What is Dematerialisation? List of Financial Instruments that can be Dematerialized

Overview of Dematerialisation

With the help of process called 'Dematerialisation', physical certificates of the investor are converted to an equivalent number of securities in an electronic form and are credited into the his/ her demat account with his Depository Participant (DP).

Process of Dematerialisation

Dematerialisation is a procedure to convert physical shares to electronic shares.

1. Obtain a Demat Request Form from your Depository Participant (DP). The Demat request form should have the following details and should be filled in triplicate:
   • Client ID
   • Name of the account holder
   • Security name
   • ISIN Code
   • Quantity and no. of certificates
   • Folio number, Certificate number, Distinctive numbers
   • Signatures of account holders
   • Transposition form, if applicable
   • Transmission along with Demat form, if applicable
2. Fill in the form properly and sign at given space as required.
3. Submit your physical certificates along with the form to your Depository Participant (DP) for dematerialisation.
4. DP will then enter your request to the depository through its system.
5. DP submits the certificates to the registrar and share transfer agent (RSTA) of the company.
6. In case of any objection or in case of additional documents (if any), the RSTA informs you directly.
7. After dematerialising the certificates, RSTA will update the demat account and inform depository regarding completion of dematerialisation.
8. Depository will updates its accounts and informs your Depository Participant (DP).
9. Your DP then updates your demat account by crediting the shares.
10. Check your demat account for credit of securities and their quantum.
11. You can check online the list of securities that are eligible to be dematerialised from the websites of CDSL and NSDL.

List of Financial Instruments that can be Dematerialized

1. Equity: All kinds of equity and equity oriented instruments can be dematerialized through your DP.
2. Initial Public Offer (IPO): Apply in IPOs and the shares will directly be credited in demat form in your demat account.
3. Rajiv Gandhi Equity Savings Scheme (RGESS): You can save taxes upto Rs 7725 p.a. for 3 consecutive years, if you are a new equity investor by investing in Rajiv Gandhi Equity Savings Scheme (RGESS). The units are kept in demat form only.
4. Gold ETF
5. Systematic Investment Plan (Do It Yourself i.e.DIYSIP): DIYSIP is an option wherein you can buy pre-specified quantity of stocks/units on a regular basis. This facility is available in share stocks, Gold ETFs and Index ETFs.
6. Bonds / NCDs
7. Mutual Funds Units: You can keep, purchase and redeem mutual fund units online through your demat and trading account.

Facilities offered by Depository Participant Account

• Dematerialisation:Converting physical certificates to electronic form.
• Rematerialisation: Converting securities in demat form into physical certificates.
• Electronic settlement of trades.
• Pledging/hypothecation of dematerialised securities.
• Facilitating repurchase / redemption of units of mutual funds.
• Electronic credit of securities allotted in public issues, rights issue.
• Automatic receipt of non-cash corporate benefits such as bonus, in electronic form.
• Freezing of demat accounts, so that the debits from the account are not permitted.
• Nomination facility.
• Services related to change of address.
• Transmission of securities.
• Other facilities viz. holding debt instruments in the same account, availing stock lending/borrowing facility, etc.