How to transfer or convert your Physical Shares into Demat Format ?
Securities and Exchange Board of India (SEBI) already published a notification that there is a restriction on transfer of Physical Shares (Materialized Format)
after December 5, 2018 (Extended – Before April 1, 2019). In view of the Investor Protection, one cannot transfer of his physical shares after this December 5.
SEBI always keen to watch the market whether any unusual transactions are going on behalf of the Investor awareness and Protection. So, any investor holding their shares in a physical format is a difficulty one after the mentioned date. Better to serve and do the part (Converting) earlier is a good choice for the investors, but for the traders it’s not an issue due to their trade setup.
Nowadays, Trade Terminal of the Stock brokers were also enhanced with the technology so that clients or the investors of the broker can ease to transact in the market. After this notification of Physical shares to Demat format, it helps the existing investors of Physical shares to made their changes easily like Contact Details and Bank Account number.
There is not a hard thing to deal the physical shares in to a De-materialized format. It’s very easy and handy nowadays, thanks for the Tech-world.
How to transfer or convert your Physical Shares into a De-materialized (DEMAT) format ?
- The word, ‘DEPOSITORY‘ is a kind of organization which holds the securities (Shares, Mutual Funds, Bonds, Small Savings Schemes,Commodities, Derivatives, Deposits,etc) with it in De-materialized form. The Intermediaries perform their actions in variety of securities at Depository on behalf of their customers or clients. These Intermediaries are called as Depositories Participants (DP).
- There are two depositories in India are, NSDL (National Securities Depository Limited) and CDSL (Central Depository Service Limited). Every DP should be registered under this Depository before it commences it’s Market trade or transaction. DP are just your Stock Brokers.
- For converting your physical shares into De-materialized format, you need to be open a Demat (De-materialized) Account with your DP. (or any DP, if you are opening a new). On behalf of the Demat account opening, you have to be fufill the KYC details.
- After opening a Demat account, you have to submit the DRF (De-materialization Request Form) to your DP. This process will take nearly 15-20 days to complete the conversion of shares into Demat.
- On completion of the DRF process, the ROC (Registrar of Companies) will update this details on its accounts books. The client or investor can also get the status of the position. After that, he or she can trade in the market and the shares now held through Electronic form (De-materialized). Now, you can view the statements of your transactions made in the market through Email or Trade Terminal Application.
So, don’t forget to convert your shares into Demat format before December 5,2018 as SEBI notified earlier.
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