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

Mr. Shah's demat request was rejected by the RTA because the signature on the Demat Request Form did not match the company's records. What is the correct next step in the process?

After a rejection, the documents and the rejection reason come back through the depository to the DP, who returns them to the investor. The investor must fix the defect, such as a signature mismatch, and submit a fresh demat request. No credit is made meanwhile.

  1. AThe depository informs the DP, which returns the rejected certificates and the reason to the investor, and a fresh request is needed after correctionCorrect
  2. BThe depository credits the shares anyway and corrects later
  3. CThe DP destroys the certificates
  4. DThe stock exchange re-verifies the signature and approves the credit

Explanation

On rejection, the RTA returns documents with the reason via the depository to the DP, who hands them to the investor. The investor rectifies the defect and submits a fresh demat request. No credit is given for a rejected request, and the DP must not destroy certificates.

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