In 1996, online demat account was introduced in India. Previously, most trading was done on paper. Investors purchased shares and kept them in physical form. There were many issues, such as damage or loss to the certificate or discrepancies in signatures or names, and other paper-work issues. These issues were eliminated by the introduction of demat accounts. Many investors still have their equity in physical form. Investors who bought shares in the predemat account era may not have dematerialized their shares or are not actively participating in stock markets. If investors wish to sell their stock , they will need to first convert their stocks into demat (or dematerialized) form. You will need to submit a Demat Request Form (or DRF) to your depository participant. Sometimes, however, a Demat Request form may be rejected. Learn more about what to do in such cases.
When a security holder wishes to make their holdings dematerialized, they will need to fill out a demat request form (or DRF). You will need to dematerialize if you want to sell equity. After you have completed the DRF, It must be submitted to your DP along with the physical certificates of ownership after you have completed the DRF. After verifying all your details, the DP forwards the Demat request form to the company or its Registrar and Transfer agent (R&T). The company's Registrar or Transfer agent is an individual appointed to track all shareowners and transfer shareholdings. The R&T agent for the issuer company will verify the Demat Request form and forward it on to the relevant depository CDSL, or NSDL. It is important to remember that the DRF is reviewed at two levels in the entire chain. The first is by the DP, and the second is by the Registrar. It is possible that your DRF will be rejected at one of these levels. We will now examine the reasons behind rejection at each level as well as what you can do to remedy them.
Your DP's first verification level is the DP. The following reasons may cause it to reject your DEMAT REQUEST FORM
You will need to fill in a new certificate for each physical certificate that you have and create a Demat Request Form Number. If your DP rejects the form, you can fill out a new form for each one.
Your holding certificate name must match your demat account at the DP. There are two options in this situation. Either you can submit a legal statement to correct the name issues or you can open a new demat account matching the name on the holding certificate.
Your Demat Request Form must contain the exact same number of shares as your holding certificate. If there is a mismatch, your form will be rejected by the DP. You can rectify the situation by filling out the Demat Request form again with correct information.
After your DP has verified the form, it will issue a demat request number (or DRN) to you. This DRN will be required for any further communication and should be kept safe.
DRF will send the form to the Registrar or Transfer agent of the stock company whose stock you own after our DP has verified . These are the most common reasons why a registrar might reject your application:
Your DRF will likely be rejected if the number of shares listed in the Demat Request Form exceeds the number in the registrar’s records. In this case, you will need to complete the DRF again and submit it to the registrar.
This is a problem that physical certificates are susceptible to manipulation or forging.You will need contact the seller to resolve the authenticity of shares If the registrar rejects the form due to duplicate or fake shares
This is another problem that physical certificates often face. If the signature on your Dematerialization Request Form is not identical to the records of the registrar, it's likely that your DRF will be rejected. Signatures can change for many reasons. Most common is age-related. It is not uncommon for signatures to change as people age. If you are concerned about a significant difference in signatures, you can have your signature verified in the presence a magistrate. Then send it to the registrar to authenticate the Demat Request Form.
(ISIN) An International Securities Identification Number is a 12-digit code that uniquely identifies each security. Companies may issue multiple ISINs to different types of stock, such as partially-paid shares or fully-paid shares. It is not uncommon for stock owners to fill out the Demat Request Form with the incorrect ISIN. Simply fill out the form with the correct ISIN if this happens.
Sometimes, a stop order can be issued by SEBI to prevent a company from selling its stock. If this happens, the company's shares can't be sold until these issues are resolved.
Selling shares of physical shares requires that your shares are dematerialized. It is easy to complete a Demat Request form and submit it to your DP. After verification, it will be submitted to the issuer. Most common problems that occur in this process are errors made while filling out the form, signature mismatches, and name/signature mismatch. After these issues have been resolved, you can submit the form again.