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

Three persons hold a joint demat account in the order A, B, C. Holder A dies. For transmission of the securities, who is generally treated as the first holder afterwards, and what does the DP typically require?

When the first holder of a joint demat account dies, the surviving holder next in order, here B, becomes the first holder. The DP requires a request from the survivors with a copy of the death certificate. Securities are not sold, and A's heirs do not override the surviving joint holders.

  1. AB becomes first holder on submission of a request with A's death certificate copyCorrect
  2. BC becomes first holder automatically without any documents
  3. CThe securities are sold by the DP and proceeds paid to A's heirs
  4. DThe account is closed and securities go to A's legal heirs only

Explanation

For joint accounts, on a holder's death the surviving holders continue, and the next named holder, B, becomes first holder. The DP needs a request from the survivors along with a copy of the death certificate, as per its procedure. The DP does not sell securities, and heirs of A do not take over from surviving joint holders.

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