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

Mr. Iyer, the sole holder of a demat account, has died. His son wants the shares in the account to be placed in his own account. In depository terminology, this change of ownership of securities on the death of a holder is known as:

The change of ownership of securities to a legal heir or nominee when a demat account holder dies is called transmission. It is different from transposition, which only reorders joint holder names, and from rematerialisation or a freeze, which do not transfer ownership on death.

  1. ATransposition
  2. BTransmissionCorrect
  3. CRematerialisation
  4. DFreeze

Explanation

Transmission is the process by which securities move to the legal heir or nominee when a holder dies. Transposition concerns a change in the order of names of joint holders. Rematerialisation converts electronic holdings to paper, and a freeze only restricts debits or credits.

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