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

A BO wants to transfer 500 shares from his demat account to a friend's demat account held with the same DP, outside any stock exchange trade, for no consideration. Which type of transfer is this?

This is an off-market transfer. A transfer of securities directly between two demat accounts, not connected with a trade settled through the clearing corporation, is called off-market, whether it is a gift, a family transfer or a private sale.

  1. AOff-market transferCorrect
  2. BOn-market transfer
  3. CInter-depository transfer
  4. DEarly pay-in transfer

Explanation

A transfer made directly between two BO accounts that is not linked to a trade settled through a clearing corporation is an off-market transfer. On-market transfers settle exchange trades. Inter-depository moves shares between NSDL and CDSL. Early pay-in relates to delivering shares before the settlement date for an exchange trade.

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