2006-12-11 16:15:35 · 3 answers · asked by Anonymous in Business & Finance ➔ Investing
Almost similar to banking system. Here the number of shares are akin to cash in the banking system.
2006-12-11 17:37:44 · answer #1 · answered by cvrk3 4 · 1⤊ 0⤋
depository System
A depository is a facility for holding securities, which enables securities transactions to be processed by book entry. To achieve this purpose, the depository may immobilize the securities or dematerialise them (so that they exist only as electronic records).' India has chosen the dematerialisation route. In India, a depository is an organisation, which holds the beneficial owner's securities in electronic form, through a registered Depository Participant (DP). A depository functions somewhat similar to a commercial bank. To avail of the services offered by a depository, the investor has to open an account with it through a registered DP.
dematerialisation
Dematerialisation is a process by which physical certificates are converted into electronic form.
Who is a Beneficial Owner (BO)?
"Beneficial Owner" is a person in whose name a demat account is opened with CDSL for the purpose of holding securities in the electronic form and whose name is recorded as such with CDSL.
Who is a Depository Participant?
A Depository Participant (DP) is an agent of the depository who is authorised to offer depository services to investors. Financial institutions, banks, custodians and stockbrokers complying with the requirements prescribed by SEBI/ Depositories can be registered as DP.
Who is an Issuer?
Issuer means any entity making an issue of securities.
What is an ISIN?
ISIN (International Securities Identification Number) is the identification number given to a security of an issuer at the time of admitting such security in the depository system.
Whether different securities issued by the same Issuer will have same ISIN?
No, different securities issued by the same issuer will have different ISINs.
What services are provided by a DP?
Following services can be availed of through a DP:
Dematerialisation i.e. converting physical securities into electronic form.
Rematerialisation, i.e. converting electronic securities balances in a BO account into physical form.
To maintain record of holdings in the electronic form.
Settlement of trades by delivering/ receiving underlying securities from/in BO accounts.
Settlement of off-market trades i.e. transactions between BOs entered outside the Stock Exchange.
Providing electronic credit in respect of securities allotted by issuers under IPO or otherwise.
Receiving on behalf of demat account holders non-cash corporate benefits, such as, allotment of bonus and rights shares in electronic form or securities ensuing upon consolidation, stock split or merger/amalgamation of companies.
Pledging of dematerialised securities.
Facilitating Securities Lending and Borrowing, if the DP is registered as an "Approved Intermediary" for the purpose.
2006-12-12 02:39:19 · answer #2 · answered by Param 2 · 1⤊ 0⤋
look like banking system
2006-12-12 12:38:50 · answer #3 · answered by udayashanker k 3 · 1⤊ 0⤋