Skip to content

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

A single-holder demat account has a nominee registered. The holder dies, and the nominee applies for transmission. Another relative objects, claiming a will names him heir. How does the DP treat the nominee's request?

The DP transmits the securities to the registered nominee on valid documents. The nominee's receipt does not defeat the rights of legal heirs under the will or succession law, so the dispute is settled between them, not by the DP dividing or rejecting the claim.

  1. AThe DP rejects it because a will always overrides nomination
  2. BThe DP transmits the securities to the nominee on valid documents, who holds them as per law and the holder's will or succession laws remain the legal entitlement of the heirsCorrect
  3. CThe DP divides the securities equally between the nominee and the relative
  4. DThe DP transfers the securities to the depository for safekeeping

Explanation

The DP's duty is to transmit to the registered nominee on valid documentation, since the nominee is the person who can be dealt with by the DP. The nominee then holds subject to the rights of legal heirs under succession law or the will, so a dispute is settled between them, not by the DP splitting the holding.

Did you get it right without looking?

One question tells you little. A timed set on Functions of Depository Participant - Transmission and Nomination shows your real accuracy, how long you take and where you lose marks.

Practise Functions of Depository Participant - Transmission and NominationFree diagnostic mock

More Functions of Depository Participant - Transmission and Nomination questions