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Company > Securities- Depositories and Participants > Flashcards

Securities- Depositories and Participants Flashcards

1
Q

Application for certificate of registration as a participant?

A

Form F First Schedule - through the depository

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2
Q

The Depository shall forward the application to Board along with :

  1. Recommendations
  2. Certifying that participant complies with the eligibility criteria - including ADEQUATE INFRASTRUCTURE
A

Not later than 30 days

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3
Q

Time line for removal of objections by Board

A

30 days

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4
Q

Before granting certificate of registration, the Board may ask for further information from?

A
  1. Applicant
  2. Depository
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5
Q

Who may appear before the Board for grant of certificate as a Participant ?

A
  1. Applicant ,
  2. Authorized Representative
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6
Q

Who can apply for becoming a participant?

A
  1. Public Financial Institution
  2. Bank included in schedule 2 of RBI Act, 1934
  3. Foreign Bank Operating in India
  4. State Financial Corporation
  5. Institutions engaged in providing financial services
  6. Custodian of Securities
  7. Clearing house
  8. Clearing Corporations
  9. Stock Broker
  10. Self Clearing Member fulfilling net-worth requirements as provided under SEBI (Stock Brokers) Regulations, 1992
  11. Non banking financial company having networth of 50 lakhs
  12. Registrar to an issue and Share transfer agent having net-worth of 10 crores
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7
Q

A stock broker applying to become a participant should ensure a net-worth of?

A

Three crores - within one year of SEBI (Depositories and Participants) Amendment Regulations 2022

Five Crores- within two years

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8
Q

An applicant applying to become a participant must have ?

A
  1. Infrastructure
  2. System
  3. Safeguards
  4. Trained Staff

ISS TS

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9
Q

Board shall grant certificate as participant in form?

A

Form G First Schedule

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10
Q

The participant will have to pay registration fee within?

A

15 days from intimation of board

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11
Q

An applicant will get the certificate of registration as participant only if the depository through which it applies holds a ?

A

Certificate of Commencement of Business under regulation 16

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12
Q

The participant shall address the grievances of beneficial owners within?

A

30 days of the receipt of complaint

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13
Q

The participant shall keep the depository informed about the ?

A

Number and Nature of redressals

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14
Q

Certificate of Registration is valid until?

A

Cancelled or Suspended by Board

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15
Q

The registration fee has to be paid by a Participant for every 5 years from?

A

6th year of the date of grant of certificate or registration or initial registration granted prior to SEBI ( change in conditions of registration of certain intermediaries) Amendment regulations 2016

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16
Q

The Registration fee by a participant shall be paid by the expiry of ?

A

One Month prior to the expiry of block for which fee has been paid

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17
Q

Code of Conduct of Participant?

A

Part A 3rd Schedule

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18
Q

A participant who has been granted a certificate of registration may act as a participant of another depository ?

A

Without obtaining a separate certificate of registration - subject to approval from the other depository

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19
Q

A Participant shall pay annual fees

A

Separately for each depository

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20
Q

The Depositories , Participants, Issuers , Issuers Agents - DPIIA shall have rights and obligations laid down in?

A
  1. Depositories Act
  2. Bye-laws
  3. AGREEMENTS entered by them
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21
Q

What will each depository state in its bye-laws?

A

Specific Securities which are eligible to be held in dematerialised form

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22
Q

Are unlisted securities eligible to be held in dematerialised form?

A

Yes

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23
Q

Which securities are eligible other than unlisted securities to be held in dematerialized form?

A
  1. Stocks
  2. Shares
  3. Scrips
  4. Bonds
  5. Debenture
  6. Debenture Stock
  7. Indian Depository Receipts
  8. Electronic Gold Receipts
  9. Marketable securities of like nature of Incorporated Company and other body corporate
  10. Units of Mutual Fund
  11. Rights under Collective Investment Scheme
  12. Venture Capital Funds
  13. Commercial Paper
  14. Certificates of Deposit
  15. Securitised Debt
  16. Money Market Instruments
  17. Government Securities
    18 Unlisted Securities
  18. Other specified by Board
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24
Q

Who can exercise the option to hold securities in dematerialised form?

A
  1. Issuer
  2. Investor
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25
Q

Who will enter into an agreement to enable the investor to hold securities in dematerialised form?

A

Issuer will enter into agreement with depository

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26
Q

When will an agreement between issuer and depository not be required ?

A
  1. Depository itself is the issuer
  2. Central Government or State Government is the issuer of Government Securities
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27
Q

Every depository shall have systems and procedures which will enable it to coordinate with ?

A
  1. Issuer or issuers’ agent
  2. Participant
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28
Q

Every depository will have systems and procedures to enable it to reconcile the?

A

Records of ownership of securities - on DAILY BASIS

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29
Q

Every depository will maintain continuous electronic means of communication with ?

A
  1. Issuer
  2. Issuers’ agent
  3. Participants
  4. Clearing house
  5. Clearing Corporations
  6. Other Depositories
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30
Q

The depository shall satisfy the Board that it has mechanism to ensure that the interests of ___ are adequately protected?

A

Person buying and selling securities held in the depository

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31
Q

Every depository shall allow any participant to withdraw or transfer its account if ?

A

Request for withdrawal or transfer is in accordance with conditions stipulated in the bye-laws of the depository

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32
Q

Every depository shall have adequate mechanism for the purpose of RME the?

A

Depository’s CSPS - Control Systems, Procedures and Safeguards

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33
Q

Every depository shall cause an inspection of its CSPS to be carried out ?

A

ANNUALLY - forward report to Board

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34
Q

A depository shall have adequate Business Continuity Plan for?

A
  1. Data
  2. Electronic records

Prevent , prepare, recover from any disaster

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35
Q

Wind-down plan means ?

A

Plan to transfer :

  1. Beneficial owner accounts
  2. Two operational powers of depository to an alternative institution
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36
Q

Why is wind down plan needed ?

A
  1. Erosion of net-worth of depository
  2. Insolvency
  3. Inability to provide critical depository services
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37
Q

When the records are kept electronically by a depository, it shall ensure?

A
  1. The integrity of automatic data processing systems is maintained at all times .
  2. Take precautions so that data is not lost, destroyed or tampered
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38
Q

Every depository to maintain following records?

A
  1. Securities dematerialised and rematerialised
  2. Transferor, transferee, date of transfer
  3. Register of Beneficial Owners
  4. Details of holding of securities at the end of each day
  5. Records of instructions received and sent
  6. Approval, notices, entry , cancellation of pledge or hypothecation
  7. Details of participants
  8. Securities declared to be eligible for dematerialisation
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39
Q

Every Depository will extend co-operation to?

A
  1. Issuer
  2. Issuers’ Agent
  3. Beneficial owner
  4. custodian of securities
  5. clearing house/ clearing corporations
  6. other depositories
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40
Q

In case a beneficial owner needs consolidated account statement in respect of all demat accounts held by him?

A

The Depository shall enter into necessary agreements for sharing such information.

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41
Q

No depository shall assign or delegate its functions without?

A

Prior approval of Board

42
Q

Every participant who wants to act as a participant on behalf of beneficial owner shall enter into an agreement with him in the manner laid down by?

A

Depository in its bye-laws

43
Q

Securities of beneficial owners shall be segregated from?

A
  1. other beneficial owners’ security
  2. participant’s own security
44
Q

Every entry in the beneficial owner’s account shall be supported by?

A
  1. Electronic Instructions
  2. Any other mode of instruction received from beneficial owner
45
Q

Every participant shall provide a statement of account to the beneficial owner in such form, manner, time ?

A

As provided in agreement with the beneficial owner .

46
Q

Every participant shall allow the beneficial owner to withdraw or transfer from his account in such manner as specified ?

A

In the agreement with the Beneficial Owner

47
Q

Every participant shall maintain electronic means of communication with ?

A

Each depository in which it is a participant

48
Q

Every participant shall have adequate mechanism for the purpose of RME the participant’s?

A

IACS

Internal accounting control and systems

49
Q

Every participant shall reconcile records with every depository in which its is participant on a —- basis ?

A

DAILY BASIS

50
Q

Every Participant shall submit periodic returns to ?

A
  1. Board
  2. Every depository in which he is a participant
51
Q

What will be the format of periodic returns submitted by a participant ?

A

Specified by :

  1. Board, or
  2. Bye-laws of Depository
52
Q

Every depository shall intimate to the ____ the place where the records and documents are maintained

A

The Board

53
Q

Every Participant shall intimate the ________ the place where the records and documents are maintained ?

A

The Board

54
Q

Every participant shall maintain the following records and documents ?

A
  1. Transactions entered with depository and beneficial owners
  2. Securities dematerialised and rematerialised on behalf of beneficial owners
  3. Instructions received from beneficial owners
  4. statement of accounts provided to beneficial owners
  5. Approvals, notices, entry, cancellation of pledge and hypothecation
55
Q

Every participant shall allow ___ to enter its premises during business hours to inspect its records

A

Persons authorized by depository

56
Q

If a participant enters into an agreement with more than one depository, it shall maintain the records specified in regulation 66?

A

Separately in respect of each depository

57
Q

No Participant shall assign or delegate its functions to any person?

A

Without prior approval of depository

58
Q

All matters regarding :

  1. Transfer of securities
  2. maintenance of records of holders of securities
  3. Handling of physical securities
  4. establishing connectivity with the depositories

shall be maintained at a single point i.e?

A

Either :

  1. In-house by the issuer ,or
  2. Share Transfer Agent registered with the Board
59
Q

Apart from participant, who else is required to resolve grievances of beneficial owners within 30 days ?

A
  1. Issuer or its Agent
  2. Intermediary
60
Q

Every Depository shall establish and maintain an Investor Protection Fund for?

A

The protection of interest of beneficial owners

61
Q

Investor protection fund (IPF) shall not be utilized by depository for ?

A

Indemnifying the beneficial owners under section 16 of the Depositories Act, 1996

62
Q

Every Depository shall credit ___ percent of its Net Profits from ____ every year to IPF

A

5% from depository operations

63
Q

Any beneficial owner who has entered into an agreement with a participant, shall inform the participant about?

A

Details of the certificate of security which is to be dematerialised

64
Q

The Participant shall forward the details of certificate of security to?

A
  1. The Depository and also confirm that an agreement has been entered into between the participant and beneficial owner
  2. The issuer - within 7 days of receipt - along with the certificate
65
Q

Upon receipt of certificate of security from the participant , the issuer shall confirm to ____ in ____ days

A

Depository in 15 days of receipt of certificate of security

66
Q

The issuer shall confirm to the depository that?

A
  1. Securities mentioned in certificate of security have been listed on the stock exchange where the earlier issued securities are listed
  2. Mutilate and cancel in the certificate of security and substitute in its record the name of the depository as the BO
67
Q

When the Issuer substitutes in its record the name of the depository as a BO- it will send a certificate to this effect to the ?

A
  1. Depository
  2. Every Stock Exchange where security is listed
68
Q

____ shall maintain a record of certificates of securities which have been dematerialised?

A

ISSUER

69
Q

The issuer or his agent shall reconcile the records of dematerialised securities with?

A

All the securities issued by the issuer on a daily basis

70
Q

Who will reconcile the records of dematerialized securities if the State or Central Government is the issuer ?

A

The Depository

71
Q

Every issuer shall submit an audit report on _____ basis to ______

A

Quarterly basis starting from September 30, 2003 to concerned stock exchanges

72
Q

The audit report submitted by the issuer to stock exchange has the purpose of reconciliation of ?

A
  1. Total Issued capital
  2. Listed capital
  3. Capital held by depositories in dematerialized form
73
Q

The audit report shall give an updated status of ?

A

register of members of the issuer

74
Q

The audit report shall confirm that securities have been dematerialized as per requests within
?

A

21 days from receipt of request

75
Q

If the issuer notices any difference in its issued, listed, and the capital held by depositories in dematerialized form ?

A
  1. Depositories , and
  2. Stock Exchanges
76
Q

Every issuer or its agent shall establish continuous electronic means of communication with?

A

The depository with which it has entered into an agreement

77
Q

A Depository or its associates shall not list its securities on?

A

A recognized stock exchange that is an associate of the depository

78
Q

_____ will not render any investment advice about any security in publicly accessible media- whether real time or non real time ?

A
  1. Depository
  2. Participant
  3. Any of its employees
79
Q

To make any investment advice, the Depository, participants or their employees have to make a disclosure about?

A

Their interest - long or short in the said security

80
Q

If a beneficial owner intends to create a pledge on a security owned by him , he will make an application to ?

A

The Depository through the participant

81
Q

An application for pledge shall be forwarded by beneficial owner to participant who will then forward it to ?

A

Depository

82
Q

Within 15 days of the receipt of application for pledge, the depository shall create and record the pledge after concurrence of ?

A

Pledgee through the participant

83
Q

The depository shall create and record the pledge and sent an intimation to?

A

Participants of pledger and pledgee

84
Q

Application for cancellation of the entry of pledge can be made by?

A

Pledger or the Pledgee through the participant

85
Q

The depository on cancellation of the entry of pledge shall inform ?

A

The participant of the pledger (only)

86
Q

The Pledgee may invoke the pledge and on such invocation, the depository shall?

A

register the pledgee as beneficial owner of such securities

87
Q

The Depository before registering the hypothecatee as a beneficial owner shall obtain prior approval of ?

A

Hypothecator

88
Q

no transfer of security in respect of which notice of pledge is in force be effected by ________ without the concurrence of ________

A

Participant without concurrence of Pledgee

89
Q

Pledge includes ?

A
  1. re-pledge of securities for margin
  2. Settlement obligations of Client
  3. Other purposes specified by Board
90
Q

The Board may from time to time call for any information , documents or records from?

A
  1. Depository
  2. Governing Board
  3. Shareholder
  4. Applicant
  5. Depository Participant
91
Q

The Board may appoint one or more persons as inspecting officers to undertake inspection of books of accounts etc of?

A
  1. Depository
  2. Participant
  3. Beneficial Owner
  4. Issuer
  5. Issuers’ Agent
92
Q

Before inspection, Board shall give

A

Not less than 10 days notice

93
Q

Upon receiving the investigation report of Depository , Participant , etc - ______ shall take action?

A

The Board or Chairman including action under Chapter V of SEBI (Intermediaries) Regulations , 2008

94
Q

Who has the power to appoint an auditor to investigate into the books of accounts of Depository, Participant, Beneficial owner, issuer, issuer agent ?

A

The Board

95
Q

Controlling interest means ?

A

Interest of not less than 50 % of voting rights or interest

96
Q

Someone who proposes to establish a depository must have ____ % shareholding of the depository?

A

15 %

97
Q

Every Depository shall furnish a copy of its audited balance sheet and profit and loss account for preceding FY within ?

A

One month of holding AGM to the Board

98
Q

A depository which has been granted a registration shall apply for commencement of business within?

A

One year from date of issue of certificate or registration

99
Q

A depository shall pay to the board , a percentage of ______- collected from issuers ?

A

Annual Custody Charges

100
Q

What is a strategic business unit?

A

Organizational unit of a company with its own mission , objectives and business strategy

It has the particular demands of one business area with appropriate technological, financial and other segregation

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