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

An investor's demat request was rejected by the registrar because the signature on the certificate did not match the company's records. What is the correct step for the DP regarding the certificates?

The DP should return the rejected certificates to the investor with the reason for rejection, and the investor may resubmit a fresh demat request after rectifying the defect. No provisional credit is given, the certificates are not destroyed, and the stock exchange has no adjudication role.

  1. AReturn the certificates to the investor along with the rejection reason, and the investor may resubmit a fresh request after rectificationCorrect
  2. BDestroy the certificates since they are already defaced
  3. CCredit the securities provisionally to the account until the signature is verified
  4. DForward the certificates to the stock exchange for adjudication

Explanation

When a request is rejected, the securities are not credited. The DP receives the certificates back via the registrar, and the investor is informed of the reason. After rectifying the defect, the investor can submit a fresh request. Provisional credit is not allowed and certificates are never destroyed by the DP.

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