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

Mr. Kapoor's dematerialisation request was rejected by the RTA because the signature on the DRF did not match the specimen with the issuer. What does the DP do with the rejected request and the securities?

The DP receives the certificates back with the rejection reasons and returns them to the client, who must rectify the defect and resubmit. No demat credit is given, and the certificates are neither destroyed nor kept with the depository.

  1. AReceives the certificates back with a rejection memo and returns them to the client after recording the reasonsCorrect
  2. BCredits the demat account provisionally and corrects later
  3. CDestroys the certificates as they are already cancelled
  4. DSends the certificates to the depository for safe custody

Explanation

On rejection, the RTA returns the documents with a rejection reason to the DP through the depository records, and the DP returns them to the client. Provisional credit is never given before confirmation. The certificates are not destroyed because a rejection means the demat did not take place, and the defacing is cancelled by the process of rejection handling.

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