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

While opening an account, the DP finds that the client's signature on the form differs from that on the proof of identity. What is the DP's most appropriate action under account opening procedure?

The DP should resolve the discrepancy first by taking clarification or fresh documentation, and open the account only after the signature is verified. Proceeding on presence alone or relying on a broker's confirmation breaches due diligence.

  1. AProceed, since the client is physically present
  2. BObtain clarification or fresh proof and open the account only once the signature discrepancy is resolved and verifiedCorrect
  3. COpen the account and note the discrepancy in the register
  4. DAsk the client's broker to confirm the signature

Explanation

The DP must verify the client's signature and identity as part of due diligence. A discrepancy must be resolved with supporting documents before activation. Opening first and noting later weakens control, and a broker cannot substitute for the DP's verification.

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