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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement

In the depository system, which account receives securities from a clearing member's pool account on settlement pay-out when the beneficiary is a client?

Securities reach the client's beneficiary owner demat account. After pay-out the clearing corporation credits the broker's pool account, and the broker instructs transfer from the pool account to the client's account. The issuer or depository does not retain them.

  1. AThe clearing corporation's account is credited again
  2. BThe client's beneficiary owner demat account, as per the broker's pay-out instructionCorrect
  3. CThe issuer company's escrow account
  4. DThe depository's own settlement account permanently

Explanation

On pay-out, the clearing corporation gives securities to the broker's pool account, and the broker then instructs transfer from the pool account to the client's beneficiary account. The securities are not held by the issuer or the depository.

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