NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Pledge and Hypothecation
Priya has repaid her loan fully. How is the pledge on her securities released in the depository system?
The pledgee initiates a closure instruction through its DP after repayment, and the depository then releases the securities from the pledged status back into the pledgor's free balance. Nothing happens automatically, and no new account is needed.
- AThe pledgee gives a closure instruction through its DP and the securities are unfrozen in Priya's accountCorrect
- BThe issuer company issues a fresh certificate
- CPriya must open a new demat account
- DThe pledge lapses automatically after 30 days
Explanation
After repayment, the pledgee initiates a closure request through its DP, and the pledged securities are unmarked and returned to the free balance of the pledgor. Pledges do not lapse automatically, and no new account or certificate is needed.
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