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

Mr. Raghav Iyer, the sole holder of a demat account, has registered a nominee. After his death, the nominee approaches the DP for transmission of the securities. Which statement best describes the nominee's position under the depository framework?

Where a sole holder has registered a nomination, the nominee can claim the securities after the holder's death by submitting the required documents, and the securities are transmitted to the nominee's demat account. The nominee needs no court appointment or heirs' consent, but cannot sell without first having an account.

  1. AThe nominee becomes the beneficial owner of the securities held in the account, subject to the prescribed documentationCorrect
  2. BThe nominee can only hold the securities until the court appoints an executor
  3. CThe nominee must wait for the legal heirs to give a no-objection before any action
  4. DThe nominee can sell the securities without any account being opened in the nominee's name

Explanation

A nomination lets the nominee claim the securities of a deceased sole holder on submitting the death certificate and the required documents. Transmission happens into the nominee's own demat account. The other options add conditions or permissions that the framework does not provide.

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