Explain any four advantages of Depository System to investor.

Answer: The advantages of the depository system to investors are:

1. Elimination of risks of physical certificates: Securities are held in electronic form, so there is no risk of loss, theft, mutilation, forgery or fake certificates.
2. Quick transfer and settlement: Transfer of securities is done by simple debit and credit in demat accounts. Settlement is completed in a very short time, so the investor gets the shares or money quickly.
3. No stamp duty on transfer: Transfer of securities in demat form does not attract stamp duty, which reduces the cost of transactions.
4. No bad delivery: Problems of bad delivery due to signature mismatch or defective transfer deeds are eliminated.
5. Easy pledge and loans: Demat securities can be pledged easily and quickly to obtain loans from banks.
6. Automatic credit of corporate benefits: Bonus shares, rights shares and split shares are credited directly to the demat account; dividend and interest are credited to the linked bank account.
7. Single account and easy nomination: All securities are held in one account with a single change of address; nomination facility is available, making transmission simple.
8. Odd lots: Even a single share can be traded; the problem of odd lots disappears.