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

A client wants to pledge G-Secs held in his demat account to raise a loan. Which statement regarding the Constituent SGL (CSGL) account facility is correct?

Investors can hold G-Secs in a Constituent SGL account maintained through an eligible DP that has an SGL account with the RBI. This is a book-entry holding in dematerialised form and the securities can be transferred, so it is not restricted to the RBI or to physical certificates.

  1. AInvestors can hold G-Secs in a CSGL account maintained with a DP, which is a form of demat holdingCorrect
  2. BCSGL accounts are available only to the RBI
  3. CCSGL holdings cannot be transferred
  4. DCSGL accounts are meant only for physical certificates

Explanation

A Constituent SGL account lets investors hold G-Secs in book-entry form through an eligible entity that holds an SGL account with the RBI. Holdings are in dematerialised form and can be transferred. Therefore, the statement that it is a demat-type holding is correct.

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