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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Account Opening

Mr. Arvind Mehta wants to open a demat account with a DP. Under the standard account opening process, who must be given a copy of the executed Rights and Obligations document and the tariff schedule?

The account holder must be given a copy of the executed account opening agreement, including the Rights and Obligations document and tariff schedule, at the time the account is opened. This ensures the client knows the terms and charges. It is not meant only for the depository, exchange or clearing corporation.

  1. AOnly the clearing corporation
  2. BThe account holder, free of cost, at the time of account openingCorrect
  3. COnly the stock exchange where the investor trades
  4. DThe depository, which keeps it on behalf of the investor

Explanation

At the time of opening the account, the DP must give the client a copy of the agreement with the signed rights and obligations document and the tariff schedule. This is meant to make the client aware of the terms and charges. Giving it only to the exchange, clearing corporation or depository would not serve that purpose.

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