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

A DP receives an account opening form for a minor, Aarav, aged 10, from his father. Which treatment is correct?

A minor's demat account is opened in the minor's name, operated by a natural or legal guardian who signs the documents. A minor cannot be a joint holder with another person, and there is no need to wait until the age of majority.

  1. AThe account is opened in the minor's name with the father as natural guardian signing, and no joint holder with the minor is allowedCorrect
  2. BThe account is opened jointly in the names of the minor and the father
  3. CThe account is opened only in the guardian's name since minors cannot hold securities
  4. DThe account is opened only after the minor turns 18

Explanation

A minor's demat account is opened in the minor's name and operated by the guardian, who signs the form. A minor cannot be a joint holder with anyone. The statements that minors cannot hold securities or must wait until 18 are wrong.

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