NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Settlement Process
A broker receives a client's securities pay-out into its pool account on settlement day. Under SEBI's rules on handling client securities, within what time must the broker transfer the securities to the client's demat account?
The broker must transfer the securities to the client's demat account within one working day of receiving the pay-out. This prevents clients' securities from lingering in the broker's pool account and protects investors from misuse.
- AWithin one working day of the pay-outCorrect
- BWithin one calendar month
- CWithin one year
- DAt any time the broker chooses
Explanation
SEBI requires brokers to transfer the pay-out of securities to the client's demat account within one working day of the pay-out, so that clients' securities are not retained in the broker's pool account. A month or year would be non-compliant, and brokers cannot choose arbitrarily.
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