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

Ms. Rao's DP receives a demat request with physical certificates. Before sending the request to the depository, what must the DP do with the certificates to prevent their re-use?

The DP must mark the certificates as 'Surrendered for Dematerialisation' and deface them before forwarding them to the issuer's RTA. This prevents the physical certificates from being used again for transfer or sale while the electronic credit is being processed.

  1. AStamp or mark them 'Surrendered for Dematerialisation' and cut or deface themCorrect
  2. BReturn them to the investor after photocopying
  3. CSend them directly to the stock exchange
  4. DRetain them unmarked until the RTA replies

Explanation

The DP must verify the Demat Request Form and certificates, and mark each certificate 'Surrendered for Dematerialisation' so they cannot be used again. Returning or leaving them unmarked risks misuse. The certificates are then sent to the RTA, not the exchange.

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