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

A client's demat request for 500 shares was processed and the RTA confirmed it, but the request was initially rejected for a signature mismatch and the client later corrected it. For a rejected DRF, what is the DP's correct step regarding the certificates?

The DP should return the certificates to the client with the reason for rejection, once the rejection is communicated through the depository system. The client can then rectify the defect and resubmit a fresh request, since no credit can be given without confirmation.

  1. AReturn the certificates to the client along with the rejection reason, after the rejection is received through the depository systemCorrect
  2. BDestroy the certificates and ask for fresh ones
  3. CCredit the shares to the client's account anyway
  4. DSend the certificates to SEBI for verification

Explanation

When the issuer or RTA rejects a demat request, the rejection is communicated through the depository, and the DP must return the certificates to the client with the reason so the client can rectify and resubmit. Crediting without confirmation is not allowed.

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