NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
A client who sold shares through a broker wants to deliver them for settlement. Which instruction does the client give to the DP to move the shares to the broker's pool account in advance of pay-in?
The client gives an early pay-in instruction. This lets securities be delivered ahead of the standard pay-in day for settlement of a sale. Pledge, off-market gifting and demat requests serve different purposes and do not deliver shares against an exchange trade.
- AEarly pay-in instructionCorrect
- BOff-market transfer instruction for gifting
- CPledge creation instruction
- DDemat request form
Explanation
Early pay-in allows a client to deliver securities to the clearing corporation ahead of the normal pay-in day, usually through an instruction that moves shares to the broker or clearing pool. Pledge creation creates a lien, not delivery for settlement. Off-market transfers are not linked to a trade on the exchange. A demat request converts physical shares to electronic form.
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