NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Pledge and Hypothecation
In a depository pledge transaction, what is the party who creates the pledge by offering demat securities as security for a loan called?
The person who offers demat securities as security for a loan is the pledgor. The lender who receives the security interest is the pledgee. The pledgor continues to be the owner of the securities while they remain pledged.
- APledgee
- BPledgorCorrect
- CRegistrar
- DClearing member
Explanation
The BO who offers securities as collateral is the pledgor, while the lender who accepts them as security is the pledgee. The registrar and clearing member are not parties to the pledge.
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