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

A BO's demat account is marked as 'frozen' for debits only at the BO's request. Which of the following will the DP still be able to process in that account?

The DP can still process a credit of shares received into the account. A debit freeze blocks all outgoing movements, including off-market transfers, pledge creation and market delivery of sales, but it does not stop incoming credits.

  1. ACredit of shares received from another accountCorrect
  2. BDebit through an off-market transfer to a family member
  3. CDebit for pledge creation
  4. DDebit for market delivery of a sale trade

Explanation

A freeze for debits blocks outward movement of securities such as transfers, pledges and sale deliveries, but credits remain allowed. Hence only the credit of incoming shares can be processed. The three debit transactions are all barred by the debit freeze.

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