If you are still holding to physical shares, it is high time you dematerialised them
If you have been new to stock market investing, the chances of having seen physical shares is extremely remote, as today you practically have little room left to own shares in physical form. However, there are still several investors who have clung on to their physical share certificates. Even for them, if they ever plan to trade their shares, they will have to get them dematerialised before they can get on to trading their investments.
From the available data, about 99 per cent of all share trade transactions take place in dematerialised mode only. Dematerialisation is holding your investments in a company in an electronic form with either of the two depositories – NSDL or CDSL. Inconvenience aside, if you were to trade your paper shares through the off-market route, you will have to pay stamp duty on the sale. By following a few simple and easy steps, you can still get your physically held shared converted to digital form by dematerialisation.
Start by opening a demat account with a depository participant (DP). The DP could be an agent or a broker who interfaces with the depository. DPs can either be banks, stock brokers, discounted brokers or online investment platforms who offer this facility for a nominal rent.
Next, you need to fill up the DRF (Demat Request Form) and submit the same along with the physical certificates that you wish to dematerialise. You would need to be KYC complaint to get further.
In the next step, the DP intimates to the depository regarding the request and submits the certificates to the registrar of the issuer company. The registrar then confirms the dematerialisation request from the DP and after dematerialising the certificates, the registrar updates your account. This follows the DP updating your demat account. By now you would have received an acknowledgement that the physical share certificated is ‘surrendered for dematerialisation’.
After this process, you will need to wait for a month at the most to get your shares reflecting in your demat account. If you have not got them and your DP is unable to help you, you can contact the grievance cell of NSDL or CDSL. There is an outside possibility that your demat request may be rejected because the certificates were fake, or there is a signature difference, or there is court case associated with your shares. Just ensure that you do change the holding of your shares from physical to demat account at the earliest so that you can have your equity holdings in the electronic format.