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NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

A DP holds an Aadhaar-verified client's account. The client asks why the DP must maintain a Client Master Report and Transaction records of clients and make them available to the depository. Which statement best describes the basis for this requirement?

DPs must maintain client records and permit inspection by the depository because the agreement with the depository and the governing SEBI regulations require it. This supports oversight and investor protection, and it is neither optional nor limited to stock exchanges or a one-month period.

  1. ADPs are required to keep client records and allow depository inspection as part of the agreement and the regulations governing DPsCorrect
  2. BIt is optional and only done if the client requests it
  3. COnly the stock exchange can inspect DP records
  4. DRecords need to be kept only for one month

Explanation

DPs are bound by the DP-depository agreement and SEBI regulations to maintain records for prescribed periods and permit inspection by the depository and SEBI. It is not optional, and the inspection power is not limited to exchanges. Retention periods are far longer than one month.

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