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Dematerialization is the process of converting your physical shares and securities into digital or electronic form. The basic agenda is to smoothen the process of buying, selling, transferring and holding shares and also about making it cost-effective and foolproof. All your securities are stored in an electronic form instead of physical certificates. Let us delve deeper into the topic of dematerialization.
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What Is Dematerialization What Is Dematerialization Process of dematerialization
What Is Dematerialization • Your physical shares and securities are converted into digital or electronic form through the dematerialization process. The key goals are to make purchasing, selling, transferring, and holding shares simpler, cheaper, and error-free. Instead of having physical certificates held, all of your securities are kept in electronic format. Let's examine dematerialization in more detail. The Securities and Exchange Board of India, or SEBI, has registered two depositories: Central Depository Services India Limited (CDSL) and National Securities Depository Limited (NSDL).
Process of dematerialization • Opening a Demat account is the first step in dematerialization. You must choose a Depository Participant (DP) that provides Demat services before opening a Demat account. • A Dematerialization Request Form (DRF), accessible from the Depository Participant (DP), must be completed and deposited with the share certificates in order to convert the physical shares into an electronic/Demat form. On each share certificate, the phrase "Surrendered for Dematerialization" must be written. • This request must be handled by the DP via the depository, and the business, registrars, and transfer agents must receive both the original share certificates and the processed share certificates at the same time. • Real share certificates will be destroyed after the request is granted, and the depository will be informed of the dematerialization.
