NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Dematerialisation
Mr. Kulkarni's dematerialisation request has been processed, and the registrar confirms it electronically to the depository. What happens to the securities in the issuer's records after confirmation?
After confirmation, the issuer's register shows the depository as the registered holder, while Mr. Kulkarni is recorded as beneficial owner in the depository's records. Ownership benefits stay with him, but legal registration vests in the depository.
- AThe depository's name is entered as registered holder, and Mr. Kulkarni becomes the beneficial ownerCorrect
- BMr. Kulkarni is entered as registered holder and the beneficial owner
- CThe DP's name is entered as registered holder
- DThe securities are cancelled and a fresh issue is made
Explanation
On dematerialisation the registrar changes the registered holder to the depository, while the investor remains the beneficial owner. The investor is not the registered owner, the DP is not entered, and securities are not cancelled and reissued.
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