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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 wishes to get the securities moved into his own demat account. What is this process of changing the holding in the depository system on death of a holder called?

The process is called transmission. It is the transfer of securities in a demat account to the legal heir or surviving holder on the death of a holder, as opposed to transposition, which only reorders the names of existing joint holders.

  1. ATransmissionCorrect
  2. BTransposition
  3. CRematerialisation
  4. DPledge invocation

Explanation

Transmission is the transfer of securities to the legal heir or survivor when a holder dies (or in similar events by operation of law). Transposition only changes the order of names among existing joint holders, rematerialisation converts demat holdings into physical form, and pledge invocation relates to enforcing a lender's security.

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