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NISM Certifications · NISM-Series-VI: Depository Operations · Foreign Portfolio Investors (FPI)

A DP is servicing a newly registered FPI. The FPI's global custodian asks which account type the FPI must use to hold Indian securities in dematerialised form. What is the correct response?

The FPI must hold its Indian securities in a demat account with a depository participant, typically a custodian acting as DP. Physical holding, a BSDA meant for small resident individuals, or a joint account with a resident are not the correct route.

  1. AA demat account opened with a depository participant, usually through a custodianCorrect
  2. BOnly a physical certificate holding arrangement
  3. CA basic services demat account (BSDA) only
  4. DA joint account with a resident Indian individual

Explanation

FPIs hold securities in dematerialised form in a demat account with a DP, generally a custodian-DP. BSDA is meant for small retail resident individuals, and physical holding or joint accounts with residents are not the route.

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