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Home » Account Types » Demat Account » What Is Dematerialization Account
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All about Dematerialization

What is Dematerialization?

Technology has brought about a drastic change in our everyday lives. The stock markets too have not been left untouched by the change. In 1875, the Bombay Stock Exchange was founded with an open outcry floor trading exchange. Traders would stand on the floor and shout prices of stocks for buying or selling. Then, money would be exchanged for physical receipts of the shares called the certificate. This led to a great amount of paperwork. Even the settlements of trade agreements took time because of the need to deliver the share certificates.

If you wish to better understand the basics of share market and how it all started, you can visit here.

Much has changed since.
In 1996, dematerialization was embraced. Dematerialization is the process by which physical share certificates held by an investor are converted into an equivalent number of securities in electronic form and credited into the investor’s account.

Benefits of Dematerialization

Benefits of Dematerialization By Kotak Securities®

Common bank:

Dematerialization is not just for shares, but also for debt instruments like bonds. Now, you can hold all your investments in a single account.

You can read all the benefits offered by Kotak’s Trinity account.

Automatic update:

Since this is a common account, you don’t have to keep giving all your details like addresses every time you transact or every time you change the details. These details are automatically made available to companies you transact with.

However, you will have to complete your KYC in the first go. Click here to understand your KYC process.

Odd-lot problem:

Earlier, shares were transacted in lots. A single or odd number of securities could not be transacted. This problem is now eliminated.

You’re lives have become a whole lot easier with a host of Trading Tools offered by Kotak Securities.

Delivery risks:

Dematerialization has also eliminated the risks of fake shares, thefts, deliveries gone wrong, and so on, and reduced the paperwork involved. Time of delivery has also reduced drastically. Once your trade is approved, the securities are automatically credited to your account. This applies to other company-related activities like stock splits, stock bonuses, and so on.

Cost reduction:

Earlier, when you transferred the securities, you incurred extra costs due to the stamp duty. This is not a problem with this form.

Easy to hold:

Paper certificates are vulnerable to tears and damage. In contrast, the dematerialized format is a safe and convenient way to hold securities. You also have a nomination facility, whereby you can facilitate a transfer of shares in the event of your demise.

How to Open an Account?

How to Open a Demat Account By Kotak Securities®

  • Then fill up an account opening form and submit along with copies of the required documents and a passport-sized photograph. You also need to have a PAN card. Also carry the original documents for verification.
  • You will be provided with a copy of the rules and regulations, the terms of the agreement and the charges that you will incur.
  • During the process, an In-Person Verification would be carried out. A member of the DP’s staff would contact you to check the details provided in the account opening form.
  • Once the application is processed, the DP will provide you with an account number or client ID. You can use the details to access your account online.
  • As a demat account holder, you would need to pay some fees like the annual maintenance fee levied for maintenance of account and the transaction fee -- levied for debiting securities to and from the account on a monthly basis. These fees differ from every service provider (called a Depository Participant or DP). While some DPs charge a flat fee per transaction, others peg the fee to the transaction value, and are subject to a minimum amount. The fee also differs based on the kind of transaction (buying or selling). In addition to the other fees, the DP also charges a fee for converting the shares from the physical to the electronic form or vice-versa.
  • Minimum shares: A demat account can be opened with no balance of shares. It also does not require that a minimum balance be maintained.

To know the entire process in detail, you can check How to Open a Demat Account.

What are the Documents Required for a Demat Account?

You need to submit proof of identity and address along with a passport size photograph and the account opening form. Only photocopies of the documents are required for submission, but originals are also required for verification.

Here is a broad list of documents that can be used as proofs:

You need to submit proof of identity and address along with a passport size photograph and the account opening form. Only photocopies of the documents are required for submission, but originals are also required for verification.

Proof of identity: PAN card, voter's ID, passport, driver's license, bank attestation, IT returns, electricity bill, telephone bill, ID cards with applicant's photo issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities, or professional bodies such as ICAI, ICWAI, ICSI, bar council etc.

Proof of address: Ration card, passport, voter ID card, driving license, bank passbook or bank statement, verified copies of electricity bills, residence telephone bills, leave and license agreement or agreement for sale, self-declaration by High Court or Supreme Court judges, identity card or a document with address issued by the central or state government and its departments, statutory or regulatory authorities, public sector undertakings (PSUs), scheduled commercial banks, public financial institutions, colleges affiliated to universities and professional bodies such as ICAI, ICWAI, Bar Council etc.

This is easy. All you need to do is fill in the Demat Request Form (DRM), fill in the appropriate details of the share certificates you hold, and submit it with the physical share receipt. Every share certificate needs a separate DRM form. Once the form is approved, your demat account will automatically be updated to reflect your newly dematerialized shares.


Click here to read up about the different accounts that Kotak Securities has to offer.

WHAT NEXT?

Now that you know all about dematerialization, learn how to open a demat account

Product Pages
Demat Account Brokerage Charges Collateral Amount in Demat Account
Demat Account Number Documents Required for Demat Account How to Open Demat Account
Use of Demat Account Multiple Demat Account in India Link your Aadhar number with Demat account
Procedure for buying shares through a Demat account Difference Between Dematerialisation Vs. Rematerialisation demat account and its uses
What are bonus shares? Benefits Of Dematerialization
FAQs Pages
Demat Account Profile Transfer Shares from Demat Account Demat Account Security Key
Transfer Shares to Demat NRI Account Demat Account Charges
Article Pages
Buy Mutual Fund without Demat Account Conclusion Of Demat Account Convert Physical Shares To Demat Account
Demat Account Opening Charges Difference Between Trading Account and Demat Account Demat Account
How To Close Demat Account Informative Report On Demat Account Best Demat Account

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KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. Attention Investors Prevent Unauthorized Transactions in your demat / trading account --> Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors. Circular No.: NSDL/POLICY/2014/0094, NSE/INSP/27436, BSE - 20140901-21

Kindly note that as per NSE circulars nos: NSE/INVG/36333 dated November 17, 2017, NSE/INVG/37765 dated May 15.2018 and BSE circular nos: 20171117-18 dated November 17, 2017, 20180515-39 dated May 15.2018, trading in securities in which unsolicited messages are being circulated is restricted. The list of such stocks are available on the website of NSE & BSE. In case of any queries, request you to kindly get in touch with Customer Service on 18002099191/9292

Kotak securities Ltd. having composite licence no.CA0268 is a Corporate Agent of Kotak Mahindra Life Insurance Company Limited and Kotak Mahindra General Insurance Company Limited. We have taken reasonable measures to protect security and confidentiality of the Customer information.

The Stock Exchange, Mumbai is not in any manner answerable, responsible or liable to any person or persons for any acts of omission or commission, errors, mistakes and/or violation, actual or perceived, by us or our partners, agents, associates etc., of any of the Rules, Regulations, Bye-laws of the Stock Exchange, Mumbai, SEBI Act or any other laws in force from time to time.
The Stock Exchange, Mumbai is not answerable, responsible or liable for any information on this Website or for any services rendered by our employees, our servants, and us.

Please do not share your online trading password with anyone as this could weaken the security of your account and lead to unauthorized trades or losses. This cautionary note is as per Exchange circular dated 15th May, 2020.

Note: NSDL and CDSL have mapped Unique Client Codes (UCC) to demat accounts based on PAN, refer NSDL and CDSL circulars. Format for linking/delinking the UCC: NSDL: link | CDSL: link.

Clients are required to keep all their account related information up-to-date including details like email id, mobile number, address, bank details, demat details, income details etc. which will help the client to timely receive any information and to avail the various facilities relating to the Trading and Demat account. To update the details, client may get in touch with our designated customer service desk or approach the branch for assistance.

Investor Awareness regarding the revised guidelines on margin collection:-
Attention Investors :

1. Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020.
2. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from depository on your email id and/or mobile number to create pledge.
3. Pay 20% upfront margin of the transaction value to trade in cash market segment.
4. Investors may please refer to the Exchange's Frequently Asked Questions (FAQs) issued vide circular reference NSE/INSP/45191 dated July 31, 2020, notice no. 20200731-7 dated July 31, 2020 and NSE/INSP/45534 dated August 31, 2020, notice no. 20200831-45 dated August 31, 2020 and other guidelines issued from time to time in this regard.
5. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.
.......... Issued in the interest of Investors

Clients are hereby cautioned not to rely on unsolicited stock tips / investment advice circulated through bulk SMS, websites and social media platforms. Kindly exercise appropriate due diligence before dealing in the securities market.

Requirement of obtaining consent through OTP has been waived for off market transfer reason code “Implementation of Government / Regulatory Direction / Orders” Consent through OTP would continue to be required for all other reasons for any off-market transfers. Refer NSDL circular.

Covid-19 impact to clients:-
1. Applicable to clients on whose email id contract notes and other statements get bounced or who have opted for Physical contract notes/ other statements or Digital and Physical contract notes/ other statements :Due to the nationwide lockdown, we are unable send physical contract notes and other statements. To view them, log into www.kotaksecurities.com
2. Kindly update your email id with us to receive contract notes/various statements electronically to avoid any further inconvenience.
3. We are unable to issue the running account settlement payouts through cheque due to the lockdown. We request you to update your Bank account details to facilitate direct transfer to your linked bank account. You may approach our designated customer service desk or your branch to know the Bank details updation procedure.
4. Exchange advisory: Investors are advised to exercise caution while taking investment decisions in these unpredictable times. Clients are also encouraged to keep track of the underlying physical as well as international commodity markets. Clients are advised to undertake transactions after understanding the nature of the contractual relationship into which they are entering and the extent of its exposure to risk. Clients are further advised to follow sound risk management practices and not to be carried away by unfounded rumors, tips etc.

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