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NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to Depository

A depository's rules say a securities holder may withdraw securities from the depository system and receive certificates. Mr. Arvind Shah, a demat account holder, wants his shares back in physical form. Which statement is correct?

He can have the shares rematerialised by submitting a request to his Depository Participant. The request goes to the depository and issuer's registrar, certificates are issued, and the electronic balance is reduced. The demat account itself need not be closed.

  1. AHe can do so through his DP by making a rematerialisation request, and the securities are removed from the depository record once processedCorrect
  2. BHe must close his demat account and cannot hold any other shares electronically afterwards
  3. CRematerialisation is done directly with the stock exchange, not the DP
  4. DRematerialisation is not permitted in any circumstance for listed securities

Explanation

Rematerialisation is the reverse of dematerialisation: the investor submits a request through the DP, which forwards it to the depository and the issuer or its registrar, who print the certificates; the electronic balance is then debited. Closing the account is not needed, and the exchange is not involved.

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