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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities

A client holds Government Securities (G-Secs) in a Subsidiary General Ledger (SGL) account with a bank and wants to hold them in demat form. Which of the following is the correct description of this arrangement in India?

Government securities can be held in a demat account with a depository participant, alongside the SGL and constituent SGL routes used by institutions. Individuals are allowed to hold them, and demat holdings can be traded before maturity, so the demat route is a valid option.

  1. AG-Secs can be held in a demat account with a depository participant, in addition to SGL and CSGL routesCorrect
  2. BG-Secs can only be held in physical stock certificate form by retail investors
  3. CG-Secs cannot be held by individuals under any route
  4. DG-Secs held in demat form cannot be sold before maturity

Explanation

Government securities can be held in dematerialised form in a depository account, and retail investors can hold them through a DP besides the SGL route used by institutions. The other options are wrong because physical holding is not the only route, individuals can hold G-Secs, and demat G-Secs are tradable before maturity.

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