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

A client gave a delivery instruction for an off-market sale to a friend, with the transaction priority set for an effective date in the future. On which basis will the depository normally process the transfer when both sides' instructions are in place?

The transfer is processed on the date specified in the instructions, provided the instructions match where required and the delivering account has enough free balance. It does not need approval from SEBI or the issuer's board for each transfer, nor is it executed regardless of the date.

  1. AOn the settlement or execution date specified in the instructions, subject to matching and sufficient free balanceCorrect
  2. BImmediately regardless of the date given
  3. COnly after SEBI approves each transfer
  4. DOnly after the issuer's board meets

Explanation

Off-market transfers are executed on the date given in the instructions, provided matching (where required) is done and the delivering account has sufficient free balance. No regulator or issuer approval is needed for each transfer.

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