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NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement

Which of the following is true of an off-market transfer of securities between two demat accounts?

An off-market transfer moves securities between demat accounts outside the stock exchange settlement system, for example a gift or private sale. The DP executes it on the account holder's signed delivery instruction slip, and the clearing corporation is not involved.

  1. AIt is settled by the clearing corporation of the exchange
  2. BIt is a transfer not routed through the stock exchange settlement, such as a gift or inter-account transfer, executed by the DP on a DISCorrect
  3. CIt can only be done between accounts held with different depositories
  4. DIt does not require any instruction slip from the account holder

Explanation

Off-market transfers occur outside exchange settlement, for reasons like gifts, family transfers or sale through private deals, and the DP executes them on the client's duly signed DIS. Clearing corporations handle only on-market trades. Transfers do not depend on using different depositories.

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