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NISM Certifications · NISM-Series-VI: Depository Operations · Investor Services (NISM VI)

A beneficial owner (BO) wants to know the charges a depository participant (DP) will levy for maintaining and operating the demat account. Where should the DP ordinarily make these charges known to the investor?

The DP should give the client a written tariff schedule as part of the account opening documents. Charges must be transparent and agreed in writing upfront, so verbal assurances, post-transaction disclosure or reliance on the depository's website are not adequate substitutes.

  1. AIn a tariff schedule given to the client as part of the account opening documentsCorrect
  2. BOnly on the depository's website, with nothing given to the client
  3. COnly after the first transaction has been carried out
  4. DThrough verbal assurance by the DP staff at the branch

Explanation

The charges of the DP are to be disclosed in writing and form part of the documents given to the client at account opening. Verbal assurances or post-transaction disclosure do not meet this requirement, and the depository's website does not replace the DP's own disclosure to the client.

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