How to convert physical shares to Demat?

The Indian stock market has developed to provide modern investors with improved facilities and a more user-friendly trading environment. The Securities and Exchange Board of India (SEBI) has been adamant that all physical shares should be digitized and stored in an electronic format for a long time. A circular published in April 2019 by the organization that regulates the market, known as SEBI, stated that a request for the transfer of shares would not be processed unless the shares were in dematerialized form. There are only a couple of situations where this request won't adhere to the transmission of shares and the transposition of securities.

What is the definition of a Demat Account?

Investing was transformed into a digital process when Demat accounts were first launched in India in 1996 by the Securities and Exchange Board of India (SEBI). These accounts were responsible for the country's economic transformation. A depository participant's (Demat) performance was one of the most crucial innovations made by SEBI. The term "Demat" relates to the dematerialization of shares, converting physically held securities into an electronic representation. Therefore, a trader can use a Demat account to save, transfer, and transact securities without the hassles of dealing with physical securities by using the three actions mentioned above. As a direct consequence of this, trading has evolved into a far more secure, speedier, and effective process for the execution of trades and the storage of assets.

Detailed instructions on changing physical shares into a Demat form are provided here

• The first thing you need to do is register for a Demat account with a designated participant. You can even open a Demat account with your bank, which can also serve as a depository participant (DP). Ensure that the names on the actual share certificates and the characters in the Demat account are the same.
• Once you have opened your Demat account, you must fill out a dematerialization request form. Bring the physical shares you own with you and hand them over to your depository participant as you fill out the form. On each share certificate, you should write "Surrendered for dematerialization."
• The Registrar and Transfer (R&T) agent will get an electronic notification from your Designated Person (DP). Your records are currently being managed by the R&T agents who have been given this responsibility.
• The process of dematerialization will result in the generation of a registration number. This information will be entered into your dematerialization request form, and the state and your original share certificates will be delivered to the T&R agency.
• The T&R agent will investigate to validate the legitimacy of the documents that you have provided. The Register of Members is the database that maintains all of the information regarding the company's shareholders.
• Once this process is finished, an acknowledgment is issued from the Register of Members. The number will be sent to your designated contact.

Your Demat account will be credited with the value of your dematerialization of shares.

The Last Word

Although the process of dematerialization of shares might seem to take a long time, it takes very little input from the user. It is anticipated that converting physical share certificates into Demat format will take approximately two to three weeks to complete. Once the funds have been added to your Demat account, you can sell or transfer your shares whenever it is most convenient for you.