Do you hold shares in paper form? If yes, then convert them into dematerialised form latest by March 31 as you will not be allowed to transfer them to anyone without opening a demat account from April onwards.
Do you hold shares in paper form? If yes, then convert them into dematerialised form latest by March 31 as you will not be allowed to transfer them to anyone without opening a demat account from April onwards. In a release on Wednesday, the SEBI said that the measure would come into effect from April 1, 2019.
Shares in demat form would help in maintaining a transparent record of shareholding at companies amid rising concerns over beneficial ownership of entities. However, the SEBI’s latest move doesn’t not prohibit anyone from holding the shares in physical form even after April 1. “…Any investor who is desirous of transferring shares (which are held in physical form) after April 1, 2019 can do so only after the shares are dematerialised,” it also said.
The decision “is not applicable for demat of shares, transmission (i.e. transfer of title of shares by way of inheritance/ succession) and transposition (i.e. re-arrangement/ interchanging of the order of name of shareholders) cases,” the SEBI also noted.
A physical share holder is required to open a demat account with the depository participant (DP) and submit the following documents:
Passport size Photo
Cheque for margin amount
Booklet to fill the demat process
It takes 3-4 days for the process to complete and notification is sent as an SMS to registered phone number, Sachin Mittal, Fundamental Research, Karvy Stock Broking told Financial Express Online. The verification details are asked from new applicant before opening the account, he added.
How to transfer the physical share to newly opened demat account?
Scenario 1: All the stocks and dividends are transferred to the central government if no dividend has been claimed in the last 7 years, So as to claim the same as credit, the investor needs to visit the www.IEPF.com and follow the guidelines mentioned to fill Form V. Thereafter, he is asked to submit the same online.
Scenario 2: If a dividend has been claimed within 7 years, a letter of intent is asked from DPs holding physical shares to convert them into dematerialised form and the processing is then completed.
The processing to convert physical stocks to dematerialised form is completed thereafter from the DP’s end.