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

A DP receives an account opening form from an applicant. Which of the following is the DP's obligation before activating the account?

Before activating a demat account, the DP must complete KYC with the required verification and sign the prescribed standard agreement with the client. No SEBI approval per account, issuer NOC or minimum securities balance is needed.

  1. AEnter into a agreement with the client in the prescribed standard form and complete KYC with in-person verification as requiredCorrect
  2. BObtain approval from SEBI for each individual account
  3. CObtain a no-objection letter from the issuer companies whose shares the client will hold
  4. DCollect a minimum balance of securities from the client

Explanation

A DP must execute the standard client-DP agreement and complete KYC, including in-person verification as applicable, before opening the account. SEBI approval per account, issuer NOCs and minimum securities balance are not requirements.

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