NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations
A BO submits a delivery instruction slip with an overwriting in the quantity field that is not countersigned by the BO. How should the DP treat it?
The DP should reject the slip. Any overwriting or alteration in a delivery instruction must be authenticated by the BO's signature. Without that countersignature the instruction is not valid, and executing it could lead to an unauthorised transfer of securities.
- AExecute it after verifying the signature only
- BReject it, as alterations must be authenticated by the BOCorrect
- CExecute it for the lower of the two quantities
- DExecute it and inform the BO afterwards
Explanation
A DP must verify the DIS carefully, including signatures and any corrections. Any alteration or overwriting must be authenticated by all the BOs with their signatures, and an uncountersigned alteration makes the instruction liable to rejection. Executing it risks an unauthorised transfer.
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