of account periodically which keeps him updated.
  • Investors can raise easy loans against the Dematerialized securities.
  • A nomination facility is also available for investors.
  • Dividend, Bonus Shares, Right Issue, Redemption amount gets automatically credited to Investors account.
  • Thus, it is rightly justified that Depository systems have some advantages to the investor.

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