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

An investor holds 300 shares in the name of Mr. A. Shah and 200 shares in the name of Mr. Arvind Shah, same person, as physical certificates. He holds a demat account in the name 'Arvind Shah'. Which treatment of the first lot is correct for dematerialisation?

The name mismatch must be resolved with supporting proof, such as an affidavit or identity evidence accepted by the issuer, because certificate names must match the demat account holder's names. Without this, the request can be rejected. Similar-looking names alone do not allow automatic dematerialisation.

  1. AIt can be dematerialised without any further documents since the name is similar
  2. BIt cannot be dematerialised at all under any circumstance
  3. CIt can be dematerialised only after the demat account is closed
  4. DIt requires the name mismatch to be resolved, with the DP/issuer getting supporting proof such as a gazette notification or affidavit as per procedure, since certificate names must match the account holder's nameCorrect

Explanation

Securities can be dematerialised only into an account whose holder names match the certificate names in the same order. For a variation of name, the issuer/RTA requires supporting evidence such as an affidavit or an identity document confirming they are the same person. It is not rejected outright and the account need not be closed.

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