Friday, 22 November 2019

Unit 7: Depositories and Custodians

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                       Unit 7: Depositories and Custodians   









The introduction of Depositories has significantly contributed for the efficient functioning of the stock marketing trading on line.
Depositories are offering a variety of services to corporates, shareholders, banks and the Government.
It has simplified the entire process of equity trading and settlement with in the permitted time.
Depositories are offering other activities like company stock equity book building activity and securitisation services which have significantly contributed to the growth of stock market trading.
But the depositories are adapting to false means of allocation and their binary transactions.
SEBI should take up more stringent norms and Punish severely to prevent such frauds to retain the confidence and trust of the common investor, who is always being exploited by the market mechanism.
Depositories (NSDL/CDSL): The Depositories (NSDL/CDSL) will provide the list of demat account holders and the number of shares held by them in electronic form on the Record date to the company/registrar (known as Benpos.
Depository (NSDL and CDSL): A Depository (NSDL and CDSL) is an organisation like a Central Bank, i.
e.
Reserve Bank where the securities of an investor are held in electronic form, through Depository participants.
Depository System: Depository system functions very much like the banking system.
A bank holds funds in accounts whereas, a Depository holds securities in accounts for its clients.
A bank transfers funds between accounts whereas, a Depository transfers securities between accounts.




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