Mr. Sandeep, a new investor, is interested in investing in the stock market. He has learned about the advanta…

Question

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 ?

Accepted Answer

## 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.

Financial Market Management — CBSE Class 10 board question