NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination
A demat account has a single holder, who died without having made any nomination. The claimant is a legal heir. Which statement best reflects what the DP does, subject to its documentation requirements and the value of the holdings?
Where there is no nominee, the DP transmits securities to the claimant only against legal title documents such as a succession certificate, probate or letter of administration, or other prescribed alternatives such as indemnity and no-objection letters for lower-value holdings. It cannot transfer arbitrarily to a family member.
- ASecurities are transmitted to the claimant on the basis of documents such as a succession certificate, probate or other prescribed alternatives, depending on value and procedureCorrect
- BThe DP transfers securities to the oldest family member without documents
- CThe securities are credited to the depository's own account
- DThe DP asks the issuer company to cancel the shares
Explanation
Without a nominee, the claimant must establish title through legal documents such as a probate, letter of administration or succession certificate, or other prescribed documents like an indemnity and no-objection from other heirs for lower-value holdings. The DP cannot transfer to anyone arbitrarily and does not cancel shares. The depository does not take ownership.
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