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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination

A minor's demat account holds securities. Which feature applies to nomination for that account?

The guardian of a minor can make a nomination on the minor's behalf in the demat account. If the minor dies, the securities are transmitted to the nominee. The minor cannot sign the nomination himself because he lacks the capacity to contract.

  1. AThe guardian can nominate, and a nominee for a minor's account is not allowed under any case
  2. BA nomination for a minor's account can be made by the guardian, and the nominee is entitled to the securities if the minor diesCorrect
  3. CNo nomination can be made, so securities always go to the court
  4. DOnly the minor, by his own signature, can nominate

Explanation

A minor's demat account is operated by the guardian, who may make a nomination on behalf of the minor. If the minor dies, the securities are transmitted to the nominee. A minor cannot sign for himself, so option D is wrong.

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