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

A client wants to transfer shares to a friend's demat account at another DP without any exchange trade, as a gift. Which type of transfer is this?

This is an off-market transfer, because the securities move directly between two demat accounts without an exchange trade or clearing corporation settlement. On-market transfers settle exchange trades, while pool transfers and auction settlements also relate to exchange-based settlement, so none of them fit a gift.

  1. AAn off-market transferCorrect
  2. BAn on-market transfer
  3. CA pool-to-pool transfer
  4. DAn auction settlement

Explanation

A transfer done directly between two demat accounts without going through a stock exchange trade is an off-market transfer. An on-market transfer settles an exchange trade through the clearing corporation. Pool transfers and auctions relate to exchange settlement.

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