DRF full form is dematerialisation request form. If an investor has physical share certificates, they must be dematerialized before they can be sold, according to SEBI regulations. Since over 99 percent of shareholdings are demat, it's a good idea to convert any physical certificates you may have into electronic credits in your demat account.
This necessitates a minor procedure. You must submit the demat request form (DRF) to your depository participant, together with actual copies of your share certificates (DP). DP will review and validate that the form is complete in every way as a first level check. The DRF is only delivered to the company's registrar when it has been verified, together with the appropriate documentation for dematerialization of shares. The following are the circumstances in which your DP may reject the DRF.
- When the Demat Request Form is rejected by the DP?
Before accepting the DRF for processing, the DP usually verifies all technical concerns. Here are some examples.
1. For each certificate, you must provide a unique DRF. In such circumstances, the investor must fill out a new and distinct DRF for each share certificate.
2. If the names on the certificate and the DP account do not match, DP will deny the request. If there is a problem with your initials or name, you can provide a legal affidavit, which will be approved. However, the share certificate may have X as the first holder and Y as the second holder on rare occasions. The holdings in the DP account, on the other hand, may be in reverse order. It is simpler to register a fresh demat account in the same format as the share certificates in such circumstances.
3. If the number of shares in the certificate and the DRF do not match, or if the number of shares written in words and figures disagree, the DP will reject the DRF. In such circumstances, you must fill out a new DRF and resubmit it to the DP, correcting the error.
4. After DP verifies, it generates a demat request number (DRN). This DRN must be saved because it will be needed for future follow-ups, complaints, and so on.
- What is the reason for the registrar's rejection of the DRF, and what is the remedy?
1. A DRN will be given once the DP has confirmed the physical certificates and the DRF, and the certificates will be forwarded to the registrar with the DRF. The registrar has the authority to reject the DRF for any of the reasons listed below. Here's what you should do.
2. According to the registrar's records, the shares in the DRF may be greater than the free holding in your name. In that situation, you'll need to provide the registrar an updated DRF with the reduced number of shares.
3. The registrar may reject the share certificates you send on the grounds that they are duplicates or fakes. In such cases, the process becomes much more complicated, and the investor must contact the seller to have the issue resolved.
4. There could be a technical discrepancy between the name on the registrar's master list and the name on the DRF. This may result in rejection; in such circumstances, the explanation for the discrepancy must be explained, and a new DRF must be supplied if necessary.
Wrapping Up
The most common reason for DRF rejection is technical, and the solution is straightforward. Many of these rejections can be avoided by simply checking the appropriate boxes and performing a double check before submitting the shares for dematerialization. Visit Motilal Oswal for more information regarding DRF rejection as well as opening a free demat account now.
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