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

Ravi Menon, a resident individual, walks into a Depository Participant's office to open a demat account. Which of the following must the DP do as part of the account opening process before activating the account?

The DP must complete KYC and verify the applicant's identity, and obtain the signed account opening form, before activating the demat account. Issuer approval, minimum purchases or employer NOCs are not required for opening a demat account.

  1. ACarry out in-person verification of the applicant and obtain the signed account opening form with KYC detailsCorrect
  2. BObtain approval of the issuer company of every security he may hold
  3. CAsk him to first buy securities worth a minimum value
  4. DObtain a no-objection letter from his employer

Explanation

A DP must obtain a duly filled account opening form with KYC documents and complete verification of the applicant's identity. There is no requirement for issuer approval, a minimum purchase, or an employer's NOC. These distractors add conditions that the regulations do not impose.

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