Legal Advice

Transmission of securities in DEMAT account: from the deceased’s account holder to his legal heir

Question: My sister is the legal heir of her husband's demat account. Her husband died on 12-02-2021. His father is the nominee of his DEMAT account. My sister wants transmission of securities, bonds, shares in the demat account to the legal heir after the death of the account holder (husband). Since my sister is the sole legal heir of the deceased account holder but her father in law is claiming his ownership on the securities kept in DEMAT account. How can my sister get the share of the Demat Account of her husband or encash the securities where the nominee is her father in law? Please advise.


Dematerialized Account (DEMAT) stores financial securities such as shares, bonds, debentures, mutual funds etc in electronic form. There are three parties in the DEMAT account. The investor (account holder), a depository (NSDL, CDSL) and depository participant (Bank). Securities stored in a DEMAT account are assets. Depository participant (DP) transfers securities in the DEMAT account to the legal heir. DP acts as an intermediary between the investor and the depository.

Nominee is not owner of the securities held in DEMAT account of deceased account holder. He acts as a trustee or caretaker of the account. Only the legal heir of the deceased account holder is entitled to accept securities, bonds, shares etc stored in the DEMAT account. He is a trustee of that account and should transfer the assets to your sister. He cannot claim ownership on the assets held in demat account. 

When a nominee is nominated in a DEMAT account the procedure for transmission of securities is very simple. The nominee is the legal person to communicate with DP towards transmission of securities.

Your sister should open a DEMAT account in her name. Thereafter, her father in law should submit a transmission request form (TRF) to the DP for transmitting the securities in that DEMAT account. He should annex a succession certificate and these documents along with the TRF.

  • Duly notarized or certified death certificate
  • His identity proof
  • Indemnity form on rupees hundred stamp paper
  • Account details of his new DEMAT account
  • Account closing form 

Succession certificate is mandatory because it proves who is the legal heir of deceased account holder. The DP will transfer the securities from the deceased’s account to the account of his legal heir. Since, the nominee is ready for such a transfer then the DP will transfer the securities within seven days. 

When nominee is claiming ownership on the demat account

In this condition, your sister should file a declaratory suit. Make her father in law and DP as a defendant in that suit. She should claim for declaration of her right on the securities held in her husband’s demat account. Since, she is the sole legal heir so the court will declare her right in the demat account. Thereafter, the DP will transfer the securities in her demat account.

Shivendra Pratap Singh


High Court Lucknow