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1.

Arrange in proper order.(a) Investor (BO) submits an application for Securities to the issuer company (b) Depository intimates the DP about crediting Bo’s Account (c) Issuer company gives details of allotment to Depository.

Answer»

(a) Investor (BO) submits an application for Securities to the issuer company 

(b) Issuer company gives details of allotment to Depository 

(c) Issuer company gives details of allotment to Depository
Discussion
2.

Risk of losing certificates exist in _______ mode. (a) Physical (b) Dematerialization (c) Digital

Answer»

Correct option: (a) Physical
Discussion
3.

Demat account is opened by ______ (a) Beneficial owner (b) CDSL (c) SEBI

Answer»

Correct option: (a) Beneficial owner
Discussion
4.

What is the Depository system?

Answer»

A depository system is a system where Securities are held in electronic form.
Discussion
5.

Give examples of actions termed as corporate action.

Answer»

Payment of dividend, issue of Bonus Shares, offering of right Shares, Early Redemption of Debentures, Mergers and Acquisitions, etc.
Discussion
6.

Explain the following term/concept.Dematerialization

Answer»
  • Dematerialization is a process whereby a client can get physical certificates converted into electronic mode.
  • For this client has to surrender the certificates along with the Demat Request Form (DRF) to the DP.
Discussion
7.

What is Rematerialization?

Answer»

Rematerialization is the process of converting electronic Securities into physical.
Discussion
8.

_____ is a unique code given to a security. (a) IBM (b) BBM (c) ISIN

Answer»

Correct option: (c) ISIN
Discussion
9.

_____ is a constituent of depository system. (a) Government (b) Issuer (c) Trust

Answer»

Correct option: (b) Issuer
Discussion
10.

In India ISIN for corporate securities is allotted by ____(a) NSDL (b) Central Government (c) State Government

Answer»

Correct option: (a) NSDL
Discussion
11.

Name the Depositories in India?

Answer»
  • National Security Depository Limited (NSDL) 
  • Central Depository Services Limited (CDSL)
Discussion
12.

What is a DP?

Answer»

DP means Depository participant, who is an agent of Depository.
Discussion
13.

What is Dematerialisation?

Answer»

Dematerialization is the process of converting physical Securities into electronic.
Discussion
14.

Select the correct option from the bracket.Group ‘A’Group ‘A’(a) First Depository in India(1) …………(b) ………(2) Rematerialisation(c) Fungibility(3) ………(d) …………(4) ISIN(12 digital code, NSDL, Electronic to physical, No distinctive number)

Answer»
Group ‘A’Group ‘B’
(a) First Depository in India(1) NSDL
(b) Electronic to Physical(2) Rematerialisation
(c) Fungibility(3) No distinctive number
(d) 12 digital code(4) ISIN
Discussion
15.

Select the correct option from the bracket.Group ‘A’Group ‘B’(a) Dematerialization(1) …………(b) …………(2) DP(c) First Depository of world(3) …………(d) CDSL(4) …………(1999, Agent of Depository, Germany, Physical to electronic)

Answer»
Group ‘A’Group ‘B’
(a) Dematerialization(1) Physical to Electronic
(b) Agent of Depository(2) DP
(c) First Depository of world(3) Germany
(d) CDSL(4) 1999
Discussion
16.

There is no payment of _______ when securities are demated. (a) Octroi (b) Wealth Tax (c) Stamp Duty

Answer»

Correct option: (c) Stamp Duty
Discussion
17.

____ is the institute which facilitates electronic holding of securities.(a) Depository Participant(b) Issuer(c) Depository

Answer»

Correct option: (c) Depository
Discussion
18.

India has a _______ depository system. (a) Sole (b) Multi (c) Single

Answer»

Correct option: (b) Multi
Discussion
19.

Depository Act was passed in ______ (a) 1919 (b) 1996 (c) 1999

Answer»

Correct option: (b) 1996
Discussion
20.

When was Depository Act passed in India?

Answer»

Depository Act was passed in India in the year 1996.
Discussion
21.

What is ISIN?

Answer»

ISIN is the unique code given to the specific Securities of the company. ISIN refers to ‘International Securities Identification Number’.
Discussion
22.

Explain the following term/concept.ISIN

Answer»
  • ISIN is a standard numbering system that is accepted globally.
  • ISIN consists of a 12 (twelve) digit alpha-numeric code which is divided into 3 (Three) parts.
  • The company has to apply for ISIN for its securities with documents like a prospectus.
Discussion
23.

Explain the following term/concept.Fungibility

Answer»

Fungibility means the state of being interchangeable. Securities issued by the same company of the same class have the same value no matter who owns them.

The securities held in electronic form are fungible which means they don’t have distinctive numbers.
Discussion
24.

Explain the following term/concept.Rematerialization

Answer»
  • Rematerialization is the process whereby a client can get his electronic holdings of securities converted into physical certificates.
  • For this client has to give a written request in the form of Remat Request Form (RRF) to the DP.
Discussion
25.

Justify the following statement.Depository system allows both: Physical to electronic and electronic to physical conversion.

Answer»
  • Under the Depository system, physical certificates can be converted into electronic ones known as ‘Dematerialization’.
  • Similarly, the conversion of electronic securities into physical certificates is known as ‘Rematerialization’.
  • Due to Dematerialization transfer of securities takes place fast and transactions are also settled immediately. Whereas in Rematerialization, settlement of transactions in the physical system takes more time.
  • In Rematerialization, storing and handling physical certificates is more time-consuming. Whereas in dematerialization, there is no handling of certificates.
  • There are chances of certificates getting lost, damaged, torn, stolen, misplaced during transit, etc.
  • In this technological world, Demat securities are more preferred over Rematerialized securities.
  • Thus, it is rightly justified that the Depository system allows both: Physical to electronic and electronic to physical conversion.
Discussion
26.

Write a word or a term or a phrase that can substitute each of the following statements.1. This mode of holding securities may result in loss and theft of certificates.2. The organization holds the securities in electronic mode.3. This system eliminates storing of certificates.4. This system allows faster and easier transfer of securities.5. The oldest Depository of India.6. The country where the Depository system started for the first time.7. The registered owner of securities.8. The agent of the Depository.9. This process converts securities into an electronic form from a physical form.10. This process converts securities into physical form from electronic form.11. This means securities are without distinctive identity numbers.12. This is the unique code for security given in the Depository system.

Answer»

1. Physical mode of securities

2. Depository

3. Depository system

4. Depository system

5. NSDL (National Security Depository limited)

6. Germany

7. Beneficial Owner

8. Depository Participant

9. Dematerialization

10. Rematerialization

11. Fungibility

12. International Securities Identification Number
Discussion