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

A DP receives an account opening application from a client. Which of the following is the correct treatment of the Rights and Obligations document and tariff schedule under the Depositories regulations?

The DP must sign the prescribed agreement with the client and give a copy of the rights and obligations document and tariff. It cannot dilute the prescribed terms to the client's detriment, and the requirement applies to all clients.

  1. AThe DP may provide them only on the client's request
  2. BThe DP must enter into a agreement with the client in the prescribed form and give a copy of the rights and obligations document and tariff, and cannot alter the prescribed terms to the client's detrimentCorrect
  3. CThe DP can fix any terms by negotiation, including waiving the standard agreement
  4. DThe documents are required only for corporate clients

Explanation

The DP must sign the standard agreement with the client and give copies of the rights and obligations and charges. Terms cannot be varied to the client's disadvantage. They apply to all clients, not corporates alone, and are not provided only on request.

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