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

Mrs. Iyer submits a Dematerialisation Request Form (DRF) with her physical share certificates to her Depository Participant. Which of the following must the DP do on the certificates before forwarding them to the issuer's Registrar and Transfer Agent?

The DP must mark the certificates 'Surrendered for Dematerialisation' before forwarding them with the DRF to the RTA. This defacing prevents their reuse, while the securities are credited electronically only after the issuer's confirmation.

  1. ACancel the certificates by stamping or marking them 'Surrendered for Dematerialisation'Correct
  2. BReturn the certificates after photocopying them
  3. CEndorse the certificates in favour of the depository
  4. DHold the certificates until the issuer confirms the request

Explanation

The DP verifies the certificates and DRF, then defaces them by marking 'Surrendered for Dematerialisation' before sending them to the RTA with the DRF. Endorsing in favour of the depository is not required, as the depository only holds as registered owner in the records after demat, and the DP does not wait for confirmation before forwarding.

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