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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination

Mr. Gupta and his wife hold a joint demat account as first and second holders. They want to swap the order so that the wife becomes the first holder, with no change in the persons. What is this request called, and what is the outcome?

This is transposition. The same holders stay on the account but the order of their names changes, so the wife becomes first holder. It differs from transmission because no securities pass to a new person such as a legal heir.

  1. ATransposition, where the same holders remain but the order of names changesCorrect
  2. BTransmission, where the securities move to legal heirs
  3. CNomination, where a new person is added
  4. DRematerialisation, where physical certificates are issued

Explanation

Transposition is the change in the order of names of existing holders with the same set of persons. Because no beneficial ownership passes to a new person, it differs from transmission. Nomination and rematerialisation address different matters.

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