Skip to content

NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Public Offering / Corporate Actions

During an IPO, an investor applies for shares and is allotted 50 shares by the issuer. How does the depository system give effect to the allotment when the investor holds a demat account?

The issuer, through its registrar, passes the allotment details to the depository, which credits the 50 shares directly to the investor's demat account. No physical certificate or demat request is needed because the shares are issued in electronic form.

  1. AThe issuer sends physical certificates, which the DP dematerialises later
  2. BThe issuer provides allotment details to the depository through the registrar, and the shares are credited to the investor's demat accountCorrect
  3. CThe investor must submit a demat request form for the allotted shares
  4. DThe stock exchange credits the shares directly to the investor's bank account

Explanation

For public issues in demat mode, the issuer or its registrar gives the allotment details to the depositories, and the securities are credited to the beneficiary owner accounts of allottees. No DRF is needed because the shares were never issued in physical form. Banks do not hold securities, and exchanges do not credit them.

Did you get it right without looking?

One question tells you little. A timed set on Special Services - Public Offering / Corporate Actions shows your real accuracy, how long you take and where you lose marks.

Practise Special Services - Public Offering / Corporate ActionsFree diagnostic mock

More Special Services - Public Offering / Corporate Actions questions