NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
A client sold shares through a broker and wants to deliver them from the demat account to settle the obligation. Which instruction is the standard way for the client to move the shares to the broker's pool account for an on-market trade?
The client gives an on-market delivery instruction, which moves the shares from the client's demat account to the clearing member's pool account for settlement of the exchange trade. Off-market transfers are for deals outside the exchange settlement system, so they are not the standard route.
- AOff-market transfer instruction to any account of the broker
- BPledge instruction in favour of the broker
- COn-market delivery instruction to the clearing member's pool accountCorrect
- DRemat request to the issuer company
Explanation
For trades on the exchange, the seller gives an on-market delivery instruction that debits the client's account and credits the clearing member's pool account. An off-market transfer is used for transactions not settled through the exchange's clearing system, so it is not the standard route here. Pledge and remat do not settle a sale.
Did you get it right without looking?
One question tells you little. A timed set on Functions of Depository Participant - Trading and Settlement shows your real accuracy, how long you take and where you lose marks.
More Functions of Depository Participant - Trading and Settlement questions
- Arjun's broker failed to deliver shares bought by Arjun, and the exchange conducted an auction. Under this process, the shortfall in deliver…
- A client sold shares through a broker and wants the demat account debited for the settlement. Which instruction is normally used to move the…
- Which statement about an off-market transfer instruction given by a client to a DP is correct?
- After a market trade, a buyer finds that shares have not been credited to his demat account although the broker received them in pay-out. Wh…
- A client bought shares on the exchange and the clearing corporation has credited them on the pay-out day. Into which account of the client a…
- A clearing member has to deliver securities for pay-in of a trade on the exchange. Which account is typically credited with the securities b…