NISM Certifications · NISM-Series-VI: Depository Operations · Foreign Portfolio Investors (FPI)
A DP is opening a demat account for a newly registered FPI. Which statement about the account and its operation is correct?
An FPI must open a demat account with a depository participant and hold its Indian securities in dematerialised form. It also appoints a custodian. Physical holding or holding in the DP's name is not allowed.
- AThe FPI can hold securities only in physical form
- BThe FPI must open a demat account with a DP and its securities are held in dematerialised formCorrect
- CThe FPI may hold securities in the DP's own name
- DThe FPI cannot appoint a custodian
Explanation
FPIs must hold securities in dematerialised form through a demat account with a depository participant and must appoint a custodian of securities. Holding in physical form or in the DP's name is not permitted.
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