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4 Mins 17 Mar 2023 0 COMMENT


When we need to dematerialize physical shares and convert them to electronic form, the first step is to fill up the dematerialization request form or the DRF. The demat request form has to be attached with the copies of physical certificates and submitted to the DP along with the certificates clearly being cancelled. However, we often come across demat account rejections or DRF rejections. Why does that happen?

The most common and popular reasons for the demat account rejection forms is technical in nature where some fine print issues are not taken care of. Such mistakes can be easily rectified and re-submitted. Here are general reasons for DRF rejections and what to do if the demat request form gets rejected.


DRF or the dematerialisation request form is the base document submission for converting your physical share certificates into demat holdings in electronic form. If an investor has physical share certificates, they hav to get it dematerialized before they can be sold. That is because SEBI regulations post 2019 have prohibited the dealing in physical shares totally. In the market today, nearly 99% of all shareholdings are demat and more than 99% of all clearing and settlement is also happening in demat form only. Hence it is a worthwhile idea to convert physical certificates into electronic credits in your demat account. for that, you must start filling up the DRF and submit it to your DP.

Dematerialization of shares entails a small procedure to be followed by the individual. As the first step, you need to submit the demat request form (DRF) to the depository participant where you hold your demat account. This has to be submitted along with actual copies of physical share certificates cancelled duly. The DP then reviews and validates that the form is complete in all respects, but this is only a first level check. The final check happens at the end of the registrar to whom the DP sends across the DRF with the share certificates in physical form. The registrar does the final verification before confirming to credit the demat account with equivalent number of shares.


Here are some illustrated case as to how a basic quality check at the end of the client can substantially reduce the chances of DRF rejections by the registrar.

  • The most important thing to remember is that for each and every share certificate, you need to provide a unique DRF. The investor must fill out a new and distinct DRF for each share certificate and if that is not done, it is bound to be rejected.
  • A common reason is if the names on the certificate and the names on the DP account do not match. For instance, full name versus initials can be a ground for rejection. Also, in the case of joint holdings, the order of holdings must be the same, else it would be rejected by the DP.
  • You can convert a single holding physical share into joint holding demat or vice versa. A simpler method is to first open a demat account in the same name / order as is available in the physical share certificates.
  • A common reason for DRF rejection is if the number of shares in the certificate and the number of shares mentioned in the DRF do not match. It can also be rejected if the numbers written in figures and words do not match. Here, you can just fill out a new DRF and resubmit it to the DP, having rectified the error.
  • After DP verifies the DRF, they allot a demat request number (DRN). This DRN is needed for future follow-ups, complaints and maintaining an audit trail.


Here are some common and popular remedies that can be adopted in the event of the DRF getting rejected by the DP or the registrar.

  • The registrar can reject the DRF if the number of shares in the DRF are greater than the free holding in the name of the investor. In that situation, the investor has to furnish an updated DRF to the registrar along with the reduced number of shares.
  • It is possible that the registrar may reject the share certificates on the grounds that they are duplicates or fakes. In such cases, the process becomes a lot more complicated. He has to contract the seller to have the issue resolved. The investor also has legal recourse.
  • A common reason for rejection of DRF is the technical discrepancy between the name on the registrar's master list and the name on the DRF. Quite often, the registrar will accept if the reasons for such discrepancy is explained to the satisfaction of the registrar. In such cases, a new DRF must be supplied.

The bottom line is that technical reasons are the most common ground for DRF rejection. Most rejections can be avoided by simply checking the appropriate boxes and performing a double check before submitting the DRF.

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