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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. Before the DP forwards the documents to the issuer's Registrar and Transfer Agent, what must the DP do to the certificates?

The DP must deface each certificate by marking it 'Surrendered for Dematerialisation' and ensure the DRF is properly completed and signed, then forward them to the issuer's RTA. It does not tear, endorse or return the certificates to the client.

  1. AStamp the certificates 'Surrendered for Dematerialisation' and obtain the client's signature on the DRFCorrect
  2. BCancel the certificates by tearing them into two pieces
  3. CReturn the certificates to the client until the RTA confirms
  4. DEndorse the certificates in favour of the DP

Explanation

The DP verifies the DRF and certificates, and defaces each certificate by marking it 'Surrendered for Dematerialisation' before sending it to the RTA. Cancelling by tearing or endorsing in the DP's favour is not the procedure, and the documents must be forwarded rather than returned.

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