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

Mr. Iyer submits physical share certificates to his Depository Participant for dematerialisation. Before forwarding the request to the Registrar and Transfer Agent, what must the DP do with the certificates?

The DP must deface the share certificates by marking them 'Surrendered for Dematerialisation' before forwarding them with the request to the RTA or issuer. This prevents reuse of the physical certificates while the electronic credit is processed.

  1. ACancel the certificates by marking 'Surrendered for Dematerialisation' on themCorrect
  2. BHand them back to the client after photocopying
  3. CSend them to the company's registered office by ordinary post
  4. DRetain them until the client's demat account completes one year

Explanation

On receiving the Demat Request Form with certificates, the DP verifies them and defaces them by stamping or writing 'Surrendered for Dematerialisation' so they cannot be reused. Only then are they sent to the RTA/issuer along with the request. Returning or holding them would not process the demat.

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