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

Ms. Kavita Rao submitted a DRF for 500 shares. The issuer's RTA finds the signature on the certificate does not match its records and rejects the request. What is the correct consequence in the demat process?

The demat request is rejected through the depository system, and the RTA returns the certificates to the DP with the reason for rejection. The DP then returns them to the client. No shares are credited to her account because dematerialisation was never completed.

  1. AThe depository credits the shares provisionally to her account
  2. BThe DP debits the shares from her account automatically
  3. CThe demat request is rejected, and the DP receives the certificates back with a rejection reason to return to the clientCorrect
  4. DThe issuer must register the shares in the depository's name

Explanation

When the RTA or issuer rejects a request, it is rejected through the depository system, and the certificates are returned to the DP with reasons, which the DP hands back to the client. No credit is made since shares were never dematerialised, so there is nothing to debit.

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