NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners
A DP wants to work out which of its obligations arise purely because it is a depository participant, and which belong to a clearing member. Which of the following is an obligation specific to the DP?
The DP's specific obligation is to maintain client demat account records and process debits only on valid, authorised client instructions. Collecting margins, guaranteeing settlement and allocating trades are functions of brokers, clearing members or clearing corporations, not of the DP as such.
- ACollecting margins from clients for derivative positions
- BMaintaining client demat account records and ensuring that debits are made only on valid client instructionsCorrect
- CGuaranteeing settlement of trades to the exchange
- DAllocating trades to the client's trading account
Explanation
A DP keeps records of client demat accounts and must execute debits only on proper authorisation, such as a valid delivery instruction slip or an electronic instruction. Margins, settlement guarantees and trade allocation relate to the trading and clearing functions, so they are wrong.
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