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

Ms. Kavita Nair holds shares in a joint demat account with her husband, with the operating instruction 'either or survivor'. She wants to know how DIS signing works for this account. Which is correct?

Either holder alone can sign the DIS because the joint account was opened with an 'either or survivor' operating instruction. The mode of operation chosen at account opening decides who may sign. Mandatory joint signing applies only if the account was set up to be operated jointly.

  1. AEither holder alone can sign the DIS, subject to the operating instructions given at account openingCorrect
  2. BBoth holders must always sign, irrespective of the instructions given
  3. COnly the first holder may sign, and the second never can
  4. DThe DP's authorised signatory signs on behalf of the holders

Explanation

For joint accounts, the mode of operation specified in the account opening form governs who signs. With 'either or survivor', any one holder can sign the DIS. Requiring both signatures would be correct only under a 'jointly' instruction, and a DP never signs for the BO.

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