Dematerialisation of Securities (demat)
Process of dematerialisation
Availability of forms
Filling up the form
Submitting the form
Rejection of demat requests
Transmission-cum-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.
Selected securities announced by SEBI can be delivered only in demat form in the stock exchanges connected to NSDL/CDSL.
All the names on the demat account opening form should be exactly the same as stated on the physical certificates to ensure seamless dematerialization of securities.
An investor intending to dematerialise its securities needs to have a demat account with a DP.
To convert the physical shares into electronic/demat form, a dematerialization request form (DRF), has to be filled in and deposited along with share certificates. The investor has to deface and surrender the certificates registered in its name to the DP. On each share certificate, 'surrendered for dematerialization' needs to be mentioned.
The DP needs to process this request along with the share certificates to the company and simultaneously to registrars and transfer agents through the depository.
After intimating depository electronically, the DP sends the securities to the concerned issuer/R&T agent.
If the issuer/R&T agent finds the certificates in order, they communicate to depository the confirmation of dematerialisation request electronically and the share certificates in the physical form will be destroyed.
The depository will then confirm the dematerialization of shares to the DP. Once this is done, a credit in the holding of shares will reflect in the investor's demat account electronically.
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 Bank has no control.
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 Bank of Baroda branch offering demat services.
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.
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 and 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 Tanmay Kumar Shah but his name on the share certificate may appear as T.K. Shah or Tanmay 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 holders and should be in the same order. The signature on the DRF should match with the specimen signature with Bank of Baroda. If the signature differs, you should sign the DRF in the presence of the Branch Officer
The details of certificates such as the folio no., certificate no., and distinctive no. must be filled up correctly on the DRF.
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 to the branch. The acknowledgement slip at the bottom of the form will be stamped and handed over to you after verification by Bank official.
Dematerialisation request may get rejected for various below mentioned reasons either at the demat back office of Bank of Baroda or by the Registrar. Dematerialisation is done by the Registrar only when it is satisfied of genuineness of securities and ownership status.
On a rejection, the securities are sent back to DP stating the reason for the rejection. DP returns the rejected DRF request to branch and customer can collect from branch.
Customer 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.
Some common reason for Rejection of DRF request:
A dematerialisation request can be rejected in the case of the following objections:
Signature(s) of client on demat request form do not tally with specimen of signatures holder(s) recorded with R&T agent.
Details of all/some certificate(s) differ in demat request form received by R&T agent from DP.
Name(s) of holder(s) on all/some certificates received by R&T agent differs in demat request form received by R&T Agent from DP.
Physical quantity of shares/certificates received by R&T Agent from DP is less than or more than what is mentioned in demat request number or form.
All/ some certificates received by R&T Agent from DP is/are found to be fake.
All/ some certificates received by R&T Agent from DP is/are reported lost or stolen and a stop is recorded in computer master file(s) of R&T Agent.
All/ some certificate(s) sent to incorrect R&T Agent by DP.
Stop recorded as per Bank lien/Statutory Authority/Court Order, etc. in computer master file(s) of R&T Agent against all/some certificates) received for dematerialisation from DP.
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.
Transmission of securities refers to the transfer of securities from an account to another as a result of the death of the sole/any of the holders of the former account. For this the latter need not approach each issuing company or its R & T Agent. Only the DP of the former account needs to be approached. Here the transfer may be done to:
If the former account is a joint holding account and there is at least one survivor, the survivor(s) can request the DP for the securities to be transferred to his/their demat account. Surviving holder(s) has to request the DP vide a form called the transmission form along with a copy of notarised death certificate and original client master having demat account details of surviving holder to transmit the securities lying in the account of the deceased holder. For this purpose, the surviving clients must have a depository account, which can be with the same DP or with a different DP.
Upon the death of sole account holder or there is no survivor amongst the account holders and a nomination had been made by the holder(s) earlier, the nominee can request the DP for the securities to be transferred to his demat account.
The nominee must request the DP in writing along with a certified true copy of the death certificate and transmission form and original client master having demat account details to transmit the securities covered by the nomination to the account of the nominee. The DP will ensure the completeness of the form and validity of the signature of the client and then execute the transmission request. Thus, transmission of securities where nomination has been made eliminates the need of cumbersome legal documents such as will, succession certificate, etc.
In addition to the documents specified under above, an affidavit duly completed by the nominee in the format specified by NSDL/CDSL and attested by a notary/magistrate should be submitted by the claimant.
In case of death of the sole holder, the legal heir(s) or legal representative(s) of the deceased must request the DP to transmit the balances lying in the client account of the deceased to the account of the legal heir(s) or legal representative(s). For this, the legal heir (s) or the legal representative(s) of such securities must submit an instruction called the transmission form to the DP along with the following documents:
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.
However, if the legal heir(s) or the legal representative(s) express inability to produce either of the documents mentioned under (b) and (c) above, and the market value of the securities held in each account of the deceased as on the date of application for transmission does not exceed Rs. 1 lakh, then the DP will process the transmission request on the basis of the following documents:
Transmission form;
Copy of the death certificate duly notarised;
Letter of Indemnity duly supported by a guarantee of an independent surety acceptable to the DP, made on appropriate non judicial stamp paper;
An affidavit made on appropriate non judicial stamp paper; and
No objection certificate(s) from all the legal heir(s) who do not object to such transmission.
Original client master having demat account details
The DP will ensure that the documents submitted by the legal heir(s) or the legal representative(s) are in order and will then effect a transfer of the balances to the client account of the legal heir(s) or the legal representative(s). After effecting the transmission, the DP will close the account of the deceased.