Due to rapid surge of Initial Public Offers in the primary market, the participation of retail investors in the market has also increased substantially. To tap this opportunity, XYZ Ltd. is planning to start the deposito
CS Executive · Securities Laws and Capital Markets · PYQS · December 2022
Due to rapid surge of Initial Public Offers in the primary market, the participation of retail investors in the market has also increased substantially. To tap this opportunity, XYZ Ltd. is planning to start the depository services. Narrate in brief, the eligibility conditions for rendering of depository services.
Answer & Explanation:
To start depository services, XYZ Ltd. must comply with the following requirements. Any company or other institution to be eligible to provide depository services must: Have a net worth of not less than ₹100 crore . Be formed and registered as a Company under the Companies Act, 2013. Be registered with SEBI as a depository under the SEBI Act, 1992. Have framed bye-laws with the previous approval of SEBI. Have one or more participants to render depository services on its behalf. Have adequate systems and safeguards to prevent manipulation of records and transactions to the satisfaction of SEBI. Comply with the Depositories Act, 1996 and SEBI (Depositories and Participants) Regulations, 2018. Meet eligibility criteria in terms of constitution, network etc.
Topics: Depositories
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