NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement

Delivery Instruction Slip (DIS) and Off-Market Transfers

Updated 11 October 2026 · Fact-checked

A Delivery Instruction Slip (DIS) is the serially numbered form a demat account holder signs to instruct the depository participant to debit securities. On-market transfers settle trades through a clearing member. Off-market transfers move securities directly between accounts. To solve questions, check issuance, signatures, details, then the transfer type.

Understand Delivery Instruction Slip (DIS) and Off-Market Transfers

Securities in a demat account move only when the account holder instructs the depository participant (DP). The traditional written instruction is the Delivery Instruction Slip (DIS). It is the demat equivalent of a cheque: you sign it, and the DP debits your account.

The DP issues DIS to the beneficial owner (BO) in a booklet. Each slip is serially numbered and carries the DP ID and client ID of the account. This control lets the DP trace every slip it has issued. The DP keeps records of slips issued, and a BO who needs a new booklet submits the requisition slip from the old one.

A DIS must be signed by the holder(s) as per the account's operating instructions. If the instructions say the account is operated jointly, all holders must sign. If they say either or survivor or anyone or survivor, a single holder may sign. A minor's account is operated by the natural or legal guardian.

There are two broad kinds of transfer. An on-market transfer delivers securities to settle a trade done on a stock exchange. The securities go to the clearing member's pool account for the settlement. The slip therefore carries the settlement number, the market type and the clearing member's ID and pool account details. A paper DIS is not the only way to authorise this. An e-DIS or a power of attorney (POA) can also serve as the authorisation. An off-market transfer is a transfer not linked to an exchange settlement. Examples are gifts, transfers between your own accounts, and a privately agreed sale. The slip carries the receiving account details and a reason for the transfer.

The DP is responsible for what it does with the slip. Before debiting, it checks the slip is from its own series, the signatures match its records, the slip is signed by the holder(s) the operating instructions require, the details are complete, any correction is authenticated by the same holder(s) who signed the slip, and the account is not frozen for debit and has enough free balance. If a check fails, the DP rejects the instruction. It must not execute a faulty slip.

For the exam, remember the logic. The DP protects the BO's securities by controlling the slips and verifying each instruction. Most trap options break one of these controls.

Key formulas to remember

DIS issuance: DIS booklet → issued by DP → only to the BO of that account; Slips are serially numbered and carry the DP ID and client ID. A new booklet is issued against the requisition slip of the earlier booklet.
Signature rule: Instruction valid only if signed by the holder(s) required under the account's operating instructions (all holders if 'jointly'; the guardian for a minor's account); Joint accounts may be operated 'jointly', 'either or survivor' or 'anyone or survivor'. The DP verifies signatures against its records. A mismatch or a missing required signature means rejection.
On-market transfer: DIS + settlement number + market type + clearing member ID and pool account details → securities to the clearing member's pool account for exchange settlement; Used for delivery of securities sold on an exchange. An e-DIS or a POA can be used as an alternative authorisation to the paper slip.
Off-market transfer: DIS + target DP ID and client ID + ISIN + quantity + reason → direct transfer, not tied to exchange settlement; Used for gifts, own-account transfers and private sales. It can be intra-depository or inter-depository.
Corrections on a DIS: Any alteration must be authenticated by the same holder(s) who signed the slip, as required by the operating instructions; An unauthenticated correction is a ground for rejection.
Pre-execution checks: Own series + signature match + complete details + no debit freeze + sufficient free balance; If any one fails, the DP does not execute.

How to solve Delivery Instruction Slip (DIS) and Off-Market Transfers questions

Use the same sequence for any DIS or transfer question. It sorts out who does what and which control is being tested.

1Identify whether the question is about issuance, processing or execution. Issuance is the DP's job and has booklet and requisition rules.
2Find who is giving the instruction: single holder, joint holders or minor. This decides whose signatures are needed.
3Identify the transfer type. Exchange trade settlement means on-market. Gift, own-account move or private sale means off-market.
4List the details the slip needs for that type: ISIN, quantity and target account. Add settlement details for on-market, or a reason for off-market.
5Run the DP's checks: own series, signature match, authenticated corrections, no debit freeze and sufficient free balance.
6If a check fails, the answer is that the DP rejects or does not execute. If all pass, the DP executes and records it.
7Match your conclusion to the options. Reject any option that lets the DP skip a verification step.

Quickest way: Three-question DIS filter

When to use it: Use it for one-line MCQs where you have under a minute per question.

Ask: who signs? The holder(s) the operating instructions require: all holders if 'jointly', or the guardian for a minor. Any option with fewer signatures than required is wrong.
Ask: market or off-market? Exchange settlement points to on-market. Everything else points to off-market.
Ask: would the DP be skipping a check? Options that say the DP can execute without verification or with unauthenticated changes are usually the trap.

Common mistakes in Delivery Instruction Slip (DIS) and Off-Market Transfers

Treating off-market transfers as only gifts.
Gifts are the most common example, so students assume it is the only one.
Fix: Remember off-market means not linked to exchange settlement. It covers own-account moves, gifts and private sales.
Assuming one joint holder's signature is always enough, or that all holders must always sign.
Students apply one rule to every joint account and ignore the operating instructions.
Fix: Read the operating instructions. If the account is operated jointly, all holders sign. Under 'either or survivor' or 'anyone or survivor', one holder may sign. The DP checks every required signature against its records.
Accepting a slip with overwriting if the signature matches.
Students focus on the signature and forget the correction rule.
Fix: Any alteration must be authenticated by the same holder(s) who signed the slip. Otherwise the DP rejects the slip.
Mixing up on-market and off-market details.
Both use a DIS and look similar.
Fix: On-market carries the settlement number, market type and the clearing member's pool account details. Off-market carries the receiving account's DP ID and client ID with a reason.
Believing the DP may issue a DIS to anyone who asks.
Students forget the slip is tied to the account and its holder.
Fix: The DP issues the booklet to the BO of that account. A new booklet follows the requisition slip.
Ignoring the account status and balance.
Students think a valid slip is always enough.
Fix: A slip on an account frozen for debit, or without enough free balance, cannot be executed.

Worked examples

Example 1

A demat account is held jointly by two holders, and its operating instructions say the account is operated 'jointly'. Only the first holder signs a DIS for an off-market transfer. All other details are complete and the balance is sufficient. What should the DP do? (A) Execute, since the first holder signed (B) Reject, since all holders must sign under 'jointly' operating instructions (C) Execute after the clearing member confirms (D) Execute only if the transfer is a gift

Show the solution

Identify the holder structure: joint account, two holders, operating instructions 'jointly'.
Recall the signature rule: under 'jointly' instructions, all holders must sign the DIS.
Check the other conditions. Details and balance are fine, but the signature condition fails.
A failed check means the DP does not execute. Option A skips the check. Option C wrongly involves a clearing member, which has no role in an off-market transfer. Option D has no basis in the rules.

Answer: (B) The DP should reject the slip because all holders must sign under 'jointly' operating instructions.

Example 2

A BO wants to move shares to a family member's demat account as a gift. Which description is correct? (A) On-market transfer, with settlement number and clearing member details (B) Off-market transfer, with the receiving account details and a reason for the transfer (C) On-market transfer, since a DIS is used (D) Rematerialisation, since the securities leave the BO's account

Show the solution

Ask whether an exchange trade is being settled. It is not; it is a gift.
So it is an off-market transfer.
An off-market DIS carries the receiving account's DP ID and client ID, ISIN, quantity and the reason for the transfer.
Option A applies to exchange settlement. Option C is wrong because a DIS is used for both types. Option D is wrong because securities stay in electronic form.

Answer: (B) It is an off-market transfer with the receiving account details and a reason for the transfer.

Exam tips

Questions often test one control: signatures, authenticated corrections, serial numbers or requisition slips. Find the control first.
Learn the difference between on-market and off-market in one line each. Many options swap the two.
If an option says the DP may execute without verifying, it is almost always wrong.
In Series VI, a wrong answer costs 25% of the marks assigned to the question. Eliminate options rather than guessing blindly.
Read joint and minor accounts carefully. The signatory changes the answer.

Practice questions from Functions of Depository Participant - Trading and Settlement

Delivery Instruction Slip (DIS) and Off-Market Transfers: frequently asked questions

What is a Delivery Instruction Slip in a demat account?

It is a serially numbered slip the DP issues to the BO. The BO signs it to instruct the DP to debit securities from the account. It works like a cheque for securities.

What is the difference between on-market and off-market transfer?

An on-market transfer settles a trade done on an exchange. The securities go to the clearing member's pool account, and the slip carries the settlement number, market type and clearing member details. An off-market transfer is not linked to an exchange settlement. Gifts, own-account moves and private sales are examples.

Who needs to sign a DIS for a joint demat account?

The holders required by the account's operating instructions. If the account is operated jointly, all holders must sign. Under 'either or survivor' or 'anyone or survivor', a single holder may sign. The DP checks each signature against its records, and a missing or mismatched required signature means the DP rejects the slip.

Can a DP accept a DIS with corrections?

Only if every correction is authenticated by the same holder(s) who signed the slip, as the operating instructions require. Unauthenticated overwriting is a ground for rejection.