NISM Certifications · NISM-Series-VI: Depository Operations · Investor Services (NISM VI)
Arjun, the sole holder of a demat account, wants his DP to freeze the account because he will be travelling and wishes to prevent any debits. What is the correct position?
A beneficial owner can ask the DP to freeze the demat account, either for debits only or for debits and credits. The DP must act on a valid, verified request. Freezing is not restricted to court orders or to the depository.
- AFreezing is allowed only on a court order
- BA holder can request the DP to freeze the account for debits, or the whole account, and the DP must act on a valid requestCorrect
- COnly the depository can freeze accounts, never on investor request
- DFreezing is allowed only after the account is closed
Explanation
A beneficial owner may request the DP to freeze the account, either for debits only or for both debits and credits, and the DP acts on the properly made request after verifying the holder's identity. Freezing is not limited to court orders or the depository.
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