Gone are the days when most share transaction works were done through physical share certificates. With the advancement in digital technology, today’s share management has become easier than before. The reason why a lot of investors are showing interest in the share investment business is the ease with which it can be carried out at the initial stage. Physical share certificates are vulnerable to being lost or damaged, and renewing them is not a smart option when you can simply dematerialize them. Hence, if you need physical shares to Demat services, this is the right blog you will need to read.
Why Converting Physical Shares Into Demat is Important
Physical shares are not as secure as digital ones. These don’t have sufficient security, hence a lot of duplication and fraud cases happen due to forgery. The paperwork associated with it is tedious. From selling, transferring, to sharing bonuses and benefits is extensive. The market moves rapidly today, hence it is not feasible to keep up with the rapidly changing stock market norms. The handling fees and stamp duty fees are additional burdens incurred by the beneficiary.
Besides the inconvenience and complex management, it is also mandatory as per the Securities and Exchange Board of India (SEBI) guidelines. They aim to streamline the stock exchange process and bring more transparency through this guideline. NSDL and CSDL are the depositaries that hold the electronic shares and securities to safeguard them.
Process of Conversion
The process of dematerializing physical shares involves a set of prescribed guidelines by SEBI. In this procedure, the stockholder will need the help of physical shares to Demat services. Here’s why:
- The first step is to hire a Depository Participant (DP), who acts as an agent between the investor and the depository.
- With the help of the DP, you have to open a Demat account.
- Obtain a Dematerialization Request Form (DRF) and fill it with accurate information.
- The DP will make sure the right documents are attached to the form and submit it to the depository (NSDL or CSDL).
- The DP will also coordinate with the Registrar or transfer agents of the issuing company so that the physical shares are invalidated and cancelled.
- When the depository verifies the form and deems the certificate invalid by confirming with the issuing company, it credits the shares to the Demat account of the investor.
- DP updates the account and informs the investor about the successful conversion.
Conclusion
Given the role of DP in this process, it become important to hire physical shares to Demat services for the investor. We at Share Connection have professional DPs with considerable years of experience in executing the seamless conversion. Our professionals ensure each step is executed perfectly, and minimizes the risk of rejection of the application. We have been providing stock management services and our team of experts has immense expertise in the field of finance, law, and they handle the specific cases with serious professionalism.