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

A minor, Aarav, aged 10, is the beneficiary of a demat account opened by his father Kiran. Which treatment is correct?

A minor's demat account is opened in the minor's own name and operated by the guardian, whose details are recorded. A minor cannot hold it jointly with another person or operate it independently.

  1. AThe account is opened in the minor's name with the guardian acting on his behalf, and the guardian's details are recorded; joint holding with another person is not permittedCorrect
  2. BThe account can be opened jointly with the minor's mother as second holder
  3. CThe minor can operate the account independently once he turns 10
  4. DThe account must be in the guardian's name with the minor shown as nominee

Explanation

A minor's demat account is opened in the minor's name through a natural or legal guardian, whose details and PAN-based KYC are recorded. A minor cannot hold a joint account, nor operate it independently, and the account is held in the minor's own name rather than the guardian's.

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