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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 Meera, Rohan and Sunil in that order, and Rohan dies. What is the correct treatment of the account by the DP?

The account continues in the names of the surviving joint holders, Meera and Sunil. The DP deletes Rohan's name on receiving the death certificate. The account is not frozen or closed, and the deceased holder's heirs do not receive his share through the DP.

  1. AThe account is frozen until legal heirs of Rohan obtain a succession certificate
  2. BThe account continues in the names of Meera and Sunil after the DP records Rohan's death on production of the death certificateCorrect
  3. CRohan's share is transferred to his heirs automatically
  4. DThe account is closed and securities are sold

Explanation

In a joint account, on the death of a joint holder the surviving holders continue to operate the account. The DP deletes the deceased holder's name after receiving a copy of the death certificate. Rohan's heirs do not get the securities through the DP in this case.

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