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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 minor, Aarav, aged 12, represented by his mother as guardian. Which is correct about operating the account?

A minor's demat account is opened in the minor's own name and operated by the guardian, who signs instructions. It cannot be held jointly with anyone, and the minor cannot sign delivery instructions personally.

  1. AThe minor can sign delivery instructions himself
  2. BThe account must be opened in the guardian's own name with no reference to the minor
  3. CThe account is opened in the minor's name with the guardian acting as natural guardian, and the minor's account cannot be a joint account with anyoneCorrect
  4. DMinor accounts can hold jointly with the guardian as second holder

Explanation

A minor's demat account is opened in the minor's name and operated by the natural or court-appointed guardian, who signs instructions. Joint holding with a minor is not permitted, and the minor cannot sign instructions himself.

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