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    Question

    What is the role of Depository Participants (DPs) in

    the Indian capital market?
    A To trade in equity and debt securities on behalf of investors Correct Answer Incorrect Answer
    B To hold securities in electronic form on behalf of investors Correct Answer Incorrect Answer
    C To provide loans to companies for their capital expenditure Correct Answer Incorrect Answer
    D To underwrite securities issued by companies Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Depository Participants (DPs) are entities that are registered with the Securities and Exchange Board of India (SEBI) to hold securities in electronic form on behalf of investors. They function as intermediaries between investors and depositories and provide services such as account opening, dematerialization, rematerialization, pledge, and hypothecation of securities. DPs are crucial to the functioning of the Indian capital market as they provide a safe and efficient system for holding and transferring securities. Hence, option B is correct.

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