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

While accepting certificates for dematerialisation, a DP must ensure that on each certificate the investor marks a specific legend before they are sent to the issuer or its registrar. What is this legend?

The certificates must be marked 'Surrendered for dematerialisation' by the DP. This prevents the physical certificates from being used for any other transaction while the request is processed by the issuer or registrar. The other wordings are not the prescribed legend in the dematerialisation procedure.

  1. ASurrendered for dematerialisationCorrect
  2. BCancelled by holder
  3. CTransferred to depository
  4. DLodged for rematerialisation

Explanation

The DP stamps or writes 'Surrendered for dematerialisation' on the certificates it receives, so they cannot be used for trading or transfer in the meantime. The other phrases are not the prescribed wording for this step.

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