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What is Dematerialisation of shares?

April 26, 2017dematerialisation Shares

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What is Dematerialisation of shares?

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Conversion of physical share certificates into electronic shares is known as Dematerialisation of shares. To have your shares dematerialised, shares should have been transferred in your name/joint names before you send these for dematerialising.

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Dematerialisation (Demat) is the process by which securities held in physical form evidencing the holding of securities by any person are cancelled and destroyed and the ownership thereof is entered into and retained in a fungible form on a depository by way of electronic balances. Demat facilitates paperless trading whereby securities transactions are executed electronically reducing / mitigating possibility of loss of related documents and / or fraudulent transactions. Trading in demat form is regulated by the Depositories Act, 1996 and is monitored by the Securities and Exchange Board of India (SEBI). The two depositories presently functioning in India are National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).