Asha has bought shares through her broker. She wants the broker to deliver the shares directly into her beneficial owner account. Besides giving the details of her demat account, whom must she instruct to take delivery of the securities?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Her depository participant
Option (1) Her bank — Incorrect. The bank account is used for cash transactions in the securities market. Shares are not delivered into it.
Option (2) The stock exchange — Incorrect. On the pay-out day the exchange delivers the shares to the other broker. Investors give it no delivery instructions.
Option (3) Her depository participant — Correct. The broker can deliver shares in demat form directly to the investor’s demat account. For this, Asha gives her demat account details and instructs her depository participant to take delivery in her beneficial owner account.
Option (4) The depository directly — Incorrect. The depository deals with investors through depository participants, its contact points with investors.
NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 9. On the T+2 day, the exchange will deliver the share or make payment to the other broker. This is called the pay-out day. The broker then has to make payment to the investor within 24 hours of the payout day since he has already received payment from the exchange. |