NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
Mr. Nair wants to give his DP a delivery instruction slip (DIS) for a transfer. Which of the following is a correct DP practice before executing it?
The DP should verify the client's signatures against the specimen, confirm the slip belongs to a booklet it issued to the client, ensure no unauthenticated alterations exist and check that free balance is sufficient. Serial numbering or a phone call alone is not adequate validation.
- AExecute it without checking the signatures if the slip is serially numbered
- BVerify the signatures against the specimen, check the slip is from the DP-issued booklet and that free balance is sufficientCorrect
- CExecute only if the client calls to say it is coming
- DExecute it even if the slip has unauthenticated alterations
Explanation
A DP must verify that the DIS was issued to that client, that signatures match the specimen, that there are no unauthenticated alterations and that the securities are available in free balance. Serial numbers alone, phone calls or altered slips are not adequate grounds to execute.
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