how to dematerialised shares

7/29/2019 how to dematerialised shares.

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DematerialisationOf Shares & Securities


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What is Demat

Conversion of physical securities intoelectronic form

No distinctive number to securitiesrequired as depositing & withdrawingmoney from a bank without botheringabout distinctive no. of currency


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Demat-need ?

bad deliveries due to signature difference

mistakes in completion of transfer deeds

tearing and mutilation of securities

fake certificates

fraudulent interception of certificate in transit

transfer stamp duty extra consumption of time by the Companies

postal delays and charges etc


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Dematerialisation

Introduced in India through the enactment ofthe Depositories Act, 1996

It is not mandatory

One may keep its holding partly in physicalform and partly in Demat form

A select list of securities announced by SEBI

can be delivered only in demat form in thestock exchanges connected to NSDL


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DEMAT-participants

Participants:

Investors

The Depository NSDL [national securities depository ltd.]

CDSIL[central depository of securities india ltd.]

The Depository Participants The Issuing Company


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Investors [Beneficial Owner]

Individual

Partnership Firm

HUF

Company

Beneficial Owner is a person in whose name ademat account is opened with Depository for the

purpose of holding securities in the electronicform


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Depository

a depository is an organisation, whichholds the beneficial owner's securities in

electronic form, through a registeredDepository Participant (DP).

A depository functions somewhat similarto a commercial bank.

To avail of the services offered by adepository, the investor has to open anaccount with it through a registered DP.


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Depository Participant

A Depository Participant(DP) is an agentof the depository who is authorised tooffer depository services to investors.

Financial institutions, banks, custodiansand stockbrokers complying with therequirements prescribed by SEBI/

Depositories can be registered as DP.


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Procedure of Demat-

for an investor Fill DRF(Demat

Request Form)available with DP

Deface the sharecertificate(s) onewants to dematerialiseby writing across

Surrendered forDematerialisation

Submit the DRF andShare Certificates toDP

DP would forwardthem to theissuer/their Registrar& Transfer Agent

Investors depositorya/c would be creditedwith thedematerialisedsecurities


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The time involved in the

process Dematerialisation is normally completed

within 15 days after the share

certificates have reached theissuer/their R&T agent. Thus it will takeonly a month from the date one hands

over shares, to receive Demat Credit.


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Trading & Settlement inDematerialised Securities If you are a buyer:

Purchase securities in any of the S.E.s(connectedto NSDL) through a broker of your choice andmake payment to your broker

Broker arranges payment to clearingcorpo./clearing house of the stock exchange

Broker receives cr. in his clearing a/c

Broker can directly transfer these securities to your

a/c Broker gives instructions to your DP to debit his

clearing a/c and credit your depository a/c.

You give instructions to your DP for receiving Cr.

If instructions match your a/c with your DP iscredited


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Trading & Settlement inDematerialised Securities

If you are a seller Sell your demat securities in any of the Stock

Exchanges linked to NSDL through a broker

You give instructions to your DP for Debit of yourDepository a/c and Credit of your brokers clearingmember a/c at least 24 hrs i.e.one working dayprior to the pay-in date or before the deadline

prescribed by your DP On pay in day your broker gives instruction to hisDP for delivery to clearing corpo.

Broker receives payment from the clearing corpo.

You receive the payment accordingly.


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Charges

Charges are paid through DPs Custody charges: 0.01% p.a.(Rs.10 for every

Rs.100,000) of the average market value ofsecurities held in a/c

Settlement charges: 0.02% (Rs.20 for every Rs.100,000)of the market value of the securitiesbeing transferred from selling broker to theclearing corpo.of the stock exchange and samecharges from clearing corpo.to buying agent

Rematerialisation charges of 0.10%(Rs.100 forevery Rs.100,000) of the market value ofsecurities or Rs.10,whichever is higher


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Other Benefits

Allotment directly in Demat formpossible,

Pledge of Demat holdings possible,

Lending/Borrowing of Demat Securitiesto/from an Authorised intermediary,

Freezing of a/c possible

Transmission of holdings, Nomination facility

how to dematerialised shares

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