Q1. [1] § Which are the depositories in India? § What are the benefits of participation in a depository? § Can one dematerialise his debt instruments, mutual fund units, government securities in his demat account?
Mr. Sandeep, a new investor, is interested in investing in the stock market. He has learned about the advantages of holding securities in electronic form and has decided to open a demat account. To do this, he approached a local financial institution called "Arron Financials", which is a registered Depository Participant with both NSDL and CDSL. Arron Financials helps him open a demat account and dematerialize his physical shares.
Who serves as the intermediary between the depository and the investors ?
- (A) Stock Exchange
- (B) Clearing Corporation
- (C) Registrar and Transfer Agent
- (D) Depository Participant
Previously asked in CBSE board exam
2026 92 Q4 (iv)
Generated by claude-sonnet-4-6 · 2026-06-15 07:07 · grounding rag
Model Answer
(D) Depository Participant
A Depository Participant (DP) serves as the intermediary (agent) between the depository and the investors, appointed by the depository with SEBI's approval.
Source: Chapter 6, "Who is a Depository Participant (DP)?"
Explanation
The passage clearly states: "The Depository provides its services to investors through its agents called depository participants (DPs)." In the question, Arron Financials is itself a DP — confirming option (D). Stock exchanges, clearing corporations, and RTAs play different roles and are not described as the depository–investor intermediary in this context.
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.