M.

COM 1ST SEMESTER

STOCK MARKET OPERATION

UNIT -04
DEPOSITARY SERVICES

PROCEDURE OF DEMATIRIALISATION & REMATIRIALISATION.

Prepared By:
Shilpa Belagali.

Guidance by,
Mr. MUSTAQ MULLA M. Com, NET, KSET
Teaching Assistant
P.G. Department of Studies in commerce.
INTRODUCTION:
In the year 1996 revaluation the Indian stock market
when the securities and exchange board of india introduced an
account is called Demat a/c. The idea behind the introduction of
demat a/c was to do away with the complex process of physical
trading where investores had to be present at the stock
exchange to buy and sell securities. With a demat a/c. SEBI
introduced the current form of online trading. Where investers
can buy and sell securities online and hold their investments
virtually in the demat a/c. But what about the shares investers
nought before 1996 which are held in the form of physical share
certification...
That is where the process of dematerialisation introduced by SEBI held
investers to convert their physical share into eletronic from through a demat
account.
The process of dematerialisation is tital to ensure you can trade ion the
shares you hold as physical certificates by converting them into vertical share.
This belongs to highights what is dematerialistion and the entire
dematerialisation process .

DEMAT ACCOUNT:
Demat account is like a bank account for holding securities just like funds. It is
safe and covenient for trading for storing shares in electronic form.

DEMATERIALISATION:

MEANING: Dematerialisation ,when we purchase shares for the company.

Then company genarally issue a certificate to use that certificate is know as
physical share certificate or paper form of share certificates to electronic form.
THE MAIN FOUR PROBLEMS ASSOCIATED WITH ITS
PHYSICAL SHARE CERTIFICATE:

1.The transfer of physical shares of certificate was

difficult
2.Purchase of physical shares of certificate was
difficult .
3. sale of physical shares of certificate was difficult.
4. safty of physical shares of certificate was difficult.
WHAT DO YOU MEAN BY DEMATERIALTION:

dematerialisation means, when physical share

certificate is converted into electronic form term as
dematerialisation and this dematerialisation is usually that
done by a depositary.

Whose a depository : the company registored under the

companies act and granted certificate of registeration by SEBI.
NSDL: NATIONAL SECURITIES DEPOSITORY LTD.
CDSL: CENTRAL DEPOSITORY SERVICES LTD.
REQUAISITES FOR DEMAT OF SECURITIES:
1.Depository account.
2. Eligible securities.
3. securities should be in name of account.
4. separation demat form for each issuing co.
5. The demat form should be signed by all
holders.
STEPS IN DEMAT:

1.Open an account with depository participant

2. Invester os required to fill DRF(Depository Requisation Fund).
From the securities physical share certificate.
3.DP updates the demat a/c of investor
4.DP submit the certificate to register.
5.Rigioster verifies and converts physical certificate and confirms
demat of securities.
6.Invester demat a/c is updated with number of shares
dematerialised.
ADVANCED OF DEMATIRIALATION OF SHARE:

1.No. Much paper work.

2.share trading is immediate .
3.loss of share in transist is prevented in
demating.
4.No need of transfer deed.
5.Invester will be relieved from problem of bad
delawary face certificate and face sign.
6.Faster settlement cycle & payout.
7. No stamp duty.
8.reduces cost of issue of tranfer of securities
DIS – ADVANTAGES:
1. Lack of technical knowledge.
2. AMC( Annual Maintenance charge).
3. More traders
REMATERIALISATION:

It is process of converting securities that are in

digital format into physical certificate.
It means converting electronice certificate
into physical form is know as a dematerialisation.
FEATURES OF REMATERIALISATION:
1. It dematerialisation can be carried on by the
client on any time.
2. The process of dematerialisation generally gets
complete within 30days.
3. The shares which are the dematerialised can
not be traded.
4. The dematerialisation of share generally
required in balance in demat account.
PROCEDURE OF REMATERIALISATION:

1.The client has to submit a request to depository

participant (DP).
2.The DP is generally verify by:
* it verifies whether for your request form fully
field signed &stamped.
* It verifies signature
3.It verify balance in demat account
4.It details recorded in remat request number
(RRN).Is verified by person other then DP.
5.The depositary forwards the request to issue
electronically.
Differences Between Dematerialization &
Rematerialisation
POINTS DEMATERIALISATION REMATERIALISATION

MEANING IT IS A PROCESS OF CONVERTING IT IS A PROCESS OF ELECTONICES

PHYSICAL FORM OF SECURITIES FORM OF SECURITIES INTO
INTO ELECTRONIC FORM. PHYSICAL FORM

CONVERSION HERE, THE PAPER FORM OF HERE, THE DIGITAL /ELECTRONIC

SECURITIES IS CONVERTED INTO FORM OF SECURITIES ITS
DIGITAL /ELECTRONIC FORM OF CONVERTED INTO PHYSICAL
SECURITIES . /PAPER FORM OF SECURITIES.

EASE OF TRADING SMOOTH TRANSPERENT AND ALL TRANSACTIONS NEEDS TO BE

STRAIGH FORWERD CONDUCTED PHYSICAL IN THE
REQUIRED LOCATIONS.

FORM USED IT USE TO IT USES TO

DRF(DEMATERIALISATION RRF( REMATERIALISATION
REQUEST FORM) REQUEST FORM )

COST OF MAINTENCES MINIMAL MAINTENCES CHARGES DO NOT REQURE A MAINTENCES

SECURITY LOWER THRATS HIGHER THRATS

AUTHORITY OF MC RESTS WITH THE LISE WITH THE COMPNY

DEPOSITORY PARTICEPARS
CONCLUSION
Overall the process of dematerialisation and
dematerialisation have a apposite managing and
functions while the dematerialisation process converts
securities form physical to digital / electronics
formats.rematerialistaion converts them back to physical
certificates. Two process and features are completely
different and the decision to opt for either of them
depends on your requirements as a trader. You too can
make the most of trading and demat account in India.
investors and traders can avail of an all in one a/c to
trade in multiple securities online at their convience.