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What is Dematerialisation of Securities (Demat)? and How does it work?

2.  Dematerialisation of Securities (Demat)

2.1  Availability of Forms

2.2  Filling up the form

2.3  Submitting the form

2.4  Credit in the Demat Account

2.5  Rejection of Demat Requests

2.6  Transmission-cum-Demat

 

2.Dematerialisation of Securities (Demat)

 

Dematerialisation is the process of converting the securities held in physical form (certificates) to an equivalent number of securities in electronic form and crediting the same to the investor's demat account. Dematerialised securities do not have any certificate numbers or distinctive numbers and are dealt only in quantity i.e. the securities are fungible.

 

Dematerialisation of your holdings is not mandatory. You can hold your securities either in demat form or in physical form. You can also keep part of your holdings (in the same scrip) in demat form & part in physical form. However, a select list of securities announced by SEBI can be delivered only in demat form in the stock exchanges connected to NSDL/CDSL .

 

2.1 Availability of Forms

 

Submit a completely filled-up Demat Request Form (DRF) in triplicate for each ISIN along with the defaced physical certificates. The forms are available at any ICICI Bank branch offering demat services.

 

2.2 Filling up the form

 

Ensure that security mentioned on the certificates is eligible for Demat. For being eligible for demat, the company has to sign up with NSDL/CDSL. You can check eligibility on www.icicibank.com or ask the nearest Branch.

 

Use a separate DRF for each security having a unique International Security Identification Number (ISIN). Verify the certificates carefully and mention the correct ISIN. In case two or more sets of certificates of the same security have different ISIN (this is possible in case of partly paid up shares and non-pari passu shares), use separate DRFs for each ISIN. However, you can dematerialise multiple folio nos. of the same pattern of holders relating to the same ISIN under a single DRF.


Submit certificates under lock-in under separate DRF. Do not mix the same with free securities. In case of locked-in securities, fill up the lock-in reason & lock-in release date on the DRF. Amongst lock-in securities belonging to the same ISIN but having different lock-in release dates or lock-in reason, make separate DRF requests.


Demat requests received from client(s) with name(s) not matching exactly with the name(s) appearing on the certificates merely on account of initials not being spelt out fully or put after or prior to the surname, can be processed. However, this is possible only if the signature(s) of the client(s) on the DRF tallies with the specimen signature(s) available with the Issuer or its Registrar. For example, the shareholder may have opened the depository account in the name of Sushil Ramesh Shah but his name on the share certificate may appear as S. R. Shah or Sushil R Shah etc.


The combination and the order of holders' names on DRF and as printed on the Certificates should be identical with that in the DP account.

For example, if the shares are in the name of X, Y (X as first holder and Y and second holder) it cannot be dematerialised in the account of either X or Y alone. Also if the shares are in the name of X, they cannot be dematerialised in the account of X, Y (X as first holder and Y as second holder).

However, where the combination of holders is the same in the certificates and in the demat account, and the difference is only in the order in which the name of the holders appear on the share certificates and in the demat account, dematerialisation is possible. Here, you have to submit a Transposition Request Form along with the DRF. The form is also available at the nearest Branch.

The DRF must be signed by all the account holder's and should be in the same order. The signature on the DRF should match with the specimen signature with ICICI Bank. If the signature differs, you should sign the DRF in the presence of the Branch Officer. If you have a doubt that the signature on the DRF may not match with that registered with the Registrar, you can get the signature on the DRF attested by your banker.

The details of certificates such as the folio no., certificate no., & distinctive no. must be filled up correctly on the DRF.

 

For help on filling up, refer to the sample filled-in DRF provided in Annexure-1.

 

2.3 Submitting the form

 

You must deface the certificates by putting a stamp or by writing ''Surrendered for Dematerialisation". However defacing should be done only after checking the eligibility of security, as defaced securities cannot be sold in physical form. If defacing has been done by mistake then you should send the same to registrar for replacement.

        *NSDL Business Rule 11.1.7.

The Participant shall ensure that the certificates submitted for dematerialisation are marked by the Client (customer) with the words "Surrendered for Dematerialisation".

 

Certificates should not be mutilated or defaced in such a way that the material information is not readable.

Ensure that the certificates are attached in the same order as mentioned in the DRF.

You should submit the DRF in triplicate. You can submit the DRF at any ICICI Bank branch. The acknowledgement slip at the bottom of the form will be stamped and handed over to you after verification by the ICICI Bank official.

 

2.4 Credit in the Demat Account

 

The defaced shares along with the DRF are sent by ICICI Bank to the registrar who will then credit the customer's account. The normal time taken for credit of shares to the account after confirmation by the Registrar is about 30 days. However the time taken would vary from one registrar to another over which ICICI Bank has no control.

To check whether your account has been credited, you can refer to the transaction statement (Refer # 12, below). The same will be reflected in pending demat balance on receiving your request. After dematerialisation, the same will be reflected under free balance. Alternatively you can use the web (register on www.icicibank.com), phone us or visit the ICICI Bank branch. In case your account does not get credited within a month of submission, you can either phone us or write to us using the "Email Us" option.

 

In case there is a delay beyond 40 days, if you so wish, ICICI Bank can give you the registrar's name and telephone number as well as your Demat Request Number (DRN).

 

2.5 Rejection of Demat Requests

 

Your request may get rejected for various reasons either at the Central Processing Office of ICICI Bank or by the Registrar. Dematerialisation is done by the Registrar only when it is satisfied of genuineness of securities & ownership status.

On a rejection, the securities are sent back to you stating the reason for the rejection.

You can resubmit the certificates for dematerialisation after resolving the reason for the rejection. Please resubmit on a fresh DRF. Do not use the same DRF on which the objection was made.

 

2.6 Transmission-cum-Demat

 

In case of certificates held jointly, on the death of any one or more of the joint holder(s) mentioned on the certificate, the surviving joint holder(s) can get the name(s) of the deceased deleted from the physical certificate(s) and get the securities dematerialised in the DP account of the surviving holder(s) by submitting the following documents along with the DRF:

  • A copy of the death certificate duly notarised
  • A copy of the Succession certificate duly notarised or an order of a court of competent jurisdiction where the deceased has not left a Will or
  • A copy of the Probate or Letter of Administration duly notarised.