Concepts/Terms Related to Depository System - Topic 3

Select the correct correct option(s).

There is no payment of __________ when securities are demated.

• octroi

• wealth tax

• stamp duty

Select the correct correct option(s).

Demated shares are ____________.

• non-transferable

• fungible

• bearer

Answer explanation

Fungibility in financial terms means the state of being interchangeable. Shares held with depository are fungible in nature. These shares do not have distinctive numbers for the purpose of identification. Demated securities have no distinctive numbers. Hence, they are fungible.

Select the correct correct option(s).

____________ is a unique code given to a security.

• IBM

• BBM

• ISIN

Answer explanation

ISIN is a unique 12-digit identification number alloted to a security. It helps to track and store securities with ease. The company has to apply for ISIN for its securities with documents like prospectus. For government securities, allotment of ISIN is done by the RBI.

Select the correct correct option(s).

In India ISIN for corporate securities is allotted by ________.

• NSDL

• Central Government

• State Government

Select the correct correct option(s).

_________ has to apply for ISIN.

• Company

• Depository participant

• Depositors

Select the correct correct option(s).

ISIN consist of a __________ digit alpha-numeric code.

• 12

• 20

• 15

Write a word or a term or a phrase.

This process converts securities into electronic form from physical form.

Answer explanation

Trading becomes paperless under demat. It helps investors to conduct transactions promptly and securely. Therefore, Demat is the procedure of converting physical copies of shares and certificates into digital or electronic form.

 Write a word or a term or a phrase.

This process converts securities into physical form from electronic form.

Answer explanation

A Remat Request Form (RRF) has to be filled and given to the depository participant.

After rematerialisation, the depository participant does not maintain account of the investor in respect of rematerialised securities. Therefore, rematerialisation is the act of reconverting electronic securities certificates into physical form.

Write a word or a term or a phrase.

This means securities are without distinctive identity number.

Write a word or a term or a phrase.

This is the unique code for security given in depository system.