Unit ko samjho · NISM Series VI
Functions of Depository Participant – Transmission and Nomination
14 questions is unit mein
Sawaal aur jawaab English mein hain, kyunki NISM ka exam paper bhi English mein hota hai.
Is unit mein kya hai
- Securities move to an entitled successor after the sole holder dies, following the required documentary process. What is this process called?
- A sole demat holder dies leaving a valid recorded nominee. What should the nominee ordinarily submit to initiate the DP’s transmission process?
- A deceased sole holder left no nominee. A relative asks the DP to transfer all holdings based only on a verbal statement of relationship. What should the DP do?
- A and B jointly hold a demat account, with C recorded as nominee. A dies while B survives. Whose request is relevant for continuation or transmission under the joint-holder procedure?
- After one joint CDSL holder dies, the surviving holders complete the required documents. Must they always open a new account solely because of the death?
- The Karta of an HUF dies. Which approach correctly recognises the nature of the demat holding?
- A deceased holder’s account contains free shares and shares under an outstanding pledge. What must the DP recognise when processing transmission?
- Under SEBI’s modified nomination norms implemented from 1 September 2026, how many nominees may an investor provide for a demat account?
- An individual opens a new sole-holder demat account after 1 September 2026 and does not wish to nominate anyone. Which action satisfies the modified choice requirement?
- A jointly held account has a mode of operation that permits one holder to give certain instructions. Under the current nomination circular, who must consent to adding or changing a nominee?
- A demat holder nominates a minor under the modified 2026 form. Besides the nominee’s name and relationship, which information is mandatory because the nominee is a minor?
- A physical nomination form is executed with the investor’s thumb impression rather than a wet signature. What witness requirement applies under the modified 2026 norms?
- A valid nomination lists three nominees in order but specifies no allocation percentages. Exactly 100 indivisible shares of one ISIN must be allocated after transmission. Under the current equal-allocation and odd-lot rule, what allocation applies?
- A holder has already changed the nomination twice during the year. What does the current circular say about another valid change request?
Zaroori ideas
Practice bank se · 1
Securities move to an entitled successor after the sole holder dies, following the required documentary process. What is this process called?
Transmission records a change arising from death or another recognised operation of law rather than a living holder’s ordinary sale instruction. The DP verifies the entitlement and prescribed documents before processing. Dematerialisation changes holding form, while a stock split changes the security’s denomination and quantity. Remember: Distinguish a legal succession event from a voluntary transfer.
Hint Common mistake: Calling every demat debit and credit an off-market sale.
VI-063Practice bank se · 2
A sole demat holder dies leaving a valid recorded nominee. What should the nominee ordinarily submit to initiate the DP’s transmission process?
The nominee uses the prescribed succession-related process with the relevant proof of death, identity and account details. A recorded nomination simplifies identifying the person for the depository transmission route, but it does not authorise forged instructions or dispense with verification. This operational question does not determine competing inheritance claims under succession law. Remember: Use the correct legal-event procedure rather than manufacturing a normal transfer.
Hint Common mistake: Assuming nomination eliminates every documentary check.
VI-064Practice bank se · 3
A deceased sole holder left no nominee. A relative asks the DP to transfer all holdings based only on a verbal statement of relationship. What should the DP do?
Absence of nomination does not make securities ownerless or permanently non-transferable. The DP must use the applicable legal-heir route and documentary requirements, which can vary with circumstances and value. A verbal relationship claim is insufficient, but it would also be wrong to say that nomination is the only possible basis for transmission. Remember: No nomination means a different verification route, not automatic forfeiture.
Hint Common mistake: Replacing entitlement evidence with family familiarity.
VI-065Practice bank se · 4
A and B jointly hold a demat account, with C recorded as nominee. A dies while B survives. Whose request is relevant for continuation or transmission under the joint-holder procedure?
Nomination in a joint account is not a mechanism to displace a surviving joint holder on the first death. The survivor follows the prescribed process, supported by death and other required documents. The nominee’s operational role arises on the death of all joint holders, subject to the applicable framework. Remember: Check whether any joint holder survives before invoking the nominee route.
Hint Common mistake: Applying sole-holder nomination logic to the first death in a joint account.
VI-066Practice bank se · 5
After one joint CDSL holder dies, the surviving holders complete the required documents. Must they always open a new account solely because of the death?
The current CDSL instructions allow survivors to continue the same account after removal of the deceased holder’s name, or to use the prescribed new-account route. This is not permission to ignore death verification or updated records. Older material that presents a fresh account as the only possible route should not be applied without checking the revised instructions. Remember: Current survivor procedures may permit continuation. Verify the available route rather than relying on old forms.
Hint Common mistake: Treating the old fresh-account-only approach as permanent.
VI-067Practice bank se · 6
The Karta of an HUF dies. Which approach correctly recognises the nature of the demat holding?
An HUF account represents the family entity’s holding, not automatically the Karta’s individual property. Death of the Karta requires the applicable documentation and recognition of the succeeding representative. The DP must not substitute the sole-individual transmission route merely because a natural person signed earlier instructions. Remember: Identify the account’s legal holder before selecting a transmission procedure.
Hint Common mistake: Confusing an authorised representative with the owner in an individual capacity.
VI-068Practice bank se · 7
A deceased holder’s account contains free shares and shares under an outstanding pledge. What must the DP recognise when processing transmission?
Succession and encumbrance are separate issues. A claimant’s entitlement does not automatically cancel a valid pledge, earmarking or outstanding settlement obligation. The current instructions require relevant encumbrances to be resolved before the affected securities can be transferred through the transmission route. Unencumbered holdings should not be treated as though they all belong to the pledgee. Remember: Check both entitlement and security-level restrictions.
Hint Common mistake: Assuming a valid transmission claim makes all holdings freely transferable.
VI-069Practice bank se · 8
Under SEBI’s modified nomination norms implemented from 1 September 2026, how many nominees may an investor provide for a demat account?
The May 2026 circular, implemented from 1 September 2026, specifies up to three nominees. The effective date matters because earlier nomination circulars used a different framework. This question is dated to the current rule rather than to an older workbook or a superseded proposal. Remember: For changing nomination rules, retain both the applicable limit and its effective date.
Hint Common mistake: Using a superseded nominee limit without checking implementation.
VI-070Practice bank se · 9
An individual opens a new sole-holder demat account after 1 September 2026 and does not wish to nominate anyone. Which action satisfies the modified choice requirement?
The modified framework requires nomination for a newly opened single account unless the investor submits the prescribed opt-out declaration. It preserves an explicit choice, rather than treating silence as an opt-out. The DP should record the choice using the prescribed physical or electronic process. Remember: An explicit opt-out is different from failing to provide information.
Hint Common mistake: Assuming “nomination optional” always means the field may simply be ignored.
VI-071Practice bank se · 10
A jointly held account has a mode of operation that permits one holder to give certain instructions. Under the current nomination circular, who must consent to adding or changing a nominee?
SEBI expressly requires consent of all joint holders for providing or changing nomination, regardless of the mode of account operation. A general operating mandate should therefore not be extended automatically to nomination changes. The proposed nominee’s agreement cannot replace the holders’ required consent. Remember: Specific nomination consent rules override assumptions drawn from routine operating mandates.
Hint Common mistake: Treating nomination as just another single-signature account instruction.
VI-072Practice bank se · 11
A demat holder nominates a minor under the modified 2026 form. Besides the nominee’s name and relationship, which information is mandatory because the nominee is a minor?
The circular identifies name, relationship and, for a minor nominee, date of birth as mandatory information. Some other fields are optional under the prescribed format. The DP should distinguish the mandatory data needed to establish the nominee’s status from extra information that may be supplied voluntarily. Remember: Mandatory and optional nominee fields are not interchangeable.
Hint Common mistake: Rejecting a form for an optional field while overlooking a required minor-status detail.
VI-073Practice bank se · 12
A physical nomination form is executed with the investor’s thumb impression rather than a wet signature. What witness requirement applies under the modified 2026 norms?
The modified circular distinguishes a wet-signed form, for which witnesses are not required, from a thumb-impression form, which requires two witnesses with their names and addresses. The authentication method must therefore be checked before deciding that a form is complete. This question does not impose the thumb-impression requirement on ordinary signatures. Remember: Apply the witness rule to the actual method of execution.
Hint Common mistake: Carrying the no-witness rule from wet signatures across to thumb impressions.
VI-074Practice bank se · 13
A valid nomination lists three nominees in order but specifies no allocation percentages. Exactly 100 indivisible shares of one ISIN must be allocated after transmission. Under the current equal-allocation and odd-lot rule, what allocation applies?
Where percentages are not specified, the circular provides for equal allocation. An odd lot is transferred to the first nominee. Dividing 100 by 3 gives 33 whole shares each and one remaining share. The remainder goes to the first nominee, giving 34, 33 and 33. No share is cancelled merely because equal whole-number division is impossible. Remember: Use the default equal shares, then apply the specified treatment of indivisible remainders.
Hint Common mistake: Dropping a rounding remainder from the transmission total.
VI-075Practice bank se · 14
A holder has already changed the nomination twice during the year. What does the current circular say about another valid change request?
The circular does not limit the number of nomination changes or cancellations and requires acknowledgement of each instance. The change must still be authenticated and meet applicable consent requirements. Unlimited frequency does not mean that an unsigned or unauthorised request must be processed. Remember: No frequency cap does not remove authentication and recordkeeping duties.
Hint Common mistake: Inventing a limit because nomination has already been modified several times.
VI-076