NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Pledge and Hypothecation
Meena repays her loan fully. Which action releases her pledged shares in the depository system?
After repayment, the pledgee initiates a pledge closure request through its DP. When confirmed, the shares are unfrozen in Meena's demat account and she can deal with them freely. Release is not automatic and needs no reissue of certificates.
- AThe pledgee initiates a closure request which, once confirmed, unfreezes the shares in her accountCorrect
- BThe pledgor transfers the shares off-market to the pledgee
- CThe issuer reissues a new share certificate
- DThe shares are automatically released after 30 days
Explanation
Closure of a pledge is initiated by the pledgee after repayment and, on confirmation, the shares are unfrozen in the pledgor's account. There is no automatic release and no physical certificate reissue.
Did you get it right without looking?
One question tells you little. A timed set on Special Services - Pledge and Hypothecation shows your real accuracy, how long you take and where you lose marks.
More Special Services - Pledge and Hypothecation questions
- A pledgor has defaulted on a loan. The pledgee wants to realise the security. Which action does the pledgee initiate through its DP?
- A pledgor wants to close a pledge after repaying the loan. Which statement describes the standard procedure?
- Mr. Sanjay pledged 1,000 shares of a company to a bank. The company later announces a bonus issue and a cash dividend while the shares remai…
- Mr. Rao has pledged 500 shares with a lender and wishes to close the pledge after repaying the loan. Which statement is correct?
- A beneficial owner has pledged shares under the depository pledge facility. Which statement correctly describes the position of the securiti…
- Mr. Raman pledged 500 shares of an Indian company with a bank, and the pledge was confirmed. During the pledge, the company declares a cash …