Advantages of a Depository System

The different stake-holders have advantages flowing out of the depository system. They are:-

For the Capital Market:

• It eliminates bad delivery; 
• It helps to eliminate voluminous paper work;
• It helps in the quick settlement of dues and also reduces the settlement time;
• It helps to eliminate the problems concerning odd lots;
• It facilitates stock-lending and thus deepens the market.

For the Investor:

• It reduces the risks associated with the loss or theft of documents and securities and eliminates forgery;
• It ensures liquidity by speedy settlement of transactions;
• It makes investors free from the physical holding of shares;
• It reduces transaction costs; and
• It assists investors in securing loans against the securities.
• It provides upto date information on shareholders’ names and addresses;
• It enhances the image of the company;
• It reduces the costs of the secretarial department;
• It increases the efficiency of registrars and transfer agents; and
• It provides better facilities of communication with members.

For the Corporate Sector or Issuers of Securities:

• It provides upto date information on shareholders’ names and addresses; 
• It enhances the image of the company;
• It reduces the costs of the secretarial department;
• It increases the efficiency of registrars and transfer agents; and 
• It provides better facilities of communication with members.