Importance of Demat Account
Before we start How Demat Account Works? Let’s talk about what is Demat?
Demat is known as Dematerialisation. Its process of Transfer share certification from Physical to Digital (Electronic form) format.
With help of Demat you can digitally secure your physical Certification into Demat form.
Demat Account holds all your physical certificate in to Digital format. It’s one type of your Bank account where you can save your certificate and other financial documents, Exchange traded funds in Electronics formats.When the shares and other securities are dematerialisation their account are kept and maintained in the Demat account of Depository Participants. DP is authorised by CDSL/NSDL to operate Demat Account.
How to Dematerialised physical Shares in to Demat?
Person has to open Demat Account for Dematerialised Physical Shares. Following are steps to follow for that. Do you have Demat Account ? if No then please check before steps to open Demat account before process Dematerialisation. You also will know how demat and trading account works after reading below steps.
Read more: How to Open Demat Account?
Fill Account Opening Form: Who want to open Demat account to fill the account opening form with all particular details which required.
Provide Required Document list: Pan Card, Identity Proof, Address Proof, Bank Details etc are major document required for the same – Click Here for Details Documents
- Sign DP account opening Agreement with Depository: Investor has to then sign it and submit it to DP and the DP charges certain fee and would give a copy of signed agreement to investor. Also submit to sign Terms and Condition rights and obligation page.
- Depository Provide Client ID: The Depository Participant would give the unique Client ID once the investors depository account is opened.
- DP provide instruction Slip: If investor want to transfer his shares to other dp or other investor dp account that instruction slip required (its one kind of Chq book for DP)
- Dematerialisation Form: Investor should fill Dematerialisation form and attached Physical Certificate. ( for future reference keep Xerox or Scan copy of your portfolio of physical certificate )
- Submit Dematerialisation form to DP Office: Once form fill completely deposit your physical certificate with Dematerialisation form to your DP office. They will provide you receipt copy.
- DP will submit Dematerialisation form: They submit Dematerialisation form to respective company registrar. They will check all details and records in place and match investor sign with their records.
- Time Line: Maximum 30 days’ time required for Transfer Physical Shares to Demat form if everything in place. If any query they will inform investor or DP by mail and send certificate back.
- After Demat: Once your Dematerialisation complete you can sell them online or transfer to other investor DP by Electronically.
- You can Open Trading Account with SEBI Register Broker for sell your dp stock online.