Study the following case/situation and express your opinion.
1. Mr. Z holds 100 shares of Peculiar Co. Ltd. in Physical mode and wishes to convert the same in electronic mode:
(a) Mr. Z holds a Saving Bank Account with CFDH Bank Ltd. Can he deposit his shares in this account for demat?
(b) What type of account is needed for the same?
(c) Is it the RBI which will be the custodian of shares of Mr. Z after demating?
Ans:
(a) In the above case, Mr. Z holds a Saving Bank Account. Therefore, he cannot deposit his 100 shares in saving bank account for demat.
(b) Mr. Z wishes to convert the shares into electronic mode. Thus, he needs to open Demat Account for the same.
(c) No, RBI will not be the custodian of shares of Mr. Z. It is the Depository, who will be the custodian of Mr. Z’s Shares.
2. Mr. R holds 100 shares of Peculiar Co. Ltd. in Demat mode :
a) He wants to transfer one share each to his wife, daughter and son. Can he do so ?
b) Does he need to submit DRF or DIS if he wants to transfer his shares ?
c) Can he nominate his wife in his demat account ?
Ans:
(a) Yes, Mr. R can transfer a share to his wife, daughter and son. He can do so by transferring the shares into their Demat Accounts.
(b) Yes. For transferring of shares, Mr. R needs to submit DIS (Delivery Instruction Slip), For this, the slip need to be filled and signed with the details of the security sold.
(c) Yes. Mr. R can nominate his wife in his demat account. For this, a particular procedure need to be followed.
3. Mrs. Z wishes to open a Demat account in her name :
a) Can she open the account going to Mumbai office of NSDL ?
b) Is she required to pay for opening of account and its maintenance ?
c) Does she have to send the shares to respective company for demating ?
Ans:
(a) Mrs. Z can open Demat account with Depository Participant. Thus, she cannot open the account going to Mumbai office of NSDL.
(b) Yes. For opening and maintaining of Demat Account certain amount is required to pay. Thin;, she is also required to pay for opening of account and its maintenance.
(c) No. Mrs. Z cannot send the shares to respective company. It is the Depository Participant (DP) who can send the shares on behalf of Mrs. Z to respective company for demating.
4. Mr. L wants to demat his 25 shares of Peculiar Co. Ltd. bearing certificate No. 100 and distinctive No. 76-100.
a) Which form is he required to fill as a written request to the DP ?
b) Does he have to fill instrument of transfer if he wishes to transfer the same after demat ?
c) Does he have to quote certificate no. and distinctive no. if he wishes to transfer his shares after it is in demat form ?
Ans:
(a) In the above case, Mr. L wants to demat his 25 shares. Thus, for this he is required to fill DRF – Demat Request Form for demating his shares.
(b) Yes. For transferring of shares after demat, Mr. Z needs to submit DIS (Delivery Instruction Slip). For this, the slip need to be filled and signed with the details of the security sold.
(c) No. Mr. Z does not have to quote certificate no, and distinctive no. if he wishes to transfer his shares after it is in demat form. He can transfer it without quoting any certificate and distinctive number of the share.
5. Mr. S holds 50 shares of Peculiar Co. Ltd. in demat form. The company has declared a dividend of ` 5/- per share and Bonus of 1:1 to its shareholders.
a) How will Mr. S get his dividend ?
b) Will he get Bonus share in Physical or demat ?
c) Who is entitled to dividend and Bonus : Mr. S or the depository ? (NSDL in this case)
Ans:
(a) Mr. S holds 50 shares and company has declared a dividend. So, Mr. S’s account will be directly credited with dividend amount. Thus, in this way he can get his dividend.
(b) Mr. S holds 50 shares of Peculiar Co. Ltd in demat form. So, he will get Bonus Share in his demat account. Bonus shares are the shares given to its existing equity shareholders.
(c) Mr. S holds 50 shares of Peculiar Co. Ltd and company has declared a dividend and Bonus. So, in such case, Mr. S is entitled to receive dividend and Bonus not the depository.