NISM Certifications · NISM-Series-VI: Depository Operations

Functions of Depository Participant - Transmission and Nomination: formula sheet

Full chapter guide

Key formulas

Transmission: Transmission = change of ownership by operation of law (death, insolvency, winding up); The holder does not act. An event triggers it.
Transfer: Transfer = voluntary change of ownership by the holder through a delivery instruction; Used for sale, gift or off-market movement.
Who applies: Transmission request is made by the claimant (survivor, nominee or legal heir) through the DP; The deceased or insolvent holder cannot give the instruction.
Destination: Securities are credited to the claimant's own demat account; The claimant needs an account to receive the securities.
Joint account on death: Surviving joint holder(s) continue; deceased holder's name is removed; Securities are not distributed to legal heirs while a joint holder survives.
Joint account rule: Death of one joint holder → survivor(s) claim → request form + death certificate → deceased's name deleted; No succession certificate or court order is needed. The order of names moves up if the first holder died.
Nominee claim documents: Transmission request form + death certificate + nominee KYC + nominee's demat account; A nominee with no demat account must open one first. Nominee is the first claimant when the sole holder has nominated. The nominee is entitled to the securities on the holder's death, and the DP transmits them without a succession certificate or an indemnity.
No nominee, single holder: Legal heir claim → up to the SEBI threshold in force: simplified documents; above it: probate / letter of administration / succession certificate or similar court proof; Simplified documents mean indemnity bond and affidavit, plus either no-objection letters from non-claiming heirs or a family settlement deed. The threshold has been revised over time, so confirm the current figure in the latest SEBI circular and your workbook.
Death certificate: Notary or gazetted officer attested copy, or copy verified by DP against the original; Without this, no transmission can start.
Claimant checks: KYC + PAN + in-person verification + indemnity (legal-heir claims under the simplified route only); The DP must complete these before crediting the claimant's account. A nominee's claim does not need an indemnity.
Who can change or cancel: Only the account holder(s) can change or cancel a nomination; In a joint account, all joint holders must sign the request. The nominee or a legal heir cannot do it.
Effect of a new nomination: Fresh valid nomination ⇒ earlier nomination stands cancelled; The latest accepted nomination is the one that counts.
Cancellation: Cancellation of nomination ⇒ no nominee on record; Cancellation needs no new nominee. Transmission then follows the legal heir route.
Timing of effect: Nominee's right arises only on the death of the holder (all joint holders in a joint account); During the holder's life the nominee has no rights over the securities.
Nominee vs legal heir: Valid nominee on record = entitled to the securities to the exclusion of all other persons (Section 9A, Depositories Act, 1996); no nominee = legal heir route; This holds unless the nomination has been varied or cancelled. Legal heirs come in when there is no nominee on record.

Quick revision

Transmission is the passing of securities by operation of law, on death of a holder, for example.
Transfer happens by an act of the parties, such as a sale or gift. Do not confuse the two.
In a joint account, on the death of a holder, securities go to the surviving holder or holders.
A claimant applies to the DP, and the DP verifies the documents before crediting securities.
A death certificate is a core document for transmission after a holder's death.
SEBI prescribes simplified documentation for lower-value holdings. Check the workbook for the exact limit.
Nomination is available to individual holders. Non-individual account holders cannot nominate.
Nomination gives the nominee rights only after the death of the holder, or of all joint holders.
A nomination can be changed or cancelled by the holder at any time.
A fresh nomination replaces the earlier nomination.
Nomination is not the same as a will. Know how the two differ and how the workbook treats nominees.
Read each MCQ for conditions such as single versus joint, and minor versus adult.

Common mistakes

Treating transmission as a type of transfer by the holder. Fix: Link transmission with operation of law and transfer with voluntary action. Use the event or choice test.
Thinking legal heirs get the securities even when a joint holder survives. Fix: In a joint account, the surviving holder continues first. Look for the account type in the question.
Asking for a succession certificate when a joint holder dies. Fix: Survivors in a joint account claim directly with the request form and death certificate. The succession certificate is for single-holder cases with no nominee, above the simplified threshold.
Asking a nominee for a succession certificate or court order. Fix: On the death of the sole holder, the nominee is entitled to the securities. The DP transmits them on the request form, death certificate and nominee KYC, without a succession certificate.
Saying legal heirs override a valid nominee after the holder's death Fix: Under Section 9A of the Depositories Act, 1996, the nominee becomes entitled to the securities to the exclusion of all other persons, unless the nomination was varied or cancelled.
Thinking the nominee has rights while the holder is alive Fix: Nominee rights arise only after death. The holder has full control until then.

Exam tips

Expect direct questions asking you to tell transfer from transmission. Use the event or choice test.
Watch scenario questions about joint accounts. The survivor continues before legal heirs are considered.
Remember that death, insolvency and winding up of a corporate holder are the usual transmission triggers.
In a close call, choose the option that says the claimant applies to the DP with documents.
Check the detailed document list and timelines in your NISM workbook, since the exam follows its wording.
Most questions are scenarios. Decide the account type and nominee status first, then look at the documents.
Watch for options that demand a succession certificate in a joint-holder case. These are common distractors.
Learn the structure of the simplified route. The rupee threshold has been revised over time, so use the figure in the question or in your latest workbook and SEBI circular.