Question

Arrange the following in the correct order of the working of the Demat System.
(A) An account opening form and documentation (PAN card details, photograph, power of attorney) may be completed.
(B) If shares are applied in a public offer, simple details of DP and demat account are to be given and the shares on allotment would automatically be credited to the demat account.
(C) The physical certificate is to be given to the DP along with a dematerialization request form.
(D) A Depository Participant (DP), either a bank, broker, or financial services company, may be identified.
Choose the correct answer from the options given below:

• A. (A), (B), (C), (D)
• B. (D), (C), (A), (B)
• C. (B), (A), (D), (C)
• D. (D), (A), (C), (B)

Hint:

Demat Workflow:
1. Select DP $\rightarrow$ 2. Open Account with PAN/KYC $\rightarrow$ 3. Submit DRF for existing shares $\rightarrow$ 4. Receive direct credits for new share allotments.

Answer 1

The Correct Option is D

Concept:
Dematerialisation (Demat) is the process of converting physical paper share certificates into electronic balances held through a Depository Participant (DP).
Operating a Demat account follows a defined procedural sequence established by SEBI.

Step 1: Identifying the Procedural Steps:
1. Identification of DP (D): An investor must first select and contact an authorized Depository Participant (a bank, broker, or financial services entity) who acts as the intermediary to the depository.
2. Account Opening (A): The investor completes the registration form and submits required KYC documents, including PAN card details, address proof, photograph, and power of attorney.
3. Dematerialisation of Physical Shares (C): To convert paper shares into digital format, physical certificates are handed over to the DP along with a Dematerialisation Request Form (DRF).
4. Public Offers and Credits (B): For new public issues, the investor provides their DP-ID and Demat Account number so that allotted shares are automatically credited to their account.

Step 2: Determining the Correct Sequence:
The chronological operational flow is:
Identify DP (D) $\rightarrow$ Complete Account Form (A) $\rightarrow$ Submit Physical Certificates (C) $\rightarrow$ Future Public Offer Credits (B).
This establishes the sequence: (D), (A), (C), (B).

Step 3: Verification of Options:
Matching this order with the options confirms that option (D) is the correct choice.

Step 4: Final Answer:
Therefore, the correct choice is (D).