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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations

A demat account has a freeze placed at the BO's own request on the whole account. Subsequently, a DP receives a court order directing a freeze on a specific ISIN in the same account. Which statement is correct about lifting the freezes?

The BO's own request to unfreeze cannot lift the ISIN-level freeze imposed by a court order. Such a freeze is removed only in accordance with the order or a further direction of the authority that issued it, not by the BO or the DP on their own.

  1. AThe BO's request to unfreeze the account does not lift the ISIN-level freeze imposed under the court order, which can be removed only on the order's terms or further directionCorrect
  2. BThe BO's unfreeze request automatically lifts all freezes including the court-ordered one
  3. CThe DP may lift the court-ordered freeze after one month
  4. DThe depository must close the account until the matter is resolved

Explanation

A freeze imposed under a court or regulatory order is independent of the BO-initiated freeze. It can be removed only as per the order or a further direction by the authority concerned, not by the BO's own request or DP discretion.

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