What is depository system.

May 19th, 2015
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University of Derby
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Share certificates, on dematerialization, are cancelled and the same will not be sent back to the investor. The shares, represented by dematerialized share certificates are fungible and, therefore, certificate numbers and distinctive numbers are cancelled and become non-operative.

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What is depository systemA system in which securities of an investor are held by depository on behalf, and at the request, of an investor in an Electronic Form. This system is also know as Scrip Less Trading system. The advantages of dematerialization of securities are as follows:Share certificates, on dematerialization, are cancelled and the same will not be sent back to the investor. The shares, represented by dematerialized share certificates are fungible and, therefore, certificate numbers and distinctive numbers are cancelled and become non-operative.It enables processing of share trading and transfers electronically without involving share certificates and transfer deeds, thus eliminating the paper work involved in scrip-based trading and share transfer system.Transfer of dematerialized securities is immediate and unlike in the case of physical transfer where the change of

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