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

Meena bought shares and the broker received them in the clearing member's pool account on pay-out day. What must happen for the shares to reach Meena's demat account?

The clearing member must instruct its DP to transfer the shares from its pool account to Meena's beneficiary account. Pay-out first credits the pool account, and the onward transfer to the client completes delivery. No reissue by the issuer or new account is needed.

  1. AThe clearing member must give instructions to transfer them from the pool account to her beneficiary accountCorrect
  2. BMeena must reapply for a new demat account
  3. CThe issuer must reissue the shares to her
  4. DThe shares stay in the pool account permanently

Explanation

After pay-out, securities are credited to the clearing member's pool account. The clearing member then instructs its DP to transfer them to the client's beneficiary account. Reissue by the issuer is unnecessary since the shares are already dematerialised.

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