Skip to content

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

Mr. Sameer Khan, a BO, notices that his demat statement shows a pledged quantity of 300 shares out of 1,000 shares of a company. What quantity can he freely sell or transfer, assuming no other restrictions?

He can freely deal with 700 shares. The pledge locks only the 300 shares pledged, so the free balance is 1,000 minus 300. The pledged quantity cannot be sold or transferred until the pledge is closed or invoked.

  1. A1,000 shares
  2. B300 shares
  3. C700 sharesCorrect
  4. DZero shares, since pledge freezes the whole holding

Explanation

Pledged shares are moved to a separate pledged status and cannot be freely transferred. Free balance equals 1,000 − 300 = 700 shares. Selling 1,000 ignores the pledge, 300 is the pledged quantity itself, and pledge applies only to the quantity pledged, not the whole holding.

Did you get it right without looking?

One question tells you little. A timed set on Functions of Depository Participant - Account Operations shows your real accuracy, how long you take and where you lose marks.

Practise Functions of Depository Participant - Account OperationsFree diagnostic mock

More Functions of Depository Participant - Account Operations questions