Demat Account Certificates and Processes

Learn the first step

The first and foremost thing you need to convert your physical shares to demat form is to open a recipient account with a depository participant, if you do not have any demat account. The depository participant is usually a broker or agent that interfaces with the bank. To open the beneficiary account, you need to fill up the demat account opening form properly and signing a deal with the depository participant. It is worth to mention in this context that at the time of opening up the demat account, you need to provide all the required details that include particulars of your bank account along with the name and branch of the bank, etc.

Process of transferring

Next, it comes to dematerialize the physical shares. Fill up the DRF or Dematerialization Request Form that is available along with the depository participant and submit your share certificates along with the form. In most of the cases, applicant will get the electronic request and physical shares and DRF within two weeks after verification done by the company. They only issue with the electronic request, only if the DRF and physical certificates are found in order. After the conversion is completed, your depository participant or DP will provide you periodic statements of your holdings. Apart from this, DP will also update the account of the clients on a regular basis especially after any transaction.

Get rid of the risk of having physical certificates

It is evident that dealing with physical shares is pretty risky and involves several problems that include bad delivery, delay in processing, fraud transaction and many more. By converting your physical shares to dematerialize form, you can easily avoid such complex and time consuming processes that have a great effect on your investment. Demat is nothing but destroying the old and shabby process to get switch to the latest electronic mode.

Enjoy other advantages

Even though, it is not compulsory to have shares in physical format, most of the shares of present times are traded in demat form. Moreover, some companies even do not deal with physical shares anymore. Apart from these, you will even hardly find any agents that will do the job for you. On the other hand, you can easily purchase or sale your demat share with brokers or agents. Furthermore, having physical shares can even affect your capital gains tax as you donot pay any security transaction tax with your physical shares.

Process of converting physical shares into demat

Open an account with a depository participant (DP)

Surrender physical certificates to DP

DP intimates to the depository regarding the request

DP submits the certificates to the registrar of the issuer company

Registrar confirms the dematerialisation request from depository

After dematerialising the certificates, registrar updates accounts

Depository updates its accounts and informs the DP

DP updates the demat account of the investor