Under section 5 of the Depositories Act, 1996, through whom may a person enter into an agreement with a depository to avail of its services?
Question and options
Under section 5 of the Depositories Act, 1996, through whom may a person enter into an agreement with a depository to avail of its services?
A participant
A registrar to an issue
The issuer company
A clearing corporation
Answer and explanation
Correct answer: A - A participant
Section 5 of the Depositories Act, 1996 allows any person to enter into an agreement with a depository through a participant, a person registered as such under section 12(1A) of the SEBI Act, 1992; the investor’s demat account is opened with that participant. The issuer and its registrar deal with the depository for admitting securities and corporate actions, not for an investor’s account.
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