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

A DP receives an application to open a demat account in the name of a minor, Aarav, aged 12, from his mother as natural guardian. Which of the following is correct?

A minor's demat account is opened in the minor's name and operated by the natural or legal guardian, who signs for the minor. It cannot be held jointly with anyone, and the minor cannot operate it until attaining majority.

  1. AThe account can be opened in the name of the minor with the guardian signing on his behalf, and the account cannot be held jointly with another personCorrect
  2. BThe account must be opened in the mother's name only
  3. CThe account can be opened jointly with the mother as second holder
  4. DThe minor account can be operated by the minor himself after age 12

Explanation

A minor's demat account is opened in the minor's name and operated by the guardian, who signs on his behalf. The account cannot be a joint account, and the minor does not operate it until reaching majority. Opening it in the mother's name only or as a joint account is not the prescribed procedure.

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