Who sets the requirements for securities to be eligible for deposit in a depository?

The correct answer is that the depository sets the requirements for securities to be eligible for deposit. This is because a depository functions as a financial institution that holds securities, including stocks and bonds, in electronic form. It establishes specific criteria, such as the type of securities, minimum issuance amounts, and legal and regulatory compliance, that must be satisfied for a security to be accepted into its system.

The depository aims to ensure the integrity and efficiency of its operations, thereby supporting the overall stability of the financial markets. By controlling the deposit criteria, the depository can manage risk, avoid regulatory issues, and facilitate smooth transactional processes for its participants, including brokers and banks.

While various stakeholders like the SEC, broker participants, and bank participants might have an influence on securities practices and regulation, they do not directly determine the eligibility requirements for deposits within the depository itself. Therefore, the depository's role is central to ensuring that all deposited securities meet its established standards.