Which of the following crucial responsibilities is are assigned to the National Securities Depositor...........

Economic Affairs Financial Markets

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Which of the following crucial responsibilities is/are assigned to the National Securities Depository Limited (NSDL)?

1. Keeping an electronic record of ownership of shares

2. Regulating securities market in India

3. Initializing, facilitating and organizing an initial public offer (IPO)

Select the correct answer using the codes below.

1 and 3 only

1 only

2 only

2 and 3 only

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Explanation:

Although India had a vibrant capital market which is more than a century old, the paper-based settlement of trades caused substantial problems such as bad delivery and delayed transfer of title.
• In the depository system, securities are held in depository accounts, which are similar to holding funds in bank accounts.
• Transfer of ownership of securities is done through simple account transfers. This method does away with all the risks and hassles normally associated with paperwork.
• So, take this analogy: While a bank holds your cash and fixed deposits, NSDL hold shares, debentures, bonds etc., for all shareholders in the electronic form. When you open a demat account your shares are held by these depositories.
• It provides the virtual in and out transactions on your shares, debentures.