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

A client sold shares through a broker and wants the demat account debited for the settlement. Which instruction is normally used to move the securities from the client's demat account to the broker's pool account?

The client gives a Delivery Instruction Slip, or an equivalent electronic instruction, to the DP. The DP uses it to debit the client's demat account and credit the broker's pool account for settlement. Transfer deeds apply to physical shares, and cheques deal with money rather than securities.

  1. ADelivery Instruction Slip (DIS) given to the DP, or its electronic equivalentCorrect
  2. BA cheque drawn in favour of the clearing corporation
  3. CA transfer deed signed by the client and the broker
  4. DA request letter to the company's registrar

Explanation

To deliver securities sold on an exchange, the client gives a valid delivery instruction (a DIS or an electronic instruction) to the DP. The DP then debits the client account and credits the broker's pool account. A transfer deed is used only for physical shares, and cheques deal with money, not securities.

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