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

Mr. Iyer submits physical share certificates with a Dematerialisation Request Form (DRF) to his Depository Participant. Which step does the DP take first after verifying the documents and accepting the request?

The DP generates a demat request number and electronically sends the request to the issuer or its RTA through the depository, then forwards the physical certificates. Credit to the client's account happens only after the issuer or RTA confirms the dematerialisation.

  1. ACancels the certificates directly at the company's registered office
  2. BGenerates a demat request number and sends the request electronically to the issuer or its Registrar and Transfer Agent through the depositoryCorrect
  3. CCredits the shares to Mr. Iyer's account immediately before sending anything to the issuer
  4. DReturns the certificates to Mr. Iyer and asks him to approach the RTA himself

Explanation

After scrutinising the DRF and certificates, the DP generates a unique demat request number and sends an electronic request to the issuer/RTA via the depository, and forwards the physical documents. The shares are credited only after the issuer confirms. Crediting immediately would be wrong because confirmation is required.

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