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

A DP is servicing a registered FPI that wishes to hold a demat account. Which statement about the FPI's demat account is correct?

An FPI must hold its securities in dematerialised form through a demat account with a depository participant. Physical holding is not permitted, depositories do not open accounts directly for clients, and a single account can hold multiple securities.

  1. AThe FPI may hold securities only in physical form
  2. BThe FPI must hold its securities in dematerialised form with a DPCorrect
  3. CThe FPI can open demat accounts only with the depository, not with a DP
  4. DThe FPI must open a separate demat account for each security

Explanation

FPIs must hold and transfer their securities only in dematerialised form, through a demat account opened with a DP. They cannot open accounts directly with a depository, and one account can hold many securities, so the other options are wrong.

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