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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Transmission and Nomination

Suresh, a holder in a demat account with a nominee, dies. The nominee Deepa submits a transmission request with the death certificate. Which statement best describes the position of the DP?

The DP may transmit the securities to the nominee after verifying the request, death certificate and identity proof. A succession certificate or probate is not demanded where a valid nomination exists, and distribution among heirs by the DP is not required.

  1. AThe DP may transmit the securities to the nominee after verifying documents and need not ask for a succession certificate, subject to the depository's procedureCorrect
  2. BThe DP must wait for a court probate in every case
  3. CThe DP must transfer the securities to all legal heirs equally regardless of nomination
  4. DThe DP may transmit securities only after the nominee sells them

Explanation

Where a valid nomination exists, the DP transmits securities to the nominee on verification of the death certificate and identity documents, without insisting on succession certificate or probate. The nominee then holds them as per law for the legal heirs. Equal division to heirs ignores the nomination, so that option is wrong.

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