What is Core & Satellite strategy?

In the stock market, the purchase and sale of shares now only happens in dematerialized or electronic form. However, some investors still have  shares in physical or paper form. According to the market regulator SEBI, the purchase and sale of such shares is no longer possible.

That is, if you have such shares, you will not be able to sell or transfer those. Therefore, you should immediately convert such shares into dematerialized form. Market regulator SEBI has been emphasizing for a long time that all physical shares should be converted into digital format.

If shares are in dematerialized form, the settlement process is much faster and easier. This can protect you against any kind of fraud committed by share transfer agents.

SEBI believes that this will increase transparency in the capital market and  it will be easier for tax authorities to identify the real beneficiaries.

According to SEBI, if someone has physical shares then they must provide their registrar and transfer agent the required documents like PAN details, contact details, bank account details, and signature samples etc.

Certified financial planner Jitendra Solanki says that there is no point in keeping shares in physical form anymore. If someone has such shares, then he cannot sell or transfer those without converting into demat form. Therefore, if someone still has such a share,  then he should convert it to demat immediately.

So now let’s find out how to convert shares from physical form to demat.

First of all, open a demat account with any DP, i.e., Depository Participant. The DP acts as an intermediary between you and any depository. The DP must be registered with SEBI. You can also open a demat account with your bank.

After opening a demat account, send a request for dematerialisation.

After filling out the request form, surrender your physical shares to your DP. On every share certificate, write ‘Surrendered for Dematerialisation’. Submit all the necessary documents to your DP. After this, your DP will send a electronic message to the registrar and transfer agent. The R&T agent will be instructed to maintain your record.

After this, a dematerialisation registration number will be generated. It will be filled in your dematerialization request form and it will be sent to the R&T agent along with your original share certificate. After this, the R&T agent will verify the validity of your submitted documents.

Now the process of replacing your name with your DP’s name will begin. Along with this, the record of all the shares dematerialized will be credited in your account. Once this process is complete, an acknowledgement will be generated from the member’s register.

It will be stated that necessary changes have been made. Number has been forwarded to your DP. You can  sell or transfer your shares from your demat account as per your wish.