Direct holding system

Direct holding system is like a special room where people keep their toys.

Imagine you have a toy that you really love and want to keep safe. You could keep it in your toy box at home, but sometimes you might worry that it could get lost, stolen, or broken. So instead, you could bring it to the special room where it will be kept safe and sound.

In the direct holding system, people can put their stocks (kind of like toys for grown-ups) into this special room. This room is called a depository. Your stocks are kept safe in this depository and people can easily keep track of how many stocks they have and what they are worth.

Before the direct holding system, people used to have physical stock certificates, which is like a special paper that says you own a certain number of stocks. But this could be risky because if you lost the certificate, then you couldn't prove that you owned those stocks anymore.

With the direct holding system, everything is electronic, which means that it is all kept on computers. This makes it easier for people to trade stocks and keep track of them.

So, to sum it up: direct holding system is like a special room where people can put their stocks so they can be kept safe and easily traded, just like keeping your toys in a toy box to keep them safe at home.