{"id":386295,"date":"2024-08-07T18:17:22","date_gmt":"2024-08-07T12:47:22","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=386295"},"modified":"2024-08-13T16:14:50","modified_gmt":"2024-08-13T10:44:50","slug":"how-to-dematerialise-physical-shares","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/varsity\/how-to-dematerialise-physical-shares","title":{"rendered":"How to dematerialise physical shares?"},"content":{"rendered":"\n
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The Bombay Stock Exchange (BSE), Asia’s oldest stock exchange, was established in 1875, marking a significant milestone in India’s financial history. With its inception, investors began receiving physical share certificates, representing company ownership. These certificates, tangible pieces of paper adorned with intricate designs, official seals, and company officials’ signatures, became symbols of one’s investment and ownership.<\/p>\n\n\n\n

Fast forward to 1996, the Indian financial market underwent a transformative shift with the establishment of the National Securities Depository Limited (NSDL). It introduced the concept of dematerialisation. This new system allowed investors to convert their physical share certificates into electronic form, stored in demat accounts. Dematerialisation eliminated the risks of loss, theft, damage, and forgery associated with physical certificates. Today, India has two depositories, NSDL and Central Depository Services (India) Limited (CDSL), which oversee this process.<\/p>\n\n\n\n

Securities and Exchange Board of India (SEBI) issued a press release on April 1, 2019, mandating the dematerialisation of shares if they need to be transferred.<\/p>\n\n\n\n

To dematerialise physical share certificates, contact either a RTA (Registrar and Transfer Agents) or a broker. RTAs are SEBI-registered entities responsible for maintaining share registries and handling share transfers on behalf of companies.<\/p>\n\n\n\n

On the other hand, stockbrokers are authorized agents of the depository and are called depository participants (DPs). DPs provide depository services, including dematerialising shares. Once your demat account is set up with a broker, request a Dematerialisation Request Form (DRF) from your stockbroker. Fill out the form and send it to the stockbroker with a self-attested copy of your PAN and the physical share certificates. Ensure that all details, such as the name, folio number, and certificate number on the certificates, match those on the demat account and forms. Any discrepancies can result in the rejection of the request.<\/p>\n\n\n\n

The stockbroker then creates an online dematerialisation request using the depository portal and issues you a Dematerialisation Request Number (DRN), confirming the initiation of the process. The stockbroker forwards the DRF and certificates to the Registrar and Transfer Agents (RTA). <\/p>\n\n\n\n

The RTA will verify all the documents and approve the dematerlisation request through the depository portal. The dematerialised shares will be credited to your demat account within 30 days.<\/p>\n\n\n\n

Now, consider another scenario where you are a nominee of the deceased who held physical shares. In that case, you, as the legal heir or nominee, must contact the RTA to transfer the certificates to your name. This process is known as the transmission of shares. It can’t be initiated with the broker. Once the shares are transferred to your name, they can be dematerialised. <\/p>\n\n\n\n

The RTA for a company can be found on the NSE and BSE websites:<\/p>\n\n\n\n