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What Is Dematerialization | Motilal Oswal

Dematerialization (DEMAT) is the move from physical certificates to electronic bookkeeping. Actual stock certificates are then removed and retired from circulation in exchange for electronic recording.

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What Is Dematerialization | Motilal Oswal

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  1. What Is Dematerialization What Is Dematerialization Process of dematerialization

  2. What Is Dematerialization • Dematerialization is the process through which your physical shares and securities are changed into digital or electronic form. The main objectives are to simplify, reduce costs, and eliminate errors in the buying, selling, transferring, and holding of shares. All of your securities are stored in electronic format rather than as physical certificates. Let's look more closely at dematerialization. Central Depository Services India Limited (CDSL) and National Securities Depository Limited are two depositories that the Securities and Exchange Board of India, or SEBI, has registered (NSDL).

  3. Process of dematerialization • Dematerialization begins with opening a Demat account. Before opening a Demat account, you must select a Depository Participant (DP) that offers Dematservices. • To convert the physical shares into an electronic/Demat form, a Dematerialization Request Form (DRF), available from the Depository Participant (DP), must be filled out and deposited with the share certificates. The words "Surrendered for Dematerialization" shall appear on each share certificate. • The DP must handle this request through the depository and provide the share certificates and the processed share certificates at the same time to the company, registrars, and transfer agents. • After the request is approved, the real share certificates will be destroyed, and the depository will be notified of the dematerialization.

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