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Financial Market — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesFinancial Market3 Marks
Question
Highlight the depository system of trading in shares.
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Answer

Depository Services: The depository services originated recently in the Indian Stock Market. Now-a-days on-line (scripless or paperless) trading in the shares of any company is compulsory. To make it a success some new trading mechanism is needed. Depository service is the name of that mechanism which makes possible the on-line trading in shares. Through this system transfer of ownership in shares take place by means of book entry without the physical delivery of shares. When a person wants to deal in shares of any company he/she has to open an account with thedepository through a depository participant. Hence, there are four players who participate in this system. These are the following:
  1. The Depository.
  2. The Depository Participant.
  3. The Investor.
  4. The Issuing Company.

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