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Questions and Answers
Who among the following can act as a depository participant?
Which of the following is NOT considered a depository participant?
Which of the following entities is a valid option for a depository participant?
Which of the following would NOT typically provide depositor participant services?
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What can be inferred about the role of banks in the context of depository participants?
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Study Notes
Depository Participant (DP)
- A Depository Participant (DP) is an entity that acts as an intermediary between the Depository and the investors.
- DPs hold securities on behalf of their clients and facilitate the trading and settlement of securities.
Who can act as DP?
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Banks: Banks can act as DPs and hold securities on behalf of their clients, making it easier for investors to manage their portfolios.
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Brokerage Houses: Brokerage houses can act as DPs, giving investors access to a wide range of financial products via their trading platforms.
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Financial Institutions: Financial institutions, like mutual funds and insurance companies, can also act as DPs, managing their own securities and facilitating trades on behalf of their clients.
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All of the above is the correct answer: All of the above entities can act as depository participants under the Depository Act of 1996.
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Description
This quiz covers the role and functions of Depository Participants (DP) in the financial market. It explores who can act as a DP, including banks, brokerage houses, and financial institutions, highlighting their responsibilities in managing securities for investors.
