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Consider the following statements.
- Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure.
- Central Depositories Services India Ltd is the only state-owned share depository in India.
- Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.
Which of the above statements is/are correct?
- a)1 and 2 only
- b)1 and 3 only
- c)2 and 3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements. Central Depositories Services India...
Statement 1: Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure.
Statement 2: Central Depositories Services India Ltd is the only state-owned share depository in India.
Statement 3: Share depositories hold shares in an electronic or dematerialized form and are an enabler for securities transactions.
Explanation:
Statement 1: Central Depositories Services India Ltd (CDSL) is indeed a Market Infrastructure Institution (MII) that plays a crucial role in the capital market structure. It is responsible for providing electronic depository services for various types of securities such as equity shares, government securities, corporate bonds, etc. CDSL facilitates the holding, transfer, and settlement of securities in electronic form, thus eliminating the need for physical certificates. This statement is correct.
Statement 2: Central Depositories Services India Ltd is not the only state-owned share depository in India. There are two major depositories in India - National Securities Depository Limited (NSDL) and Central Depositories Services India Ltd (CDSL), out of which NSDL is the only state-owned share depository. Therefore, this statement is incorrect.
Statement 3: Share depositories, including CDSL, hold shares in electronic or dematerialized form. Dematerialization is the process of converting physical share certificates into electronic form, which allows for easy transfer, trading, and settlement of shares. Share depositories act as intermediaries between investors and issuers, providing a secure and efficient platform for securities transactions. This statement is correct.
Conclusion: Based on the explanation above, it can be concluded that the correct statements are:
- Statement 1: Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure.
- Statement 3: Share depositories hold shares in an electronic or dematerialized form and are an enabler for securities transactions.
Therefore, the correct answer is option B - 1 and 3 only.
Statement 2: Central Depositories Services India Ltd is the only state-owned share depository in India.
Statement 3: Share depositories hold shares in an electronic or dematerialized form and are an enabler for securities transactions.
Explanation:
Statement 1: Central Depositories Services India Ltd (CDSL) is indeed a Market Infrastructure Institution (MII) that plays a crucial role in the capital market structure. It is responsible for providing electronic depository services for various types of securities such as equity shares, government securities, corporate bonds, etc. CDSL facilitates the holding, transfer, and settlement of securities in electronic form, thus eliminating the need for physical certificates. This statement is correct.
Statement 2: Central Depositories Services India Ltd is not the only state-owned share depository in India. There are two major depositories in India - National Securities Depository Limited (NSDL) and Central Depositories Services India Ltd (CDSL), out of which NSDL is the only state-owned share depository. Therefore, this statement is incorrect.
Statement 3: Share depositories, including CDSL, hold shares in electronic or dematerialized form. Dematerialization is the process of converting physical share certificates into electronic form, which allows for easy transfer, trading, and settlement of shares. Share depositories act as intermediaries between investors and issuers, providing a secure and efficient platform for securities transactions. This statement is correct.
Conclusion: Based on the explanation above, it can be concluded that the correct statements are:
- Statement 1: Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure.
- Statement 3: Share depositories hold shares in an electronic or dematerialized form and are an enabler for securities transactions.
Therefore, the correct answer is option B - 1 and 3 only.
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Community Answer
Consider the following statements. Central Depositories Services India...
- CDSL, or Central Depositories Services India Ltd, is a government-registered share depository, alongside its other state-owned counterpart National Securities Depository Ltd (NSDL).
- Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions, playing a somewhat similar role to what banks play in handling cash and fixed deposits. While banks help customers keep their cash in electronic form, share depositories help consumers store shares in a dematerialised form.
- CDSL was founded in 1999. It is a Market Infrastructure Institution or MII that is deemed as a crucial part of the capital market structure, providing services to all market participants, including exchanges, clearing corporations, depository participants, issuers and investors.
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Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements. Central Depositories Services India Ltd is a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. Central Depositories Services India Ltd is the only state-owned share depository in India. Share depositories hold shares in an electronic or dematerialised form and are an enabler for securities transactions.Which of the above statements is/are correct?a)1 and 2 onlyb)1 and 3 onlyc)2 and 3 onlyd)1, 2 and 3Correct answer is option 'B'. Can you explain this answer?.
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