As per the rule set by the Securities and Exchange Board (SEBI) on 8 June 2018, it is mandatory to dematerialize the shares you hold. This means all existing physical shares you carry need to switch into electronic format.

Let’s look at how to do so:

1. Opening the Demat Account

This is the very first step to convert physical shares into digital shares. Here is how you can open the demat account:

• Connect with the Depository Participant (DP) registered with the SEBI.
• Fill the application form and submit KYC to your DP.
• Sign the agreement along with the schedule of charges with the DP. The agreement carries all the details about the rights and responsibilities held by DP and account user.
• In case you are opening the Demat account online, you need to submit scanned copies of documents.

2. Surrendering the Physical share

Once the demat account is open, you will need to surrender the paper share to the DP along with the Dematerialisation Request Form (DRF). The DRF form contains information like the name of the stock’s company, the folio number, the certificate number, the total number of shares, the total number of certificates you’ve attached, the face value and so on. You can get this form from DP or broker. DP will verify the DRF along with original share certificate and then forward your application if all is in place.

3. Wait for the Credit of Shares to your Demat Account

After submitting the DRF and share certificates, the DP will send them to the issuer or Registrar and Transfer agent. If everything is in accordance, the issuer will enter the details in the system and forward the request to the National Securities Depository Ltd (NSDL). The depository module will then authorize the issue of credit balances in your account. Once done, you can then check if your Demat account if everything is perfect.

The entire process will take at least 2-3 weeks. Once the demat process is completed, you can quickly sell or transfer shares in the demat form within a few seconds.

4. Disposing Physical Certificate

Once the shares are converted into demat account, you no longer require to hold the paper form of dividends. Thus, you can dispose the physical certificate.

If you are looking for assistance to convert physical shares into demat, then connect with a stock broker now. Stock brokers like Kotak Securities help investors to buy and sell shares on their user-friendly platform.

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