The Securities and Exchange Board of India (SEBI) is currently focused on eliminating stock transfer fraud. To achieve this goal, the regulator has sought to shift the focus from physical shares to the digital format. By opening a Demat account, physical shares can be converted into Demat shares. The process for opening a Demat account online is simple and straightforward. When an investor has an online account for trading purposes, the entire settlement process becomes faster and hassle-free.
To bring more transparency to the system, the regulator has set a deadline of April 1, 2019, for the transition. The regulator strongly believes that with the switch to electronic mode, the system will become more transparent, and it will be able to monitor the movements in the beneficiaries' trading.
However, if you want to open a Demat account, here is a 6-step guide to convert physical shares into Demat shares.
Step 1: Initiate the opening of a beneficiary account with a depository participant (DP)
The first and most important step for an individual is to open a Demat account with a depository participant. DP is the intermediary between the customer and the depositor. The individual has to check and confirm whether DP is registered with SEBI or not.
Step 2: Fill the application form
Once the Demat account is activated, the individual customer can submit the Dematerialization form to the bank. The customer needs to carry the physical copies of shares and submit them to DP. It is important to note 'Surrendered for Dematerialization' on each share certificate submitted for conversion to a Demat account.
Step 3: Submission of documents
Once the documents are submitted, the Registrar and Transfer (R&T) Agent comes into play. DP sends a message to the agent and he/she is entrusted with maintaining the records. Such an agent is also responsible for verifying the authenticity of the documents.
Step 4: Registration of Dematerialization
Once the records are stored with the R&T agent, the registration number for Dematerialization is generated and sent to the customer. This number is entered into the Dematerialization request form.
Step 5: Name change process
After the documents are verified and properly validated, the name DP is entered in place of the person's name. The total number of shares will be entered and registered in the membership register after Dematerialization.
Step 6: Receipt of confirmation of receipt and crediting of shares
The Register of Members issues a confirmation after the transfer is completed. The last step is the crediting of the shares to the Demat account.
In conclusion
Transparency and trust are the two factors that help an investor get the right momentum in his investment journey. The process of conversion is so simple that it can be completed within two weeks. It protects the shares from possible physical damage and ensures their safety. So if you also want to convert, now is the right time to do it!
Physical share don't worry, we helps you in open a Demat Account anywhere with minimum hassle. We help investors to convert physical shares to Demat and Dematerialized as well