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

Mr. Iyer holds shares in his demat account and wants to move them to the demat account of his brother at another DP, without any sale consideration being settled through a stock exchange. Which type of instruction does he submit to his DP?

He submits an off-market transfer delivery instruction. Moving securities between two demat accounts without an exchange trade and clearing corporation settlement is an off-market transfer, done through a delivery instruction slip or its electronic equivalent given to the DP.

  1. AOff-market transfer delivery instructionCorrect
  2. BOn-market transfer through the clearing corporation
  3. CRematerialisation request
  4. DFreeze request on the account

Explanation

A transfer of securities between two demat accounts outside the stock exchange settlement mechanism is an off-market transfer, carried out on a delivery instruction slip (DIS) or its electronic equivalent. On-market transfers are linked to exchange trades settled via the clearing corporation. Rematerialisation converts holdings back to physical form, and a freeze restricts the account.

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