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

A DP receives a DIS from a BO for an off-market transfer. Which of the following checks, if skipped, would be the most serious lapse by the DP before executing the instruction?

The most serious lapse would be not verifying that the DIS is genuine, issued to that BO, and signed in agreement with the specimen signatures on record. This check guards against unauthorised transfers, whereas ink colour, recipient residence or market price are not required checks.

  1. AVerifying that the DIS is on the DP's stationery in blue ink
  2. BVerifying the BO's signature(s) against the specimen on record and that the slip is a genuine one issued to the BOCorrect
  3. CChecking that the receiving BO is a resident Indian
  4. DChecking the market price of the security on the date

Explanation

The DP must verify the authenticity of the DIS, including that it was issued to the BO and that the signatures match the specimen held at account opening. Skipping this risks unauthorised transfers. Ink colour, residential status of the recipient and market price are not mandatory checks for execution.

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