Register of Destroyed Certificates
Also written Destroyed certificates register
The RTA's record of every physical share certificate it has shredded after dematerialisation — the workbook requires the entry but does not state how long the certificates must be kept before destruction.
In plain language
When an investor dematerialises physical shares, the paper certificate does not go on serving any purpose once the demat credit is done. Eventually the RTA shreds it.
But shredding is not the end of the paper trail — it is the start of a new one. Every certificate destroyed this way is logged in the Register of Destroyed Certificates.
How it works
The RTA shreds the certificates once the dematerialisation process is complete, after the specific retention period. The workbook does not state how long that retention period actually is — only that a retention period exists before shredding happens. The details of each certificate destroyed are then entered into the Register of Destroyed Certificates.
Separately, the workbook does give a number for a related document: the Dematerialisation Request Form itself must be stored for at least 8 years. The two retention rules are not the same thing — one is for the DRF paperwork, the other is the undefined period before the underlying certificate is shredded.
A worked example
Mr. Subramanian dematerialises 600 shares of Coromandel Textiles Ltd, certificate number CT-04521, on 3 June. The RTA verifies the request, credits his demat account, and mutilates the physical certificate as required.
Some time later — the workbook does not say exactly when — the RTA shreds certificate CT-04521 and makes an entry in its Register of Destroyed Certificates: certificate number, folio, distinctive number range and the date of destruction. The Dematerialisation Request Form for this transaction, however, is kept on file for at least 8 years from the date of the request, regardless of when the certificate itself was shredded.
Why NISM asks about it
Chapter 12, section 12.1 (Dematerialisation of Securities). Expect a question on what gets logged where — the Register of Destroyed Certificates for the shredded paper, versus the separate 8-year retention rule for the DRF — and that the workbook leaves the certificate-retention period unspecified.
Common exam traps
- The workbook gives no number for how long a certificate is kept before shredding — do not answer with a guessed figure.
- 8 years is the DRF's own retention period, not the certificate's pre-shredding retention period — the two are easy to conflate because both concern paperwork from the same transaction.
- The register records certificates already destroyed — it is a historical log, not a pending-destruction queue.
Check yourself
1.What happens to the physical certificates after dematerialisation is complete?
- a)They are returned to the investor, stamped as cancelled
- b)They are sent to the depository for safe custody
- c)The R&T Agent shreds them after the specific retention period and enters their details in the Register of Destroyed Certificates
- d)They are kept by the DP for 8 years and then destroyed
Show the answer
Answer: (c) The R&T Agent shreds them after the specific retention period and enters their details in the Register of Destroyed Certificates
"The R&T Agent shreds the certificates once the process of dematerialisation is complete, after the specific retention period. The details of the certificate destroyed are entered into the Register of Destroyed Certificates."
Before that, "upon completion of demat process the certificates will be mutilated by the R&T Agent", and the R&T Agent enters "the account number of the beneficial owner... into the holding master" for future reference.
Option A is wrong — the investor has surrendered them; they come to the R&T Agent marked 'Surrendered for Dematerialisation'.
Option B is wrong — the depository keeps electronic records, not the paper.
Option D is wrong — the DP does not keep the certificates, which go to the R&T Agent. The 8-year figure belongs to the forms: "The DRFs are required to be stored for atleast a period of 8 years."
2.When a certificate split or consolidation request is processed, what happens to the certificate number and the distinctive numbers?
- a)Both are reassigned from the company's running series
- b)The certificate number stays the same; the distinctive numbers are renumbered
- c)Only the certificate number changes; on a split the DNs are divided according to the number of shares split, and on a consolidation they are brought together under one certificate number
- d)The folio number changes, and the old certificate numbers are entered in the Register of Destroyed Certificates
Show the answer
Answer: (c) Only the certificate number changes; on a split the DNs are divided according to the number of shares split, and on a consolidation they are brought together under one certificate number
"When Certificate split or consolidation requests are processed, only the certificate number changes and the distinctive number for the shares remains the same. In respect of split, the distinctive numbers will be split as to the number of shares split is requested for. In respect of consolidation, the distinctive numbers will be consolidated and reflect under same certificate number."
Options A and B are wrong — distinctive numbers never change. They identify the shares themselves.
Option D is wrong — the holder is the same, so the folio stays. The Register of Destroyed Certificates is used for certificates shredded after dematerialisation.
3.Within what periods must dematerialisation and rematerialisation be completed, and how long must the forms be stored?
- a)30 days and 15 days respectively; forms stored for 5 years
- b)15 days for demat and 30 days for remat, both forms stored for at least 8 years
- c)21 days for both; forms stored for 8 years
- d)15 days for both; forms stored for 3 years
Show the answer
Answer: (b) 15 days for demat and 30 days for remat, both forms stored for at least 8 years
The process of dematerialisation has to be completed within a period of 15 days from receiving the physical request.
Rematerialisation of securities will have to be completed within a period of 30 days from the receipt of physical RRFs.
Both forms are kept the same length of time: the DRFs are required to be stored for atleast a period of 8 years, and the RRF should be stored for atleast a period of 8 years.
Note "atleast" — eight years is the floor.
Chapter 11 gives the same limits from the tripartite agreement side: the issuer/R&T agent will abide with the 15 days and 30 days limit for processing requests for dematerialisation and rematerialisation of securities respectively.
Option A reverses them — the standard trap.
Why remat takes twice as long. Certificates must be created, not destroyed: the agent must create a new folio or add to an existing folio, assign a new certificate number and distinctive numbers from the set of shares already dematerialised, ensure the applicable revenue stamps are affixed, and print certificates in the name of the investor along with the lock-in period indicator, if any, and dispatch them directly to the shareholder after affixing common seal on the face of the certificate.
Demat, by contrast, ends in destruction — certificates mutilated by the R&T Agent and later shredded, with details entered in the Register of Destroyed Certificates.
A third figure completes the set — a demat request may be rejected for delay of more than 30 days in the receipt of physical securities from the day of electronic request.
And Chapter 6 sets the general record-keeping rule — RTAs maintain proper books of accounts and records for a minimum period of 8 years.
Where this is taught
Free preparation for NISM Series II-ARelated terms
- Beneficial Owner Master RegisterThe RTA's own database of every beneficial owner's holding details, built from the depository's downloads and refreshed for every corporate action — distinct from the beneficial owner it records.
- Distinctive Number databaseThe depositories' central record, under SEBI's June 2015 circular, of the distinctive numbers of listed companies' equity shares — physical and demat — to reconcile issued, listed and demat capital.
- Letter of ConfirmationThe letter an RTA issues instead of a physical certificate after processing a duplicate, transmission, split or similar request — valid for 120 days, within which the holder must demat the shares through a DP.
- Maker and checkerThe internal control an RTA follows so that no single employee both processes and approves a document — one person (the maker) enters a request, and a second (the checker) verifies it before it takes effect.