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

A client holds shares in a company that has just been placed under compulsory demat trading, but he holds some shares in a lot of fewer shares than the minimum and also holds certificates in the names of two joint holders in order A-B. He wants to dematerialise them into an account where the holders are in order B-A. What must happen?

The request cannot be processed as it stands, because the order of joint holders' names in the demat account must match the certificates. The investor must open an account with the same name order or get the shares transposed through the issuer first.

  1. AThe request cannot be accepted as is; the shares must first be transposed or the demat account must match the holders' names in the same orderCorrect
  2. BThe DP can credit the account regardless of the order of names
  3. CThe depository changes the order of names automatically
  4. DThe RTA must issue new certificates in the order B-A, then the DP credits on the same day

Explanation

Demat credit requires the account's holder names and their order to match the certificates. If the order differs, the investor must either open an account in the same order or first get the certificates transposed through the issuer. The DP or depository cannot alter the order on their own.

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