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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.
How many of the above statements are correct?
- a)Only one
- b)Only two
- c)All three
- d)None
Correct answer is option 'B'. Can you explain this answer?
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Consider the following statements. Central Depositories Services India...
Statement 2 is incorrect.
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...
Introduction:
Central Depositories Services India Ltd (CDSL) is a Market Infrastructure Institution that plays a crucial role in the capital market structure in India. It facilitates the holding and transfer of securities in an electronic or dematerialized form. This response aims to analyze the given statements and determine their correctness.
Statement 1: CDSL as a crucial part of the capital market structure
CDSL is indeed a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. It provides services related to the holding, settlement, and transfer of securities in dematerialized form. By offering a secure and efficient platform for investors to hold their securities, CDSL ensures the smooth functioning of the capital market.
Statement 2: CDSL as the only state-owned share depository in India
This statement is incorrect. While CDSL is indeed a prominent share depository in India, it is not the only state-owned depository. In addition to CDSL, there is another major depository called National Securities Depository Limited (NSDL). Both CDSL and NSDL are registered with the Securities and Exchange Board of India (SEBI) and facilitate the electronic holding and transfer of securities.
Statement 3: Role of share depositories
Share depositories, including CDSL and NSDL, play a crucial role in the capital market by enabling securities transactions. They hold shares in an electronic or dematerialized form, eliminating the need for physical share certificates. This dematerialization process makes trading and settlement faster, more secure, and efficient. Share depositories also provide services like account maintenance, settlement of trades, and corporate actions.
Conclusion:
Out of the given statements, only statement 1 is correct. While CDSL is a significant part of the capital market structure in India, it is not the only state-owned share depository. National Securities Depository Limited (NSDL) is another major depository in the country. Share depositories, including CDSL and NSDL, hold shares in an electronic or dematerialized form, enabling securities transactions and enhancing the efficiency of the capital market.
Central Depositories Services India Ltd (CDSL) is a Market Infrastructure Institution that plays a crucial role in the capital market structure in India. It facilitates the holding and transfer of securities in an electronic or dematerialized form. This response aims to analyze the given statements and determine their correctness.
Statement 1: CDSL as a crucial part of the capital market structure
CDSL is indeed a Market Infrastructure Institution that is deemed as a crucial part of the capital market structure. It provides services related to the holding, settlement, and transfer of securities in dematerialized form. By offering a secure and efficient platform for investors to hold their securities, CDSL ensures the smooth functioning of the capital market.
Statement 2: CDSL as the only state-owned share depository in India
This statement is incorrect. While CDSL is indeed a prominent share depository in India, it is not the only state-owned depository. In addition to CDSL, there is another major depository called National Securities Depository Limited (NSDL). Both CDSL and NSDL are registered with the Securities and Exchange Board of India (SEBI) and facilitate the electronic holding and transfer of securities.
Statement 3: Role of share depositories
Share depositories, including CDSL and NSDL, play a crucial role in the capital market by enabling securities transactions. They hold shares in an electronic or dematerialized form, eliminating the need for physical share certificates. This dematerialization process makes trading and settlement faster, more secure, and efficient. Share depositories also provide services like account maintenance, settlement of trades, and corporate actions.
Conclusion:
Out of the given statements, only statement 1 is correct. While CDSL is a significant part of the capital market structure in India, it is not the only state-owned share depository. National Securities Depository Limited (NSDL) is another major depository in the country. Share depositories, including CDSL and NSDL, hold shares in an electronic or dematerialized form, enabling securities transactions and enhancing the efficiency of the capital market.
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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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect 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.How many of the above statements are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
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