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

Sunita, a Hindu Undivided Family's Karta, wants to open a demat account for the HUF, Sunita Rao HUF. Which of the following is correct about the account?

The account is opened in the HUF's name, represented by the Karta, and the HUF's own PAN is needed. It cannot be opened in the Karta's personal name or jointly with coparceners, and HUFs are allowed to hold demat securities.

  1. AThe account is opened in the name of the HUF, represented by the Karta, and the HUF's PAN is requiredCorrect
  2. BThe account must be opened in the Karta's personal name only, with the Karta's PAN
  3. CThe account can be opened as a joint account of all coparceners
  4. DThe account cannot be opened because HUFs are barred from holding securities in demat form

Explanation

An HUF demat account is opened in the HUF's name through the Karta, who signs on behalf of the HUF. The HUF's own PAN is required. Joint accounts with coparceners are not permitted, and HUFs may hold dematerialised securities.

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