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

Which of the following is the usual consequence when a BO's demat account is closed at the BO's request?

When a BO asks to close a demat account, the account must first hold no securities; any balance must be transferred to another demat account or rematerialised, and dues cleared. Securities are not auto-sold, retained by the DP, or handed to the issuer.

  1. AThe account must have nil balance of securities, or balances must first be transferred to another account, before closureCorrect
  2. BThe DP may keep the securities until the BO re-opens an account
  3. CThe securities are automatically sold at market price
  4. DThe securities are transferred to the issuer company

Explanation

Closure requires a zero balance. If securities remain, the BO must transfer them to another demat account (or rematerialise) and settle dues. Securities are never automatically sold or returned to the issuer.

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