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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 is transmission usually handled by the DP?

On the death of one holder of a joint demat account, the surviving holders continue as the account holders. The DP deletes the deceased holder's name after getting a copy of the death certificate, and does not transfer the securities to the deceased holder's legal heirs.

  1. AThe account is frozen until a probate is obtained for all holdings
  2. BThe securities are transferred to A's legal heirs, ignoring B and C
  3. CThe names of the surviving holders B and C continue, with A's name deleted, on submission of the death certificateCorrect
  4. DThe account is closed and all securities are sold by the DP

Explanation

In a joint account, on the death of a holder the surviving holders become the holders. The DP deletes the deceased's name after receiving the death certificate. The securities do not go to the heirs of the deceased, so option B is wrong.

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