- July 10, 2019
- Posted by: Umesh Paliwal
- Category: Mutual Funds
Physical to Demat Conversion
Why there is so much fuss?
According to the new rules of SEBI, no physical shares can be traded after 01. 04.2019, but this does not mean that those who have not yet been able to dematerialize the shares will not be able to change. The rule says that if you want to sell shares then you have to convert it to demat first.
Why SEBI is doing this?
SEBI has found that in the last several years, there is no proper account maintenance in physical shares by companies and there are high chances of fraud happening. Many times investors are not able to get dividend as the company does not have proper bank accounts and then after 7 years, the unclaimed dividend goes in IEPF( A body set up by Govt.) which again has a very cumbersome process to get dividend money back.
In today’s digital world, where everything is going online, it is very important to have demat account. This gives investors a lot of benefits. Investors can sell and buy shares in one click at home. The investor can invest in equity and bond with the help of his demat account. Another advantage is the proper record of all shares can be possible at one place.
But it is very surprising that there are about ~4-6 crore demat accounts in India which is nothing in front of the population of 130 crore. It tells us that the scope in this field is very big and India is an underpenetrated country in terms of equity participation.
Who maintain shares in Demat form?
Two depository companies manage our demat shares in India. One is CDSL and the other is NSDL. All brokers in India are registered with either or both of them. The Brokers only gives you a platform to buy and sell shares. The CDSL or NSDL then keep those shares in there depository.
Process of Convert Physical to Demat ?
Open a demat Account in the name of a person who is holding shares in physical form. We at Investorzone help clients open one. For opening a Demat Account please click below.
Once you are ready with Demat Account, you need to download a DRF Form and fill it. The copy of the DRF form can be downloaded from the below link:
CDSL DRF Form> https://d2un9pqbzgw43g.cloudfront.net/main/Ann-11.4-Dematerialisation-request-form-1.doc
NSDL DRF Form> https://nsdl.co.in/downloadables/annex-d.pdf
In case if you face any issue in filling the form you may contact Mr. Dinesh Gupta, 08010009625.
The two copies of duly filled DRF form along with Physical shares certificate will then require to be sent to your broker. Usually it takes 25-30 days for conversion, if all information is filled correctly.
That is It. Welcome to the world of Demat !!