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Proper operation of depository accounts

Discussion in 'Forex Discussions' started by Stonecipher, Jul 6, 2010.

  1. Stonecipher

    Stonecipher New Member

    Jul 2, 2010
    Likes Received:
    The Depository Participant’s Module (DPM) helps the depository participants to input data into the system with ease. A participant has the right to specify the price at which he intends to sell or buy a commodity. It generates a client account number after the information has been keyed in. The depository participant is required to provide a copy of the report generated by the DPM to the investor. A commodity trading firm may insist on such a move from the part of the major traders. The age of the depository participants also matters much with respect to the freedom allowed in the operation of the accounts. Often individuals with a good track record were allowed much freedom to trade on credit.

    The purchase or dematerialization of a commodity is shown as a credit in the depository account and sale of commodities is shown as a debit in the depository account. The balance in the account shows the commodities in holding at present. All transactions over the depository accounts require the prior authorization of the account holder. This is much different from the accounts maintained in a bank. If you have an account in the bank, your authorization is required to debit the account but all credits are credited automatically.

    Until recent times, if a minor had registered for commodity trade, a minor’s guardian could not sell the commodities at his discretion or close the account. He was required to obtain a court order to do so. Credits to the account were allowed freely, with prior authorization. The regulatory authority has issued fresh guidelines to its business partners, which now permit the guardian of a minor to operate and close the account. The reason for permitting this is as follows:

    ‘Under the Minority and Guardianship Act, permission of court is required in the case of transfer by a natural guardian of immovable property of a minor. However, commodities are not immovable property. The Sale of Goods Act, includes shares within the definition of goods. Neither the Contract Act nor the Sale of Goods Act provides for transfer by sale or otherwise by the guardian/natural guardian of goods/movable property etc in the name of the minor to the effect that the permission of the court is required to affect the transfer.

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