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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities

A DP is handling a corporate bond held in demat form. On the record date for interest payment, the depository gives the issuer's registrar a benefit file. For a debt instrument, what determines who receives the interest payment?

Interest is paid to those shown as beneficial owners in the depository's records as at the record date. Neither the original subscriber nor anyone buying after the record date qualifies merely on that basis, and DP size is irrelevant.

  1. AThe holder of the security in the depository records as at the record dateCorrect
  2. BThe person who held the security on the issue date
  3. CThe DP with the largest number of clients holding the bond
  4. DThe person who bought the bond after the record date

Explanation

Interest is paid to holders whose names appear as beneficial owners in the depository records at the record date. The issue date holder and post-record buyers are not entitled by that reason. DP size is irrelevant.

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