Many senior citizens and small investors who are invested in the stock market and holding physical shares are struggling to have them converted into a dematerialized form can now relax and easily convert their shares without dematerialization. It’s a very long struggle to convert physical shares and claim split and bonus shares.
Even today when investors buy or sell shares, the brokers insist on dealing in dematerialized shares. In order to do that one has to open a demat account which is rather costly. However, keeping shares in physical form is creating more serious problems. Thus, companies are now not allowed to issue physical shares except in case of the split of shares or bonus, which need to be issued to those original holdings continues to be in physical form.
Nevertheless, if you are in the hold of physical shares then you don’t need to open a demat of account. It is because the Bombay Stock Exchange (BSE) made a move in providing the exit route strategy to all small investors who are holding physical shares under a long-term investment in the stock market.
Exit Route Scheme
This scheme has been formulated by BSE and approved by the market regulator SEBI. It is more like an exit strategy to the small investors holding physical shares of companies where deliveries were mandated in demat form only. Since it is not economical to open a depository participant account to get physical forms dematerialized.
This scheme allows them to sell their shares in physical form.
Investors who are holding up to 500 physical shares of a company where the deliveries are to be given in demat only are eligible to use this scheme. An investor can sell a maximum of 500 shares, the BOLT system authorize for entry of single order size of up to 500 shares only when the shares are registered under your name prior to the date the scrip was mandated for compulsory demat deliveries.
Final Thoughts: –
This is one good facility given by the BSE which allows investors to dematerialize their physical shares. In order to do that the exchange has decided to re-activate the C group or odd-lot window on the BOLT system to help place orders for the sale or purchase of the physical shares despite the mandated demat account.