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

A DP receives a demat request for shares, and the registrar finds that the signature on the transfer-related documents differs from the specimen. The registrar rejects the request. What is the correct course for the DP?

The DP should record the rejection in the system, receive the certificates back with the stated reason, and return them to the investor. The investor can rectify the defect and resubmit. Shares cannot be credited until the registrar confirms the dematerialisation.

  1. AReceive the rejected certificates back from the registrar with the rejection reason and return them to the investor after updating the system with the rejectionCorrect
  2. BCredit the shares to the client's account anyway and recover later
  3. CDestroy the certificates and inform the investor
  4. DSend the certificates to SEBI for resolution

Explanation

When a request is rejected by the issuer or registrar, the depository is informed of the rejection through the system, and the certificates are returned via the DP to the investor with reasons. The investor may rectify the defect and resubmit. Crediting shares without confirmation would be wrong.

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