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

Mr. Iyer sold shares through his broker on a T+1 rolling settlement basis. To deliver the shares to the clearing corporation, which instruction must his Depository Participant (DP) process from his demat account?

The client must give a delivery instruction to the DP, which moves the sold shares from his demat account to the broker's pool account or the clearing corporation's pay-in. Remat, pledge and freeze requests do not deliver securities for settlement of an on-market sale.

  1. AA delivery instruction (DIS) transferring the shares to the broker's pool account or as directed for pay-inCorrect
  2. BA remat request to convert the shares into physical form
  3. CA pledge creation request in favour of the broker
  4. DA freeze request on the entire demat account

Explanation

For an on-market sale, the client gives a delivery instruction so the securities move from the client's account to the broker's pool account (or directly to the clearing corporation's pay-in as arranged) before the pay-in deadline. Remat, pledge and freeze do not deliver securities for settlement.

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