How You can Convert Your Physical Paper Shares Into Demat Account Online And Why Is It Important to Do?
An Indian citizen can no longer deal in physical share certificates, according to the union government’s regulations. The physical share certificates must be converted into a Dematerialized (Demat) or electronic version by the investor. That was previously announced by the Securities and Exchange Board of India (SEBI).
This will make the process of buying, selling, and transferring a company’s shares easier for investors. The steps for converting physical shares into a Demat account are listed.
You must first convert your paper shares into a dematerialized form before trading them. The process to convert physical shares of a company into electronic format is known as dematerialisation. The shares are dematerialized and transferred to a new demat account. Keep in mind, however, that you can only convert shares of a company that is currently operational and trading on the exchange.
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Why Demat Account is important nowadays?
Demat accounts are becoming popular due of their convenience and security. It is impossible to fabricate or fake dematerialized shares, hence the Demat account is safer. Then you can request that the physical share certificate be converted to a dematerialized format.
You can verify all of your status and positions online with e-certificates, and it’s a transparent way for the government to track all of the shares that an investor has purchased.
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Steps for Converting Physical Shares into a Demat Account are given below.
Step 1: To convert physical shares to Demat form, the first step is to open a Demat account. (You can learn how to open a Demat account here.)
Step 2: The investor must request a Dematerialization Request Form from the depository participant (DP) (DRF).
Step 3: The investor must next accurately fill out the DRF with the essential information and sign it.
Step 4: Fill out the DRF and send it to the DP together with the physical share certificates.
Step 5: The investor must write ‘Surrendered for Dematerialization’ on the actual share certificates when sending the DRF.
Step 6: The DP will begin processing the request only when the investor has delivered the physical share certificates for dematerialization.
Step 7: Your DP will then send the request to the company’s designated Registrar and Share Transfer Agent (RTA).
Step 8: Following that, the request for dematerialization will be authorised, and the physical share certificates will be destroyed. In addition, an actual number of shares will be credited to the investor’s Demat account.
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Your physical shares will be destroyed after the request is authorised following verification, and you will receive dematerialized shares in your demat account.
Congratulations, Now you can sell or transfer your demat account shares and realise their value.