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Business Studies

Dematerialisation and Depository

State some of...

Question

State some of the benefits, which are offered by depository system.

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Solution

Benefits of a depository system are as follows:

(i) The risk of loss/tearing up of share cerficate is eliminated.

(ii) Risk of bad deliveries is totally eliminated.

(iii) Investment in shares become more liquid.

(iv) There is immediate transfer of ownership of securities.

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