Special Cases in Demat: Partial Demat, Lock-in and Transmission

A normal demat converts physical share certificates into electronic holdings in your demat account. You submit a Demat Request Form (DRF) with the certificates to your Depository Participant (DP). The DP forwards the request to the issuer or its Registrar and Transfer Agent (RTA) through the depository. After verification, the shares are credited to your account.

Special cases are variations on this flow. The core idea is simple: the electronic holding must match the physical holding in every respect that matters. That includes the holder names, the order of names, the nature of the security, and any restriction attached to it.

Lock-in is a period during which shares cannot be sold or transferred. Locked-in shares can be dematerialised. The lock-in does not disappear. The DRF must show that the shares are locked in, along with the reason for the lock-in and the release date. The depository records the lock-in against the holding in its records. The shares stay non-transferable until the release date.

Partly paid shares are shares on which the full amount has not yet been paid. They have a distinct ISIN from the fully paid shares of the same company. They can be held in demat form only in line with the depository's and issuer's rules. Do not assume they are credited like fully paid shares or under the fully paid ISIN. Confirm the exact eligibility rule in the NISM workbook.

Partial dematerialisation means you hold several certificates and send only some for demat. This is allowed, because demat is done certificate by certificate, not as an all-or-nothing request. The certificates you do not send stay in physical form. What is not allowed is splitting one certificate: a single certificate is dematerialised as a whole, with its full quantity. Also, all securities in a single request must be for the same account holder names in the same order. A separate DRF is needed for each account holder name and order.

Name mismatch and minors. The names on the certificate must match the names (and the order) in the demat account. If the names or order differ, the request is not processed as a normal demat. Certificates in a different order of joint holders cannot be dematerialised into an account with a different order as a normal request. They go through the transfer-cum-demat route. The DP submits the transfer-cum-demat request with the DRF and the certificates. The issuer or RTA effects the transfer into the name order of the demat account. The shares are then credited to the demat account. A minor's account is operated by the guardian. Shares held in a minor's name can be dematerialised only into the minor's account, with the guardian signing. Transmission is a different event. It applies when a holder dies, and the securities pass to the legal heir or surviving holder after the DP and depository follow the transmission procedure.

Demat vs rematerialisation. Demat converts physical certificates into electronic form. Rematerialisation does the opposite. It converts electronic holdings back into physical certificates. Remember the direction, because exam options often reverse them.

Use this method for any question on special demat cases.