How to Convert Physical Shares to Demat - 6 Steps Guide

At present, the Securities and Exchange Board of India (SEBI) is focused on eliminating frauds in share transfer. To accomplish that objective, the regulatory body has tried to shift the focus from physical shares to the digital format. One can convert physical shares to Demat with the help of opening Demat account. The process to open a Demat account online is simple and easy. If an investor has an online account for trading purposes, then the entire process of settlement becomes faster and hassle-free.

To bring in more transparency into the system, the regulator issued a deadline of 1st April 2019 for the conversion. The regulator is of the strong opinion that with the shift toward the electronic mode, the system will be more transparent and they can monitor the movements in trade made by beneficiaries.

However, if you are someone who is looking to open a Demat account then, here is the 6 step guide to convert physical shares into Demat.

Step 1: Initiate the opening of a beneficiary account with a depository participant (DP)

The first and foremost step for an individual is to initiate the Demat account opening with a depository participant. DP is the intermediary between the client and the depositor. The individual needs to check and confirm whether DP is registered with SEBI or not.

Step 2: Fill in the request form

Once the Demat account has been activated, an individual client can submit the dematerialization form with the bank. The client is supposed to carry the physical share copies and surrender it with DP. It is crucial to mark ‘Surrendered for dematerialisation’ on every share certificate, which is submitted for conversion into Demat.

Step 3: Submission of the documents

After the submission of the documents, the Registrar and Transfer (R&T) agent comes into the picture. DP will send a message to the agent and he/she is entrusted with the responsibility of maintaining records. Such an agent is also responsible for validating the authenticity of the documents.

Step 4: Dematerialization registration

Once the records are saved with the R&T agent, the dematerialization registration number will get generated and sent to the client. The number will be filled into the dematerialization request form.

Step 5: Name change process

After the documents are verified and proper validation is completed, DP’s name will be replacing the name of the individual. The total number of shares, after being dematerialized, will be entered and recorded in the Register of Members’ account.

Step 6: Receipt of acknowledgement and credit of shares

The Register of Members generates the acknowledgement after the finalization. The last step is the credit of shares to the Demat account.

To Conclude

Transparency and confidence are the two factors that help an investor gain due momentum in his or her investment journey. The process of conversion is so simple that it can be completed within two weeks. It protects the shares from potential physical damage and ensures their security. Hence, if you are looking to convert the same, then the time is now!

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Happy Investing 😇

Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing.