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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement

A clearing member has to deliver securities for pay-in of a trade on the exchange. Which account is typically credited with the securities by the clearing member's DP before they are sent to the clearing corporation?

Securities are moved to the clearing member's pool account. From the pool account they are transferred to the clearing corporation's account on the pay-in day, as per the settlement schedule. Investor margin pledge, income or escrow accounts are not part of this routine pay-in route.

  1. AThe clearing member's pool accountCorrect
  2. BThe investor's margin pledge account
  3. CThe clearing corporation's income account
  4. DThe issuer's escrow account

Explanation

For pay-in, investors' securities are first moved to the clearing member's pool account, and from there to the clearing corporation's account as per the settlement schedule. The other accounts named are not used in the standard pay-in path.

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