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NISM Certifications · NISM-Series-VI: Depository Operations · Special Services - Debt Instruments and Government Securities

Which statement about the settlement of corporate debt securities held in demat form is correct?

Dematerialised debt securities move between investors by electronic debit and credit of demat accounts based on delivery instructions. No physical certificate or endorsement is needed, which is the core benefit of holding debt securities in a depository.

  1. ADebt securities cannot be held in demat form at all
  2. BDebt securities in demat form are transferred between demat accounts through delivery instructions, without physical certificatesCorrect
  3. CDebt securities can be transferred only by endorsing a physical certificate
  4. DDebt securities can be settled only on the issuer's premises

Explanation

Corporate debt securities can be dematerialised and held in a depository account. Transfers happen through account debits and credits based on delivery instructions. Physical endorsement is not needed for dematerialised holdings.

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