NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
A client sells shares through a stock broker on the exchange. To settle the sale, the client's demat account must be debited. Which instruction is normally used by the client to authorise this delivery to the broker's pool account for settlement?
The client uses a Delivery Instruction Slip, or an equivalent electronic instruction, to tell the DP to debit the demat account and deliver the securities for an on-market sale. Other forms such as nomination or remat requests serve different purposes and do not settle a trade.
- ADelivery Instruction Slip (DIS) or an equivalent electronic instruction giving the on-market transfer detailsCorrect
- BA nomination form submitted to the issuer company
- CA pledge invocation request sent to the clearing corporation
- DA remat request submitted to the registrar
Explanation
For an on-market sale, the client gives a DIS (or e-instruction) to the DP to move securities from the client's account to the broker's pool account or to the clearing corporation as per the settlement. Nomination, pledge invocation and remat requests serve different purposes and do not deliver shares for a market sale.
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