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

Mr. Iyer bought shares and the broker's pay-out reached the clearing member's pool account. Which step brings the shares to Mr. Iyer's demat account?

Shares reach the buyer's demat account when the clearing member, after receiving pay-out from the clearing corporation, instructs the depository to transfer them from its pool account to the client's account. The DP and depository handle this electronically, with no physical certificates or direct issuer credit involved.

  1. AThe clearing corporation sends the pay-out file to depositories, and the shares are credited from the pool account to the client's account based on the clearing member's instructionCorrect
  2. BThe DP physically delivers share certificates to Mr. Iyer
  3. CThe issuer company credits the shares directly after a request from the client
  4. DThe stock exchange debits its own account and credits the client's account

Explanation

After pay-out, securities lie in the clearing member's pool account, and the clearing member gives instructions to the depository to credit client accounts. The depository then credits the investor's demat account. Physical certificates are not involved, and the exchange does not hold or credit client securities.

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