Other Processes and Applications of DP Accounts

The various other processes and applications of DP accounts are as follows -

Dematerialization

The process by which the investor's physical certificates are transformed into an equivalent number of securities in electronic form and credited to the investor's account with his DP is known as Dematerialization.

In order to DeMat the shares, the investor needs to submit the original share certificates along with a duly filled and signed Dematerialization request Form [DRF]. This form should contain details about the investor account as well as the company and share certificate details. The DP will then forward the certificates along with the DRF to the concerned company or registrar and once dematerialized, the shares will show up in the investor's account. This process normally takes around 30 days.

Transfer

If the physical shares held by the investor are in a different name other than the DP account or if the mode of holding does not match the account, he/she can transfer the shares to the required holding pattern by duly filling up a Transfer Deed and sending the share certificates along with the transfer deed to the company.

The transfer deed can be obtained from the office of the Registrar of Companies or the Stock Exchange. The deed needs to be duly signed by ALL the transferors and transferees. It must be also stamped with 0.5% of the total market value of the shares held.

Transposition

Incase the mode of holding in the physical shares is the opposite of the mode of holding in the DP account; the shares need not be transferred. An annexure called the Transposition Form [Annexure OA of NSDL Business Rules] can be attached with the DRF and submitted to the DP.

Transmission

Transmission is the process in which securities of a deceased account holder are transferred to the account of the surviving joint holder(s) / legal heirs / nominee of the deceased account holder. Incase of demat accounts, this process is very simple. In this case, the transmission formalities for all securities held in a demat account can be completed by submitting documents to the DP.

Rematerialization

If the investor wants to get the securities in physical form, he needs to request his DP for rematerialization. The process of converting electronic holdings back into physical certificates is known as “Rematerialization”. Once the DP verifies the required balance, he forwards the request to the depository; which in turn informs the registrar that prints and dispatches the certificates to the investor.

Market and Off-Market Trades

Share transfer from DeMat account can happen in two ways -

• Market Transfer
• Off-market transfer

Market transfer is when the shares held in DeMat form are sold in the market and a settlement arises thereof. A delivery instruction needs to be given, signed by all the account holders, to the DP and the shares will be transferred to the trading account member's pool and then the shares will be transferred to the respective depository for clearance.

In off-market trades, a person transfers the shares to another person without actually placing an order in the market. One just needs to fill up the receiver's details in the off-market column in the delivery instruction and submit it to the DP. The sellers or the buyers do not need a trading account for this purpose.