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

Mr. Raghav Iyer, a BO with a Delhi-based DP, wants to move 500 shares of a listed company to the demat account of his friend as a gift, without any trade on the exchange. Which type of instruction does he give his DP for this?

An off-market transfer instruction is correct. When shares move between two beneficial owner accounts directly, such as a gift, without any exchange trade or clearing corporation settlement, the DP processes it as an off-market transfer.

  1. AOff-market transfer instructionCorrect
  2. BOn-market delivery instruction
  3. CPledge creation instruction
  4. DRemat request

Explanation

A transfer made directly between two BO accounts without going through an exchange settlement is an off-market transfer. On-market delivery is linked to exchange trades and clearing corporation settlement. Pledge creates a lien for borrowing and remat converts holdings back to physical form, so neither suits a gift.

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