Dematerialization, which is the conversion of physical share certificates into electronic form for storage in a Demat account is an initiative, mandated by the Securities and Exchange Board of India (SEBI), aimed at streamlining the settlement process, enhance transparency in capital markets, and facilitate tracking of shareholders by tax authorities.
What are the steps involved in converting physical shares to demat form
Opening a Demat Account: Begin by opening a demat account with a Depository Participant (DP), who acts as an intermediary between you and the depository. Ensure that the names in the demat account and physical share certificates match.
Filling Out Request Forms: Fill out the Dematerialization Request Form (DRF) provided by the DP, providing details such as the number of shares, certificates, ISIN, face value, and type of security.
Submitting Documents: Submit the physical share certificates and the DRF to the DP for verification and processing. The DP will then send the request to the appointed registrar for approval.
Verification and Approval: The DP will verify your request, and upon approval from the registrar, the units of shares will be transferred to your demat account.
The process typically takes around 2-3 weeks to complete, and it is essential to ensure that the physical shares are in order and not in dispute before initiating the dematerialization process. Converting physical shares into demat form offers various advantages, including enhanced security, easy accessibility, credit facilities, international trading opportunities, and nominations for beneficiaries in case of the investor’s demise.
To convert physical shares into demat form in India, the following documents are typically required.
- Passport-size photographs
- Proof of identity: PAN card, Aadhaar card, passport, voter ID card, or driving license
- Proof of address: Ration card, passport, voter ID card, driving license, bank passbook, or electricity bill
- Proof of bank account: Name of the bank, account number, or a canceled cheque.
These documents are essential for the dematerialization process, ensuring the verification of the investor’s identity, address, and financial details before converting physical shares into electronic form stored in a Demat account.
