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

A demat account is held jointly by A (first holder), B and C. A dies. How does the DP deal with the account under the transmission process?

The surviving holders B and C continue to hold the account once the death certificate is submitted. A's name is deleted and B becomes the first holder. Legal heirs do not automatically join the account, and no compulsory sale or court order is needed.

  1. AThe account is closed and all securities are sold by the DP
  2. BB and C continue as the surviving holders, with B becoming the first holder, after the DP is given the death certificateCorrect
  3. CThe legal heirs of A automatically become joint holders with B and C
  4. DThe securities are frozen until a court order is obtained in all cases

Explanation

In a joint account, on the death of a holder the surviving holders continue to hold the securities on submission of the death certificate. The name of the deceased is deleted and the next holder becomes first holder. Legal heirs do not automatically join, and a court order is not required in every case.

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