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Secretarial Practice · Class 12 Commerce

Ch 9Depository System — Class 12 Secretarial Practice, concept-first.

Before the mid-1990s, every Indian company share existed only as a piece of paper — a physical share certificate. Buying, selling or transferring shares meant physically moving that certificate from seller to buyer, getting it registered in the company's books, and waiting weeks for the process to complete.

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Key concepts

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Meaning and Need for the Depository System

A depository is an organisation that holds investors' securities in electronic (dematerialised) form and transfers ownership by simple book-entry, replacing the older paper-certificate system.

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

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Meaning and Need for the Depository System

Before the mid-1990s, every Indian company share existed only as a piece of paper — a physical share certificate.

2

Dematerialisation and Rematerialisation

The depository system rests on converting paper securities into electronic form, and — if an investor ever wants it — converting them back.

3

Constituents of the Depository System

The depository system works because several distinct parties each play a defined role. The Maharashtra HSC Secretarial Practice syllabus expects a student to identify each constituent and explain what…

4

Working of the Depository System

Understanding the constituents is only half the picture; a student must also be able to describe how the depository system actually functions once an investor decides to hold and trade securities elec…

5

Legal Framework of the Depository System

Holding and transferring securities electronically needed a clear legal foundation before it could replace paper certificates as the accepted mode of ownership, and the Maharashtra HSC (MSBSHSE) Std X…

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Benefits of the Depository System and the Role of the Secretary

The depository system was built to solve the specific problems of the old paper-based system (Section 1), and its benefits map directly onto those problems — for investors, for companies, and for the…

Exercises

+Show 11 questions11 questions
  1. Q1The Depositories Act, which created the legal framework for holding securities electronically in India, was passed in the year: (a) 1956 (b)…Free
  2. Q2Distinguish between Dematerialisation and Rematerialisation.Free
  3. Q3Who is a Depository Participant (DP)? Explain the role of a DP in the depository system.Free
  4. Q4Explain the meaning of a Beneficial Owner (BO) in the context of the depository system.Preview
  5. Q5Explain the role of the Registrar and Transfer Agent (RTA) in the depository system.Preview
  6. Q6Which of the following correctly names India's two depositories? (a) NSE and BSE (b) SEBI and RBI (c) NSDL and CDSL (d) DP and RTAPreview
  7. Q7What is an ISIN? Explain its significance in the depository system.Preview
  8. Q8Describe the procedure followed for the dematerialisation of securities.Preview
  9. Q9Explain the benefits of the depository system to investors.Preview
  10. Q10Explain the benefits of the depository system to companies and to the capital market as a whole.Preview
  11. Q11Explain the role of the Secretary of a company in relation to the depository system.Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 22 questions22 questions
  1. Q1India has a ______ depository system. (a) sole (b) multi (c) singlePreview
  2. Q2Explain the following term/concept: Depository Participant (DP)Preview
  3. Q3Distinguish between the following: Dematerialization and RematerializotionPreview
  4. Q4Explain any four advantages of a depository system to an investor.Preview
  5. Q5Find the odd one. (a) Depository (b) DP (c) RBIPreview
  6. Q6Explain the following term/concept: Depository Participant (DP)Preview
  7. Q7Mr. Kishore wants to demat his 25 shares of Hero Company Ltd. bearing certificate no. 100 and distinctive no. 76-100: Which form is he requi…Preview
  8. Q8Explain any four advantages of a depository system to an investor.Preview
  9. Q9Find the odd one. (a) Depository (b) DP (c) RBIPreview
  10. Q10Explain the following term/concept: Depository systemPreview
  11. Q11Study the following case/situation and express your opinion. | Mr. Satish holds 100 shares of Raj Company Ltd. in physical mode and wishes t…Preview
  12. Q12Distinguish between the following: Dematerialization and RematerializotionPreview
  13. Q13______ has to apply for ISIN. (a) Company (b) Depository participant (c) DepositorsPreview
  14. Q14Explain the following term/concept. DematerialisationPreview
  15. Q15Explain any four advantages of a depository system to an investor.Preview
  16. Q16Justify the following statement. Depository provides easy and quicker transfer of shares.Preview
  17. Q17Correct the underlined word and rewrite the following sentence. Securities are fungible in **Physical** mode.Preview
  18. Q18Explain the following term/concept. DematerialisationPreview
  19. Q19Study the following case/situation and express your opinion. Mrs. Khushi wishes to open a Demat Account in her name. Can she open the accoun…Preview
  20. Q20Justify the following statement. Depository system is very similar to the banking system.Preview
  21. Q21Write a word / term / phrase which can substitute the following statement: An organization which holds shares in security in electronic form…Preview
  22. Q22State with reasons whether the following statement is True or False: Handling demat shares is very time consuming.Preview