NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Trading and Settlement
Which statement about an off-market transfer instruction given by a client to a DP is correct?
An off-market transfer is used for transfers outside the exchange's clearing and settlement process, such as gifts between relatives or movement between a client's own accounts. It is not for exchange pay-in, and a client can submit it directly to the DP.
- AIt is used for transfers that are not settled through the stock exchange clearing mechanism, such as gifts between family membersCorrect
- BIt is used only for pay-in of exchange trades
- CIt can only be executed on a trading day when the exchange is open for settlement
- DIt cannot be given by a client directly to the DP
Explanation
Off-market transfers are used for transactions outside the exchange settlement system, such as gifts, inter-depository transfers or transfers between the investor's own accounts. They are not limited to pay-in and can be given by the client directly to the DP. The statement about trading days is wrong because depositories can process these on working days regardless of exchange settlement cycles.
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