NISM Certifications · NISM-Series-VI: Depository Operations · Functions of Depository Participant - Dematerialisation
Ms. Kavita Menon's demat request for shares of an unlisted company was rejected by the RTA because the signature on the DRF did not match the company's records. What is the correct DP action regarding the certificates?
The DP should record the rejection in the depository system and return the certificates to the investor along with the reasons for rejection received from the RTA. The investor can then rectify the defect, such as a signature mismatch, and submit a fresh demat request.
- ACancel the certificates and credit the account anyway
- BRetain the certificates and ask the investor to collect them in the next year
- CReturn the certificates with the rejection reason after the DP receives them back, and record the rejection in the systemCorrect
- DDestroy the certificates because they have been surrendered
Explanation
On rejection, the RTA returns the certificates with reasons, and the DP, after confirming the rejection in the depository system, returns the documents to the investor, who can correct the defect and resubmit. Crediting without confirmation is impermissible, and destroying certificates is wrong.
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