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NISM Certifications · NISM-Series-VI: Depository Operations · Depository and its Business Partners

Which of the following is the primary function of a Clearing Member in relation to the depository, when settling a market trade for a client?

A clearing member uses its demat accounts with a DP to deliver securities for pay-in to the clearing corporation and to receive pay-out, following the settlement schedule. It does not open accounts without a DP, issue securities or approve dematerialisation requests.

  1. ADelivering securities from its pool account to the clearing corporation account and receiving securities for pay-out in its settlement account as per the settlement scheduleCorrect
  2. BOpening demat accounts for investors without any Depository Participant
  3. CIssuing new securities to investors upon an IPO allotment
  4. DApproving dematerialisation requests on behalf of the issuer

Explanation

Clearing members hold accounts with a DP and move securities for pay-in and receive pay-out as per the clearing corporation's instructions. They do not issue securities, approve demat for the issuer, or bypass DPs for account opening.

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