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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Operations

A DP receives a Delivery Instruction Slip for an off-market transfer. Which check should the DP carry out before processing the instruction?

The DP must verify that the slip is complete, has no unauthorised alterations, and that signatures tally with the specimen signatures on record before processing. This protects the investor against unauthorised transfers. Issuer approval, account vintage or market price confirmation are not conditions for executing such an instruction.

  1. AVerify that the signatures on the slip match the specimen signatures held in the account records and that the slip is complete and unalteredCorrect
  2. BConfirm that the target client has held the account for at least one year
  3. CObtain approval of the issuer company for each transfer
  4. DAsk the clearing corporation to confirm the market price of the security

Explanation

Before execution, the DP must verify that the DIS is a genuine one issued to the client, is properly filled without unauthorised alterations, and that the signatures match the specimen on record. There is no requirement of one-year account age, issuer approval for each transfer, or clearing corporation price confirmation.

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