Dematerialization is the process of converting the securities held in physical form (certificates) to an equivalent number of securities in electronic form and crediting the same to the investor's Demat account. Dematerialized securities do not have any certificate numbers or distinctive numbers and are dealt only in quantity i.e. the securities are fungible.
Dematerialization of your holdings is not mandatory. You can hold your securities either in Demat form or in physical form. You can also keep part of your holdings (in the same scrip) in Demat form & part in physical form. (A list of selected securities announced by SEBI can be delivered only in Demat form).For the details of listed securities, please visit the website of the depositories i.e. NSDL (Do I have to keep any minimum quantity or value of shares Demat Account?) & CDSL (Do I have to keep any minimum quantity or value of shares Demat Account?).
Following are the benefits of keeping shares in the Dematerialised state:
Immediate transfer of shares.
No formal registration required.
No stamp duty applicable.
No additional holding/transaction cost to Shareholders pursuant to SEBI directions of January 28,2005.
Avoidance of loss through loss in transit, theft, mutilation, forging of share certificates.
Widely accepted for pledging against borrowings with lower interest rates.
SEBI Guidelines prescribe further issues in electronic mode only.
Facilitates the Company to determine entitlements easily and faster.
Details of investors are obtained from the Beneficiary Position (Benpos) and hence cannot be manipulated by companies while giving corporate benefits etc.
Investor may view the details of total share holding in the Demat account through EASI/EASIEST online services provided by Depositories (CDSL/NSDL)
Dematerialized shares can be rematerialized or changed into physical form whenever the shareholder so wish.
The way you have a Bank Account for safekeeping all your money/cash, the Demat Account is for the safekeeping of all your shares and other eligible securities. The securities are held in this account in the electronic form, is also called, the Dematerialized form. The Demat Account can be opened with Indiabulls Securities Limited(Depository Participant).
In order to dematerialize physical securities one has to fill in a DRF (Demat Request Form) and submit the same along with defaced physical certificates one wishes to dematerialize. Given below is the brief process for the Dematerialization of the shares
Submit the dully filled DRF along with the original certificates for dematerialization to Indiabulls Securities Limited(Separate DRF has to be filled for each ISIN Number/shares of different company).
Indiabulls Securities Limited submits the certificates to the registrar of the Issuer Company.
After dematerializing the certificates, Registrar updates accounts and informs depository(NSDL/CDSL) of the completion of dematerialization.
Depository(NSDL/CDSL) credits the Dematerialized shares in the Demat account of the investor.
In such cases you need to submit a certified true copy i.e. attested by Notary in original, or the marriage certificate along with the Demat Request Form (DRF), when you give your shares for dematerialization.
