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

A DP submitted a demat request, but the issuer's registrar rejects it citing a signature mismatch on the certificate's transfer-related documents. What must the DP do with respect to the pending request in the depository system?

The DP should treat the request as rejected in the depository system and return the certificates to the investor along with the reason for rejection. No credit is made to the account, and the investor may submit a fresh request after rectifying the defect.

  1. AIgnore it until the investor complains
  2. BConfirm the request in the system as accepted anyway
  3. CReject the request in the system and return the certificates with the reason for rejection, while the DRN is closedCorrect
  4. DCancel the investor's demat account

Explanation

When a request is rejected, the securities are not credited. The pending demat request must be closed as rejected in the system and the certificates returned to the investor with the reason, who may resubmit after correcting the defect. Confirming it or closing the account is wrong.

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