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In previous times, before most financial (rather, all by now) services went online, investors held stocks and shares of a company in the form of paper certificates. These physical holdings were prone to wear and tear and even loss. Several senior citizens and other investor groups would misplace a share certificate here or there. Duplicate share certificates were hard to come by, with tedious paperwork involved.
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Dematerialisationand Rematerialisation What Is Dematerialisationand Rematerialisation? distinguish between dematerialisation and rematerialisation
What Is Dematerialisation and Rematerialisation? • What Is Dematerialisation? The process of transforming paper share certificates and debentures into electronic format is called dematerialization. Since investors mainly use the account to hold virtual dematerialized shares and securities, the name "demat" in Demat accounts stands for dematerialization. You must speak with a Depository Participant (DP) to open a demat account in India if you want to dematerialize your securities. To open Demat accounts in India, the DPs use two depositories: the National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). • What Is Rematerialisation? The process of turning digitally stored securities into physical certificates is known as rematerialization. Investors who have converted their shares or have them kept in Demat accounts in electronic format can choose to go through the rematerialization procedure. Investors cannot trade assets on the relevant market while they are being rematerialized, nevertheless.
