DRN
Also written Dematerialisation Request Number
The unique number the DP system generates once a dematerialisation request is entered, used to track that request through the Issuer or R&T Agent until it is confirmed or rejected.
In plain language
Every demat request needs to be tracked. Certificates move from the investor, to the DP, to the Issuer or R&T Agent, and back. Something has to identify that one request at every step.
That something is the DRN, short for Dematerialisation Request Number. The DP system generates it on its own. This happens the moment the DP enters the request. Two officials must check the entry first, under the maker-checker rule.
The DP writes this number onto the Dematerialisation Request Form itself. Every party handling the paperwork can then quote it.
How it works
Once a Dematerialisation Request Form (DRF) and its accompanying certificates are found to be in order, the DP enters the request into the DP system, following the maker-checker concept — one official enters it, a different official verifies it. The system then generates the DRN, which the DP writes in the space provided on the DRF.
The DP forwards the DRF and certificates to the Issuer or R&T Agent within 7 days of accepting them from the client, quoting the DRN in its covering letter. If the Issuer or R&T Agent raises an objection, the DP has 15 days from the objection memo to resolve it or supply further information; if unresolved within that window, the R&T Agent may reject the request and return the DRF and certificates, again referencing the same DRN.
For government securities, the process runs in parallel but generates its own version of the number on the DRF-GS, and for mutual fund units converted from a Statement of Account, the equivalent number is called the Destatementization Request Number, generated per ISIN on the MF-DRF.
A worked example
Mr Chandra submits physical certificates for 300 shares worth Rs 1,71,000 at Rs 570 each, along with a duly completed DRF, to his DP on 3 June. The DP checks the form, enters the request into its system under the maker-checker process, and the system generates a DRN, say N2024060312345, which the DP writes onto the DRF.
The DP forwards the DRF and certificates to the company's R&T Agent by 10 June — within the 7-day window — quoting DRN N2024060312345 in its covering letter. The R&T Agent finds a signature mismatch and issues an objection memo referencing that same DRN. The DP has until 25 June, 15 days from the objection, to resolve it or the R&T Agent may reject the request outright and return the DRF along with the objection reference.
Why NISM asks about it
Chapter 7, section 7.3.2, step 6, introduces the DRN as the identifier generated once a demat request is entered under the maker-checker process, and the whole of section 7.3.3's objection-and-rejection table is organised around DPs and R&T Agents quoting the DRN back and forth to link related correspondence.
Expect a question on what triggers DRN generation (entry of the request in the DP system, after maker-checker verification) and on the deadlines that run alongside it — 7 days to forward the DRF, 15 days to resolve an objection.
Common exam traps
- The DRN is generated only after the DRF is entered in the DP system, not at the moment the client hands over the certificates — the DP first checks the form for completeness.
- A DRN must go through maker-checker — one official enters the request, a different official verifies it, before the number is finalised.
- Government securities and mutual fund units generate their own equivalent numbers — DRN under DRF-GS for G-Secs, and a Destatementization Request Number under MF-DRF for mutual fund units — rather than sharing the same equity-scrip DRN sequence.
- Do not confuse DRN with Client-ID or DP-ID — a DRN identifies a specific transaction request, not an account.
Check yourself
1.Only those securities whose ________ has been activated by the depository can be dematerialised in the depository system.
- a)WAP
- b)ISIN
- c)IIP
- d)DRN
Show the answer
Answer: (b) ISIN
A prerequisite for any demat request is that the securities to be dematerialised must be recognised by the depository as an eligible security — in other words, only those securities whose ISIN has been activated by the depository can be dematerialised.
A separate but related condition sits alongside it: the company or Issuer should have established connectivity with the depository, and only after that are its securities recognised as "available for dematerialisation".
A DRN is the request number the DP system generates once a demat request is entered — it belongs to a later step entirely, and there is no security-level activation of a DRN.
2.Within what time must a DP forward the DRF and the security certificates to the Issuer or its R&T Agent after accepting them from the client?
- a)Within 7 days of accepting them from the client
- b)Within 15 days of accepting them from the client
- c)Within 21 days of accepting them from the client
- d)Within 30 days of accepting them from the client
Show the answer
Answer: (a) Within 7 days of accepting them from the client
The forwarding letter should refer to the allotted DRN and should be sent within seven days of accepting it from the client. The DP checklist repeats it: the DRF is forwarded only after ascertaining that the number of certificates annexed tallies with the number mentioned on the DRF, within 7 days of its receipt.
The same 7 days governs the DP's other despatch duties: forwarding the RRF to the Issuer/RTA within seven days of accepting it, and despatching destat documents to the AMC/RTA within 7 days from the date of receiving them from the BO.
The 15-day figures belong to different actors — the DP removing objections within 15 days of the objection memo, and the R&T Agent confirming or rejecting a demat request within 15 days from the date of receipt of physical shares.
3.Certificates sent by a DP never reach the R&T Agent, were not returned undelivered, and are not traceable at the RTA's office. What must the DP do?
- a)Ask the client to apply to the company for duplicate certificates
- b)Provide proof of dispatch and, on the assumption of loss in transit, execute an Indemnity Bond in favour of the Issuer/RTA
- c)Report the loss to SEBI and await directions
- d)Cancel the DRN and refund the client's demat charges
Show the answer
Answer: (b) Provide proof of dispatch and, on the assumption of loss in transit, execute an Indemnity Bond in favour of the Issuer/RTA
The prescribed sequence is: the DP shall provide the Issuer/RT Agent proof of dispatch and also confirm that the certificates are not returned undelivered at their end. If the certificates have not been returned undelivered and are not traceable at the Issuer/RT Agent's office, then it will be assumed that the certificates have been lost in transit. In such a case, the DP shall execute an Indemnity Bond in favour of the Issuer/RT Agent.
Where the original request had already been rejected, a fresh demat request is set up by the DP and the Indemnity Bond duly executed is submitted along with a new DRN, and the Issuer/RT Agent shall accept the demat request and carry out dematerialisation on the basis of the Indemnity Bond given by the DP. So the client gets his credit — the DP carries the risk of its own courier.
The limit of the remedy matters: where the rejection was for a reason that cannot be rectified — fake, forged, duplicates already issued, court injunctions — the Issuer/RTA retains the documents, and the DP must obtain rejection letters and hand them to the BO.
Where this is taught
Free preparation for NISM Series VIRelated terms
- DematerialisationConverting securities held as physical certificates into book-entry holdings: the certificates are defaced, mutilated and surrendered to the issuer, and an equivalent quantity is credited to the holder's demat account.
- Depository participantThe SEBI-registered agent through whom an investor reaches a depository — NSDL and CDSL cannot open investor accounts themselves, so every demat account is opened and operated through a DP.
- DefacingMarking a physical certificate "Surrendered for Dematerialisation" with the DP name, DP-ID and Client-ID, and punching two holes at the top, before it is sent to the Issuer or R&T Agent — a safeguard against misuse.
- DRF-GSThe demat request form for government securities, submitted with the physical G-Sec certificates and an RBI Form of Transfer, or with an SGL credit advice to move SGL holdings into the depository.
- Indemnity BondThe bond a DP executes in favour of the Issuer or R&T Agent when physical certificates confirmed as electronically dematerialised are lost in transit before reaching the Issuer/R&T Agent.
- Objection memoThe document by which an Issuer or R&T Agent flags a defect in a dematerialisation request, giving the DP 15 days to resolve the objection or supply further information before the request can be rejected.
- RRNThe reference number generated when a Rematerialisation Request Form is accepted — an abbreviation the workbook reuses, confusingly, for a second, different number in mutual fund restatementization.