Can one pledge dematerialised securities?

Yes. In fact, pledging dematerialised securities is easier and more advantageous as compared to pledging physical securities.

What should one do to pledge electronic securities?

The procedure to pledge electronic securities is as follows:

How can one close the pledge after repayment of loan?

After one has repaid the loan, one can request for a closure of pledge by instructing the DP in a prescribed format. The pledgee on receiving the repayment will instruct his DP accordingly for the closure of the pledge.

Can one change the securities offered in a pledge?

Yes, if the pledgee [lender] agrees, one may change the securities offered in a pledge.

Who would receive the corporate benefits on the pledged securities?

The securities pledged are only blocked in the account of pledgor in favour of the pledgee. The pledgor would continue to receive all the corporate benefits.

Who can nominate?

Nomination can be made only by individuals holding beneficiary accounts either singly or jointly. Non-individuals including society, trust, body corporate, karta of Hindu Undivided Family, holder of power of attorney cannot nominate.

Who can be a nominee?

Only an individual can be a nominee. A nominee shall not be a society, trust, body corporate, partnership firm, karta of Hindu Undivided Family or a power of attorney holder.

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 documents to the DP, whereas in case of physical securities the legal heirs/nominee/surviving joint holder has to independently correspond with each company in which securities are held.

In the event of death of the sole holder, how the successors should claim the securities lying in the demat account?

The claimant should submit to the concerned DP an application Transmission Request Form (TRF) along with the following supporting documents.

In case of death of sole holder where the sole holder has appointed a nominee, the Notarised copy of the death certificate.

Any one of the below mentioned documents - succession certificate, copy of probated will and letter of administration.

The DP, after ensuring that the application is genuine, will transfer securities to the account of the claimant.

The major advantage in case of dematerialised holdings is that the transmission formalities for all securities held with a DP can be completed by interaction with the DP alone, unlike in the case of physical share certificates, where the claimant will have to interact with each issuing company or its Registrar separately.

Can electronic holdings be converted back into physical certificates?

Yes. The process is called rematerialisation. If one wishes to get back his securities in the physical form one has to fill in the RRF (Remat Request Form) and request his DP for rematerialisation of the balances in his securities account. The process of rematerialisation is outlined below:

Source: www.sebi.gov.in

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