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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations

A BO submits a delivery instruction slip to the DP for an off-market transfer. Which check is the DP required to carry out before processing the instruction?

The DP must verify the BO's signature against the specimen on record and confirm that sufficient free balance exists in the account. It does not need fresh KYC for each instruction, a family relationship with the receiver, or issuer approval, since these are not part of the standard processing checks.

  1. AVerify that the BO's signature matches the specimen signature held and that the account has sufficient free balanceCorrect
  2. BObtain a fresh KYC form from the BO for every instruction
  3. CConfirm that the receiving party is a relative of the BO
  4. DObtain approval from the issuer company before processing

Explanation

Before executing, the DP checks the authenticity of the DIS, verifies the signature(s) against the specimen records, and ensures the securities are available as free balance. A fresh KYC for each instruction is not required, there is no relationship requirement for the recipient, and issuer approval is not needed for a transfer of demat securities.

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