NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
Mr. Rao sold shares through his broker on the T+1 rolling settlement cycle. To ensure the shares are delivered to the clearing corporation for the pay-in, which instruction should he give his Depository Participant?
He should submit a delivery instruction to his DP, transferring the shares from his demat account to the broker's designated clearing or pool account before the pay-in deadline. Pledge, remat or freezing do not move shares for settlement of a market sale.
- AA delivery instruction (DIS) transferring the shares from his demat account to the broker's pool or designated clearing account before the pay-in deadlineCorrect
- BA pledge instruction in favour of the broker
- CA remat request for the shares sold
- DA request to freeze the demat account
Explanation
For a market sale, the seller must deliver the securities for pay-in by giving a delivery instruction to his DP, moving them from his account to the settlement account designated for the broker or clearing member. Pledge, remat and freeze do not deliver securities for settlement.
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