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

A BO wants to prevent any debit from his demat account but still allow credits of securities such as bonus shares. What should he request his DP to do?

He should ask the DP to freeze the account for debits only. A debit freeze blocks all outgoing transfers of securities but still allows credits such as bonus shares to come into the account, unlike a freeze on both debits and credits.

  1. AFreeze the account for debits onlyCorrect
  2. BClose the account
  3. CFreeze the account for both debits and credits
  4. DConvert the account to a basic services demat account

Explanation

A freeze can be placed on debits only, on credits only, or on both. A debit freeze stops outgoing transfers while still permitting incoming credits like bonus shares. A full freeze would block credits as well, and closing the account or converting it does not meet the stated need.

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