Skip to content

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

Mr. Iyer, a BO, wants to transfer shares from his demat account to a friend's account in the same depository without any sale consideration being routed through the exchange. Which instruction type does he normally submit to his DP?

He submits an off-market transfer delivery instruction. Transfers between demat accounts that are not part of exchange settlement are processed as off-market transactions, whereas on-market instructions relate to trades settled via the clearing corporation.

  1. AOff-market transfer delivery instructionCorrect
  2. BOn-market delivery instruction to the clearing corporation
  3. CRematerialisation request
  4. DPledge creation request

Explanation

A transfer of securities between BO accounts outside the stock exchange settlement mechanism is an off-market transfer, effected through a delivery instruction slip (or electronic instruction). On-market instructions are for exchange-traded settlement obligations through the clearing corporation. Remat and pledge serve different purposes.

Did you get it right without looking?

One question tells you little. A timed set on Functions of Depository Participant - Account Operations shows your real accuracy, how long you take and where you lose marks.

Practise Functions of Depository Participant - Account OperationsFree diagnostic mock

More Functions of Depository Participant - Account Operations questions