NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination
A DP receives a transmission request for a demat account of a deceased sole holder. The claimant is the nominee, and the value of securities is modest. Which of the following is the correct position regarding the nominee's claim?
The nominee can have the securities transmitted by submitting the claim form, death certificate and KYC with demat account details, without a succession certificate. The nomination does not override succession law, so legal heirs retain their rights against the nominee.
- AThe nominee, on submitting the claim form, death certificate and KYC and a demat account details, can have securities transferred to his account, and the nominee holds them as a trustee for the legal heirs in the sense that the nomination does not override succession lawCorrect
- BThe nominee must always obtain a court-issued succession certificate in every case
- CThe DP must transfer securities to all legal heirs equally regardless of the nomination
- DThe nominee becomes absolute owner free of claims of legal heirs under succession laws
Explanation
Where a valid nomination exists, the DP transmits securities to the nominee on production of the death certificate, claim form and KYC documents, without needing a succession certificate for the nominee route. Nomination does not extinguish rights of legal heirs under succession law, so the nominee is effectively accountable to them. Requiring a court certificate in every case or dividing among heirs ignoring the nomination is wrong.
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