Remat is the method of converting security holdings into a tangible form, with the reissue of a share certificate. A client can rematerialise his bonds and shares in demat form into physical form at any time; however, the securities sent for rematerialisation cannot be traded.
By-Law 9.4: Rematerialisation and Business Rule 11.2: Rematerialisation of securities are the legal provisions applied in this process.
Various causes contribute to the rematerialisation of shares, which consists of the non-transferrable nature of locked-in securities or no longer needing to trade in bonds and shares.
Its explanation:
If your shares and bonds are held in your demat account and you don’t wish to deal in it, then an annual maintenance fee for the account will be charged on you, which may vary from 500 to 1,000, so in this case, rematerialisation of your shares can be accomplished to save yourself from this unneeded expenditure.
Many investors own infrastructure bonds in their demat accounts. The infrastructure bonds are locked-in securities with a lock-in period of 5 years. It indicates that for the next 5 years, you can not transfer these securities if you want to switch your demat account from one participant to another. For the same case, you can shift your depository account by rematerialisation of your locked-in bonds.
Read Also: Complete Procedure For Dematerialization Of Shares Under RTA
The process of rematerialisation of securities is completed within a period of 30 days, and can be learned through these steps:
Submission of Rematerialisation Request:
The client has to submit the rematerialisation request of holdings in its account to the DP with whom it has an account.
Verification of Request:
When the DP receives the request form, it certifies that the form is filled properly by issuing a signed & stamped slip to the client as an acknowledgement. The DP verifies the signature of the client as on the request form with the specimen recorded in its documents. If the signatures do not match, the DP will ensure the identity of the client in another way.
The Realisation of Request to NSDL:
DP releases the request details in its DPM (software provided by NSDL to the DP) and sends the request form to the Issuer/ Registrar and Share Transfer Agent.
While filling in the details, if it is found that the client’s account lacks sufficient balance, D.P. will not accept the request, and the client will be notified accordingly.
Issuance of RRN:
If the client’s account has a sufficient balance, the DP will forward the request in the DPM and the DPM will issue a Rematerialisation Request Number (RRN) to fill in the space provided in the rematerialisation request form.
Verification of RRN Details:
Details entered for the RRN should be attested by a person, except for the individual who entered the data.
Further Expression of Request:
The request is then released to the DM by the DP, which is further forwarded to the Issuer/ R&T agent electronically.
Rejection of Request:
While processing the request, the Issuer/ Registrar and Transfer Agent may reject the request & report some objections, seek corrections and send an objection memo to the DP.
Acceptance of Request:
The Issuer/ Registrar & Share Transfer Agent accepts the request for rematerialisation & procures it in printable form and further dispatches the certificates to the client. Simultaneously sends an electronic confirmation to the DM.
Status Update:
The DM downloads this information to the DPM and updates the status of the rematerialisation request in the DPM. The depository will revise the beneficiary account of the shareholder by removing the shares that have been rematerialized.
Reissuance of Physical Share Certificates:
Finally, the registrar will dispatch the physical share certificates to the shareholder, thus ending the process.
Expenses Involved In The Remat Process:
As per the norms of the Depositories Act, the depository cannot levy any stamp duty for transferring the shares when a remat request is made, and only a nominal fee is charged for completing the process.
