What are the numerous direct and indirect benefits of depository system?
Answers
Depositories reduce cost of transfer and issue of securities, as there is no stamp-duty involved. Protected on-line transactions prevent forgery, theft and physical damage to security certificates. Since Depositories follow safe, tried and trusted protocols, transactions are fool-proof.
A Depository is an organisation which holds securities of investors in electronic format and helps investors to transact these securities safely. Depositories have agents called Depository Participants (DP), who interact with investors.
The advantages from the depositary framework are following: It decreases the expense of the issue and the exchange of securities by taking out stamp obligation.
It lessens the extent of burglary, fraud harms to securities authentications. It disposes of awful conveyances.
The framework visualizes setting up of at least one stores to hold securities of financial specialists in the electronic structure. The store capacities through its specialists, who are called Depository Participants (DP).