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

Mr. Desai's demat request was rejected by the issuer because the signature on the certificates did not match the specimen records. The DP is to be informed of this. Which statement best describes the next step in the procedure?

The rejection is communicated through the depository to the DP, who returns the certificates to the investor along with the reason. After rectifying the defect, such as a signature mismatch, the investor must submit a fresh demat request. No provisional credit is given and the DP cannot correct signatures.

  1. AThe depository communicates the rejection to the DP, which returns the certificates to the investor with the reason, and a fresh request is needed after rectificationCorrect
  2. BThe securities are automatically credited to the investor's account as a provisional entry
  3. CThe certificates are destroyed by the registrar and the investor must claim compensation
  4. DThe DP must itself correct the signature and resubmit the same request without informing the investor

Explanation

On rejection, the request is reported back through the depository to the DP, and the certificates are returned with reasons for rejection. The investor must rectify the defect and submit a fresh request. No provisional credit is given and the DP cannot alter signatures.

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