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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination

A demat account has two joint holders, A (first) and B (second), with no nominee. A dies, and B wants to continue. B later also wants to add his wife as a new joint holder. Which statement is correct?

After A's name is deleted, the account becomes a single account in B's name. Holders cannot be added to an existing account, so for the wife to be a joint holder, a new account must be opened and securities transferred there.

  1. AB can add the wife by simple request because the account continues unchanged
  2. BThe account, after deletion of A, becomes a single-holder account in B's name, and adding a new holder requires opening a new account since changing holders is not allowed in an existing accountCorrect
  3. CThe account must be closed on A's death with securities rematerialised
  4. DAddition of the wife is automatic because she is B's spouse

Explanation

After deletion of the deceased holder, the account stands in B's name. Names of holders in an existing account cannot be added or altered by simple request; a new account with the desired holders must be opened and securities transferred. Closure and rematerialisation are not required.

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