The addition of 2.5 crore Demat accounts in India in FY23 showed the increasing popularity of investing in securities. A dematerialisation account, also known as a Demat account, allows you to hold securities and shares in a dematerialised or electronic form.
This eliminates the need to store physical share certificates, which can be difficult and expensive to maintain. As per the directive by SEBI, physical shares will no longer hold value after September 30, 2023.
So, if you hold physical shares, ensure you complete the KYC process before this date. Electronic conversion helps make buying and selling more convenient and easier to track. To go about this process, you will need to fill out a demat request form (DRF).
To learn about the dematerialisation request form, the process of filling the DRF, and more, read on.
To transfer physical certificates of the securities you hold into an electronic balance or dematerialised form, you will need a demat request form. This form serves as a request to the Depository Participant (DP) or a demat broker to dematerialise your securities.
The DRF contains essential information like:
Your name and DP identification number
Type of security to be dematerialised
Details of the securities such as folio and certificate numbers
Quantities of the securities to be dematerialised
Face value and lock-in details, if applicable
DP’s authorisation stamp, date, and signature
Here are the steps that you need to follow to fill out a DRF. You can get access to this form from the National Securities Depository Limited (NSDL), which is a depository.
Step 1: Fill in the date and your Client ID
Step 2: Add the name of the first, second and third holder
Step 3: Enter the company name, type of security, and its face value
Step 4: Enter the quantity of securities to be dematerialised in both figures and words
Step 5: Choose from free securities or locked-in securities
Step 6: Add the 12-digit International Securities Identification Number (ISIN)
Step 7: Enter the Certificate number and Distinctive number, which you can get on the share certificate, folio number and quantities
Step 8: Add the total number of certificates and details related to the securities locked in, which includes the reason and date of release
Step 9: Check the information that you have added to the DRF, alongside the signatures of all account holders
Step 10: The DP then needs to fill out other details under the section, ‘Participant Authorisation’ and ‘Acknowledgement’ and the DRN on the top of the DRF
Once all this is done, you will get an acknowledgement slip from the DP. Ensure that when you submit the DRF, you also hand over the physical certificates. Write ‘Surrendered For Dematerialisation’ across each of them before you do so.
There are some common reasons due to which your DRF may not be approved by the DP. However, most discrepancies and errors can be rectified easily. Check the reasons for rejections, along with their remedies.
In some cases, if the number of certificates that you have added in your form is less than the actual number of certificates, your DRF may get rejected. To address this, send an updated demat request form with correct number.
If the certificates you handed over turn out to be fake or duplicates, your dematerialisation request may be rejected. In this case, you need to contact the person or entity who sold you these certificates and work towards resolving the issue. This process can be time consuming, but you need to ensure the certificates are authentic.
The dematerialisation request form may be rejected if the name written in it does not match the one mentioned on the certificate or DP account. You will have to submit a new form after resolving the issue regarding your name.
Your signature is an essential component for verification, and if there is any mismatch in it, your dematerialisation request form could be rejected. In case you did not sign the form correctly, resign and submit it.
Another reason for this could be an actual change in your signature over a period of time. In this instance, sign the form in front of a legal officer and submit an affidavit stating the change.
If you have added the securities of more than one company in a single DRF, it may lead to application rejection. Fill out separate DRFs for each companies’ securities to proceed.
Sometimes, extra dividends may have been accidentally paid to you, and this can lead to the rejection of your demat request form. Once the extra amount is settled, the process can resume.
Other reasons for a rejection include:
Mismatch in ISIN
Mutilation that makes the contents of the certificates unreadable
Fully paid-up and partly paid-up securities mentioned on the same DRF
Single DRF contains certificates locked in for different reasons
You can solve these issues by correcting the information, getting new securities from the issuer, and filling out separate forms as needed.
Now that you know how to file a dematerialisation request form and the instances where rejection is possible, you can take the right steps. By dematerialising your physical shares, you can benefit from better security and ease of trading. Seamlessly trade by opening a hassle-free demat account on Bajaj Markets.
A Depository Participant (DP) approves or rejects your dematerialisation request form. The National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) have registered DPs you can work with.
You can get a demat request form from the official website of the National Securities Depository Limited.
Yes, you can convert your shares from an electronic form to a physical form. This is known as Remat. To send your rematerialisation request, you must fill out a Remat request form.
Your DRF can get rejected based on reasons like incomplete information, wrong information, mutilated certificates, and more.
The DP usually checks your signature, names of the securities, their paid-up and lock-in status, and the ISIN. Apart from this, the distinctive numbers are also verified.