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

Which of the following statements about nomination in a demat account is correct?

Only individual account holders can nominate, and they may change or cancel the nomination during their lifetime. A nominee acquires no ownership rights while the holder is alive, and non-individuals like companies or trusts cannot make a nomination.

  1. AA nominee becomes the owner of the securities during the lifetime of the account holder
  2. BNomination can be made by a non-resident or a company in any account
  3. CA nominee can be appointed only by individual account holders, and nomination can be changed or cancelled by the holder(s) during their lifetimeCorrect
  4. DNomination is irrevocable once registered with the DP

Explanation

Only individuals can nominate; non-individuals such as companies, trusts and HUFs cannot. The nominee has rights only after the holder's death, and the holder can cancel or change the nomination at any time. The option stating that a company can nominate is therefore wrong, as is irrevocability.

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