The Depository provides its services to investors through its agents called depository participants (DPs). These agents are appointed by the depository with the approval of SEBI. According to SEBI regulations, amongst others, three categories of entities, i.e. Banks, Financial Institutions and SEBI registered trading members can become DPs.
Depository Class 10 MCQ
1. How is a depository similar to a bank?
a. Both provide loans to the account holders.
b. Both operate their bank in a rural area.
c. Both hold physical cash.
d. Both facilitate safekeeping and transfer of assets.
2. Which of the following is known as a depository in India?
a. NSE and BSE
b. NSDL and CDSL
c. Reserve Bank
d. All of the above
3. Which of the following is NOT consideredparticipating in a depository?
a. Immediate transfer of securities
b. Requirement of stamp duty on transfer
c. Reduction in paperwork
d. All of the above
4. Which of the following facilities is made easier in a depository?
a. Currency exchange
b. Applying for a loan
c. Nomination of beneficiaries
d. Opening a savings account
5. In a demat account, if there is a stock split or merger, then what happens automatically?
a. Shares are credited automatically.
b. Share can be transferred manually.
c. You can apply for a new share.
d. All of the above
6. If the investor’s death is there, then who handles the transmission of securities?
a. The bank
b. The stock exchange
c. The government
d. The Depository Participant (DP)
7. What do you mean by Depository Participant (DP)?
a. A government official
b. An agent of depository approved by SEBI
c. A company
d. A mutual fund distributor
8. Who can become a Depository Participant (DP)?
a. Banks
b. Financial Institutions
c. SEBI-registered trading members
d. All of the above
8. What is the minimum balance requirement of securities in a DP account?
a. Minimum 10000
b. Minimum 100 shares
c. No, zero balance is allowed.
d. None of the above
9. What is ISIN?
a. Investor Security Identification Notice
b. Internal Stock Index Number
c. International Securities Identification Number
d. None of the above
10. What is the role of custodian?
a. Issue the shares
b. Regulates stock exchange
c. Safeguards securities and tracks corporate actions for clients
d. None of the above
11. Which of the following is NOT a function of a custodian?
a. Selling securities on behalf of the client
b. Maintaining clients’ securities accounts
c. Collecting benefits of rights for the client
d. All of the above
12. Can electronic holdings be converted into physical certificates?
a. Only for mutual funds
b. Only with RBI approval
c. Yes, through a process called rematerialization
d. All of the above
13. How can I convert physical holdings into electronic holdings?
a. Using a savings account
b. Using the Remat Request Form (RRF) and submitting the physical certificate
c. Apply a Demat Request Form (DRF) and submit a physical certificate.
d. None of the above
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