How to Convert Physical Shares to Demat Account?

The financial markets have evolved significantly in today’s digital age, making traditional methods of holding and trading securities less common. Physical share certificates, once the primary way to prove ownership of company stocks, are gradually becoming a thing of the past. The convenience, safety, and efficiency of holding shares in electronic form have led many investors to convert physical shares to Demat (Dematerialized) form. This transition not only eliminates the risks associated with handling physical certificates but also helps in the process of trading, transferring, and managing your investments. In this blog, we'll understand how to convert physical shares to Demat, ensuring you stay ahead in the ever-changing world of finance. 

Steps To Convert Physical Shares Into Demat Shares

Here are the steps to convert physical shares to Demat accounts or electronic shares. 

• Step 1. Open a Demat Account:  If you don't already have a Demat account, open one with a SEBI-registered Depository Participant (DP). This can be done online through platforms like the Icici Security app. 
• Step 2. Submit the Demat Request Form (DRF): Visit your DP and fill out the Demat Request Form (DRF). Submit this form along with your physical share certificates. 
• Step 3. Verification and DRN Generation: Your DP will verify the documents and generate a Dematerialisation Registration Number (DRN). These details, along with your share certificates, are then sent to the Registrar and Transfer Agent (RTA) for processing. 
• Step 4. Update in Register of Members: The RTA updates the Register of Members to reflect the shares being Dematerialised.
• Step 5. Credit to Demat Account: Once processed, your Demat account is credited with the electronic shares, completing the conversion process.

After the completion of the physical shares to Demat process, you can check your Demat account balance and verify your holdings on your Demat account online. For any queries, you can connect with your broker and clear your concern.

Why Dematerialisation? Advantages of Dematerialised Shares

The Dematerialisation process serves a crucial purpose - guiding individuals on the conversion of physical shares to Dematerialised form, a mandatory move enforced by SEBI. Once shares are converted to Demat through the opening of a Demat account and following the prescribed process, ownership rights become legally binding. 

This transformative process offers a multitude of advantages once investors grasp how to convert physical shares into Demat: 

• Convenience: Trading and transferring Dematerialized shares is streamlined, bypassing the need for physical handling or extensive paperwork. This enhances the efficiency and transparency of buying and selling shares.
• Enhanced Security: Dematerialisation mitigates the risks of theft or damage often associated with physical share certificates.
• Cost-Efficiency: The process significantly reduces transaction costs by eliminating expenses related to printing and dispatching physical certificates. Additionally, it expedites transaction settlement times.
• Versatility: The shift from physical to dematerialised shares empowers investors with heightened trading and investment flexibility. Now, the buying and selling of even a single share can be executed swiftly within seconds.