Dematerialisation

A : 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.

A : Only those companies which are already listed in the securities list of depositories can dematerialise their shares.

A : The dematerialisation process normally takes between 15-30 days.
A : 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. Depository is the one, where all the securities are kept in demat form of all the clients having their demat account.

A : Depositories provide a number of benefits like:

  • Immediate transfer of securities.
  • No stamp duty on transfer of securities.
  • Elimination of risks associated with physical certificates such as bad delivery , fake securities , etc.
  • Reduction in paperwork involved in transfer of securities.
  • Reduction in transaction cost.
  • Nomination facility.
  • Changes in address recorded with DP gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately.
  • Transmission of securities is done by DP eliminating correspondence with companies.
  • Convenient method of consolidation of folios/accounts.
  • Holding investments in equity, debt instruments and Government securities in a single account.
  • Automatic credit into demat account, of shares, arising out of split/consolidation/merger etc.

A : The dematerialisation process normally takes between 15-30 days.

  • Opening the demat account.
  • Dematerialisation i.e., converting physical certificates to electronic form.
  • Rematerialisation i.e., conversion of securities in demat form into physical certificates.
  • Facilitating repurchase / redemption of units of mutual funds.
  • Electronic settlement of trades in stock exchanges connected to NSDL.
  • Pledging/hypothecation of dematerialised securities against loan.
  • Electronic credit of securities allotted in public issues, rights issue.
  • Receipt of non-cash corporate benefits such as bonus, in electronic form.
  • Freezing of demat accounts, so that the debits from the account are not permitted.
  • Nomination facility for demat accounts.
  • Services related to change of address.
  • Effecting transmission of securities.
  • Instructions to your DP over Internet through SPEED-e facility. (Please check with your DP for availing the facility).
  • Account monitoring facility over Internet for clearing members through SPEED facility.
  • Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.
A : Sajag is a Depository Participant. Depositories appoint agents or depository participants (DPs) approved by SEBI to provide its services to investors. According to SEBI regulations, only three categories of entities i.e. banks, financial institutions and stock exchange members [brokers] registered with SEBI can become DPs.

A : An investor needs to fill an account opening form for opening a demat account. The DP-Client Agreement provides the details about the rights and duties of investors and DPs.Along with the account opening form, investors have to submit the following documents:

  • Proof of Identity : Investors signature and photograph must be authenticated by an existing demat account holder with the same DP or by your bank. Alternatively, investors can submit a copy of Passport, Voters Id Card, Driving License or PAN card with photograph.
  • Proof of Address : Investors also have to submit a copy of Passport, Voters Id Card, Driving License or PAN card with photograph, ration card or bank passbook as proof of address.
  • Passport-size photograph : The investor has to carry all original documents to the DP for verification and should obtain a copy of the agreement and schedule of charges for future reference.
A : An investor can maintain a zero balance in a demat account.
A : Any person authorised by an account holder is allowed to operate by executing a power of attorney and submitting it to the DP.
A : In a bank account, any credits to the account is credited only when a ‘paying in’ slip is submitted together with cash/cheque. Similarly, in a depository account ‘Receipt in’ form has to be submitted to receive securities in the account.
A : An investor can submit an account closure request to the DP for transferring the account from one DP to another. Is it possible to demat debt instruments, mutual fund units, government securities through a demat account? Investors are allowed to dematerialise and hold investments like debt instruments, mutual fund units, government securities in a single demat account.
A : Conversion of securities to physical form may be availed by requesting the DP.
A : Every settlement is identified by a combination of a market type and a settlement number. Investors are required to mention the appropriate settlement details on the delivery instruction slip while transferring the shares to the broker’s account. These settlement details are also available on the contract note issued by the broker.
A : Execution date is the date on which securities will be actually debited from the investor’s account. The execution date written on the delivery instruction has to be entered by the DP.
A : Investors will receive their payments from the company through the ECS (Electronic Clearing Service) facility or will be issued warrants on which investor’s bank account details are printed.
A : Investors will have their entitlements directly credited by the company to the depository account.
A : An allotment advice will be sent by the Issuer/ its R&T agent for bonus/ rights entitlement. The Transaction Statement given by the DP, will also show the bonus/ rights credit into the account. The quantity shown in the advice and statement of transaction should match.