How to get your shares dematerialized

Demat vs. physical shares

The difference between a dematerialised share and a physical share is like the difference between money in the bank account and a physical currency note. Getting physical currency notes transferred into a bank entry, however, is as simple as depositing it with the bank whereas getting a share certificate dematerialised is a slightly longer process.

Only shares that have been transferred in the name of the holder can be dematerialised. A share held as a blank transfer cannot be dematerialised till it is first transferred. As a fallout of this, shares transferred in the name say Mr A can only be sent for dematerialisation through the DP account held in the name of Mr A. In case of shares that are held jointly, it is important to have a DP account opened in the same order of holding. Just in case you are wondering how to get your shares transferred, you probably need to head here.

 

Going about dematting your shares

To get physical shares dematerialised you should follow the following steps:

1. Take a Dematerialisation Request Form (DRF) from your DP.
2. Fill the form with the requisite details such as the name of the account holder, client ID, details of the shares being attached for dematerialisation, and of course affix the signatures of all the account-holders at the base.
3. Ensure the following when you send your shares to Demat land:
1. Shares being sent are available for dematerialisation
2. A separate request is filed for different companies
3. A separate request is filed for different ISIN (International Securities Identification Number) numbers. The ISIN number can be learned from the DP by showing the share certificates
4. Shares being sent are held in the same name, and the order of holders also has to be the same as the name or order of names in which the DP account has been opened

 

4. Now you need to write across the face of the certificate "Surrendered for dematerialisation."
5. Punch two holes on the certificate.
6. Submit these certificates along with the Dematerialisation Request Form to the DP for further processing.

You basically deface the certificates, so that these are finally destroyed and cannot be misused.

 

What transpires after the shares leave your desk

The depository does its internal processing and forwards these shares to the concerned company for dematerialisation. Once the company receives this request, it verifies the details provided and matches the signatures with the sample held in their records. If everything is okay, the company destroys the certificates and transfers an entry of dematerialised shares into the client ID from where such a request is received.

In case of any mismatch, the company returns the shares to the DP from which the request has originated along with a reason for rejection. The DP in turn coordinates with the client for getting the objection rectified from the client. After rectification, the shares are once again sent to the company for dematerialisation.

Finally, you have arrived into the annals of high-tech share transfer!