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

A client lodges a DRF for physical shares held jointly by two persons, Mr. Rao and Mr. Nair, in that order on the certificate. The client holds a demat account with the DP in the same names. What condition applies for the demat credit to be made?

The demat account must carry the holders' names in the same sequence as on the share certificates. If the order differs, the request is rejected, so the investor would need to use a transposition route before dematerialising.

  1. AThe demat account must have the holders' names in the same order as on the certificatesCorrect
  2. BOnly the first holder needs an account; the second holder's name is irrelevant
  3. CJoint holdings cannot be dematerialised at all
  4. DThe names can be in any order if the DP agrees

Explanation

For dematerialisation, the names and their order on the certificates must match the account holders' names and order. If the order differs, the request is rejected, and a transposition route would apply to change the order. Joint holdings can certainly be dematerialised.

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