Q1. [1] § What are the benefits of participation in a depository? § Who is a Depository Participant (DP)?
It keeps the client informed of corporate actions taken or to be taken by the issue of securities, having a bearing on the benefits or rights accruing to the client.
- (A) Depository Participant
- (B) Bank
- (C) Financial Institution
- (D) Custodian
Previously asked in CBSE board exam
2025 92 Q5 (iv)
Generated by claude-sonnet-4-6 · 2026-06-15 07:06 · grounding rag
Model Answer
(D) Custodian — A Custodian keeps the client informed of corporate actions taken or to be taken by the issuer of securities, which have a bearing on the benefits or rights accruing to the client.
Explanation
A Custodian is responsible for safekeeping client assets and notifying clients about corporate actions (dividends, bonus issues, rights issues, etc.) that affect their holdings. Do not confuse with a Depository Participant, who only facilitates holding of securities in dematerialised form. In MCQs, focus on the phrase "informs client of corporate actions bearing on benefits/rights."
If a question refers to an image, map, graph or diagram that is not shown here, find the actual CBSE question paper on the CBSE website:
cbse.gov.in.