OMTEX CLASSES: Shares in physical form cannot be converted into electronic form.

Shares in physical form cannot be converted into electronic form.

Ans. False.

Reasons: (1) Depository system hold the securities of the depositor in  the form of electronic account.

(2) This makes possible paperless transactions in securities through computerization.

(3) The procedure to whereby physical shares are converted into electronic format is called dematerialization.

(4) The shareholder has to open a Demat account to convert his holdings into e - shares.

(5) SEBI has notified that settlement of market trades in listed securities should take place only in the demat mode.

(6) The benefits of dematerialization are plenty compared to physical holding of shares.