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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities

A retail investor wants to hold Government Securities (G-Secs) in electronic form without opening a separate constituents' subsidiary general ledger (CSGL) account with a bank. Which facility allows the investor to hold G-Secs in the demat account itself?

Investors can hold Government Securities in their ordinary demat account with a depository participant, which keeps them in electronic form. This avoids the need for a separate CSGL account with a bank, because the depository and DP maintain the holding and its records.

  1. ADematerialisation of G-Secs through the depository, with the DP acting as the intermediary for holding them in the beneficiary owner accountCorrect
  2. BPhysical holding of G-Secs in the form of stock certificates only
  3. CHolding in a bank locker as a promissory note
  4. DHolding only through a mutual fund scheme

Explanation

G-Secs can be held in the demat account of a depository participant, so a separate CSGL account is not needed. The depository holds them in electronic form and the DP provides the account services. The other options describe forms of holding that do not make G-Secs available in the demat account.

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