Sunday, October 14, 2007


  • What is a Depository ?
    A depository is like a bank which holds security of invetors in electronic form . It also provides services related to transactions in securities.

  • What do you mean by dematerialion? Dematerialization is the process of converting the physical certificates into electronic form.

  • Can a invstor have more than one account ? Yes an investor can open more than one account in the same name with the same DP and also with different DPs

  • Can I dematerialize any share certificate? You can dematerialize only those certificates that are already registered in your name and are in the list of securities admitted for dematerialization.

  • What is an ISIN (International Securities Identification Number) "ISIN" is the unique identification number given to a security of an issuer at the time of admitting such security in the depository system.

  • Who can nominate?
    Individuals, having/opening demat accounts, either, singly or jointly with one or two persons can make nomination. If the shares are held jointly, all the joint holders are required to sign the nomination form.

  • Who cannot nominate?
    Non-individuals including societies, trusts, body corporates, Kartas of Hindu Undivided Family, holders of power of attorney cannot make a nomination.

  • Can a minor be nominated?
    A minor can be nominated only if he is represented by a court appointed/natural guardian.

  • Who cannot be appointed as nominee?
    Trusts, societies, body corporates, partnership firms, Kartas of Hindu Undivided Family or power of attorney holder cannot be appointed as nominee.

  • Can an NRI be appointed as nominee?
    Both resident Indians as well as NRIs can nominate an NRI. Similarly, an NRI can nominate a resident Indian or another NRI.

  • How many nominees can be appointed?
    Irrespective of the fact whether securities are held singly or jointly, only one person can be nominated. In the event of the death of the sole BO or all the joint BOs, all rights in the securities held in the demat account will vest with the nominee.

  • Does the remat request constitute transfer and attract stamp duty?
    No. Remat does not amount to a transfer and does not attract any stamp duty.

  • Can an investor change the details of his bank account? Yes. Since in the depository system monetary benefits on the security balances are paid as per the bank account details provided by the investor at the time of account opening, the investor must ensure that any subsequent change in bank account details is informed to theDP.

  • Can addition or deletion of names of accountholders is permitted after opening the account? No. The names of the account holders of a BO account cannot be changed. If any change has to be effected by addition or deletion, a new account has to be opened in the desired holding pattern (names) and then transfer the securities to the newly opened account. The old account may be closed

  • What is transmission of demat securities?
    Transmission is the process by which securities of a deceased account holder are transferred to the account of his legal heirs / nominee. Process of transmission in case of dematerialised holdings is more convenient as the transmission formalities for all securities held in a demat account can be completed by submitting necessary documents to the DP.

  • In the event of death of the sole holder, how should the successors claim the securities lying in the demat account?
    The claimant should submit to the concerned DP an application with Transmission Request Form (TRF) along with the following supporting documents:
    a) A notarised copy of the death certificate, In case of death of the sole holder where the sole holder has appointed a nominee.
    b) In case of death of the sole holder, where the sole holder has not appointed a nominee:
    a. A notarised copy of the death certificate, and
    b. Any one of the below mentioned documents
    Succession certificate
    A certified copy of the will and the probate
    A certified copy of the Letter of Administration only if the value of the securities is more than 1 lakh.
    c) The DP, after ensuring that the application is genuine, will transfer securities to the account of the claimant.
    d) The major advantage in case of dematerialized holdings is that the transmission formalities for all securities held in a demat account can be completed just by interaction with the DP alone.

  • Does an NRI require any permission to receive bonus/rights shares? No.

  • Can NRIs purchase existing shares / debentures of Indian companies by private arrangement? Yes. Reserve Bank permits NRIs, on application in form FNC 7, to purchase shares / debentures of existing Indian companies on non-repatriation basis. An undertaking about non-repatriation is to be given in form NRU.

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