What is Dematerialisation?
Dematerialisation is the process by which physical share certificates are cancelled and credited in electronic form in the client's account on a highly secure system at the depository.
What is a Depository?
A depository is similar to a bank. It holds securities like shares, debentures, bonds, Government Securities, Commercial Papers, units etc. of investors in electronic form and provides services related to transactions in securities.
Can any share certificate be dematerialised?
Only those companies which are already listed in the securities list of depositories can dematerialise their shares.
How much time does it take to get shares dematerialised?
The dematerialisation process normally takes between 15-30 days.
What are the services provided by the depositories?
Depositories provide various services including:
- Opening the demat account
- Dematerialisation (converting physical certificates to electronic form)
- Rematerialisation (conversion back to physical certificates)
- Electronic settlement of trades
- Electronic credit of securities in public/rights issues
- Nomination facility
- Change of address services
What benefits do depositories provide?
Depositories provide numerous benefits:
- Immediate transfer of securities
- No stamp duty on transfer
- Elimination of risks (bad delivery, fake securities)
- Reduction in paperwork and transaction costs
- Nomination facility
- Automatic address updates across all holdings
How can I open a demat account?
To open a demat account, fill an account opening form with your DP. Required documents include:
- Proof of Identity: PAN card, Passport, Voter ID, or Driving License
- Proof of Address: Bank passbook, utility bills, or address on ID documents
- Passport-size photograph
How many demat accounts can I open?
An investor can open more than one account with the same DP without any restrictions.
Can someone else operate my demat account?
Yes, any person authorized by an account holder can operate the account by executing a power of attorney and submitting it to the DP.
Is there a minimum balance requirement?
No, an investor can maintain a zero balance in a demat account.
How do I receive bonus shares or dividends?
Bonus shares are directly credited to your demat account by the company. Dividends are paid through ECS (Electronic Clearing Service) or warrants with your bank details.
Can I convert electronic holdings back to physical certificates?
Yes, conversion of securities to physical form (rematerialisation) can be done by requesting your DP.