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

Mr. Rohit and his wife Mrs. Anita open a joint demat account with Rohit as first holder. Later, the DP receives a request to close the account. Which statement is correct?

A joint demat account is closed on a written request signed by all joint holders, after any securities balance has been moved to another account. The second holder alone, the broker, or the DP on its own for inactivity cannot close it.

  1. AClosure request must be signed by all the joint holders, and the account must have no balances or pending transactions beyond what is transferredCorrect
  2. BOnly the second holder can request closure
  3. CThe DP may close it without any request when no transaction occurs for a year
  4. DThe closure request needs only the stock broker's signature

Explanation

A client-initiated closure requires a request signed by all joint holders, with balances transferred to another account before closing. The second holder alone has no such power, DPs cannot close accounts merely for inactivity, and a broker has no authority unless a specific arrangement exists.

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