Explain the advantage of depository system
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i. It eliminates bad deliveries;
ii. It computes the settlement cycle very fast;
iii. It makes immediate transfer and registration of securities;
iv. It eliminates all risks associated with physical certificate;
v. It also provides nomination facility to the investors;
vi. It reduces trading cost;
vii. Since it is paperless trading, no share certificate and deed etc. are required.
ii. It computes the settlement cycle very fast;
iii. It makes immediate transfer and registration of securities;
iv. It eliminates all risks associated with physical certificate;
v. It also provides nomination facility to the investors;
vi. It reduces trading cost;
vii. Since it is paperless trading, no share certificate and deed etc. are required.
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The benefits from the depositary system are following:
It reduces the cost of the issue and the transfer of securities by eliminating stamp duty.
It reduces the scope of theft, forgery damages to securities certificates.
It eliminates bad deliveries.
It entitles the transferee to all the rights associated with the securities immediately on the settlement of purchase transaction.
It enhances the liquidity of securities in the market.
It makes faster disbursement of non cash corporate benefits like rights, bonus, etc. possible.
It reduces brokerage by many brokers for trading in dematerialized securities.
It eliminates problems relating to change of address of investors, transmission etc.
It eliminates problems relating to selling securities on behalf of a minor.
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